NEW YORK & BOGOTA--(BUSINESS WIRE)--Fitch Ratings has affirmed the ratings and Rating Outlooks on 1345 Avenue of the Americas and Park Avenue Plaza Trust, series FB 2005-1 commercial mortgage pass-through certificates as follows:
--$85.3 million class A-2 at 'AAAsf';
--$364.1 million class A-3 at 'AAAsf';
--$26 million class B at 'AAsf';
--$27.7 million class C at 'AA-sf';
--$10 million class D at 'A+sf';
--$18.5 million class E at 'Asf';
--$17.2 million class F at 'A-sf'.
The Rating Outlooks are Stable.
Fitch previously withdrew the rating on the interest-only class X.
The rating affirmations reflect stable occupancy and cash flow performance since Fitch's last review. There has been no paydown to the trust certificates since issuance, and no amortization is expected until 2015. The Rating Outlooks reflect the likely direction of any changes to the ratings over the next one to two years.
This transaction is backed by two office properties located in Midtown Manhattan: 1345 Avenue of Americas (79.5% of the outstanding transaction balance), and Park Avenue Plaza (20.5%).
The 1345 Avenue of Americas loan is collateralized by a 1.9 million-square foot (sf) class 'A' office building. The collateral also includes the Ziegfeld Theater, a 19,844-sf motion picture theater; a three-level, subterranean 341-space parking garage; and a 40-space parking lot. As of April 2012, the property was 99.8% leased, compared with 96% at issuance. The largest tenant at the property is AllianceBernstein, L.P. (rated 'A+' by Fitch), which leases approximately 54% of the total net rentable area (NRA) through 2019. The landlord has a unilateral option to extend the lease on 876,211 sf of AllianceBernstein's space (45.7% of the NRA) for five years. Other major tenants include PIMCO Advisors L.P. (12% of the NRA), Linklaters LLP (10.4%), Avon Products, Inc. (6.9%), and Accenture LLP (6.1%). There is minimal rollover until 2016, when leases corresponding to 13.4% of the space expire.
For the nine months ended Sept. 30, 2011, the Fitch stressed debt service coverage ratio (DSCR) for the 1345 Avenue of the Americas loan was 1.33x, compared with 1.30x at issuance. The Fitch stressed DSCR is calculated using the whole debt stack of $680.1 million, which includes both trust and non-trust A and B note components, as well as the non-trust C note component.
The Park Avenue Plaza loan is collateralized by a 1.1 million-sf class 'A' office building. As of December 2011, the property was 96.9% leased, compared with 100% at issuance. Major tenants include BlackRock, Inc. (24.9%), Aon Service Corporation (23.9%), McKinsey & Company Inc. (23.4%), and Swiss Re Financial Services (16%). Within the next 10 years, significant rollover concentrations include 16% of the space in 2012 and 23.5% in 2019. The majority of the space expiring in 2012 has already been preleased.
The Fitch stressed DSCR for the Park Avenue Plaza loan was 1.57x as of year-end 2011, down from 1.83x at issuance. Fitch applied an increased vacancy factor in its analysis, which was the main driver for the lower Fitch stressed DSCR. The Fitch stressed DSCR is calculated using the trust and non-trust A and B note components in the amount of $231.5 million.
The 1345 Avenue of Americas loan has interest-only payments for the first two years and the final three years of its approximately 20-year loan term. Principal and interest payments commenced in August 2007. The Park Avenue Plaza loan has interest-only payments for the first two and half years and final three years of its 20-year loan term. Principal and interest payments commenced in February 2008. The principal portion of monthly debt service payments is directed first to the 1-A1 and 1-A2 notes, which are securitized outside of this trust and are expected to be repaid in full by August 2015. Class A-2 in this trust will receive principal payments once the 1-A1 and 1-A2 notes have been repaid in full. The trust has a standard sequential-pay structure. As of the May 2012 distribution date, the pool's aggregate certificate balance remained at $548.7 million, unchanged from issuance. The trust loans mature in 2025.
Additional information on Fitch's criteria for analyzing large loans within a single borrower or multiborrower U.S. CMBS transaction is available in the Sept. 26, 2011 report, 'Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions', which is available at 'www.fitchratings.com' under the following headers:
Structured Finance >> CMBS >> Criteria Reports
Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (Aug. 4, 2011);
--'Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions' (Sept. 26, 2011).
Applicable Criteria and Related Research:
Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=651703
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=646569
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.