The rating actions by Fitch affect the following classes
of Wachovia Bank's commercial mortgage pass-through certificates,
series 2004-Whale:
-- $27.4 million class L at 'BBB-' on Negative Rating Watch.
The following classes are upgraded by Fitch:
-- $51.1 million class B to 'AAA' from 'AA+';
-- $28.5 million class C to 'AAA' from 'AA';
-- $23.7 million class D to 'AA+' from 'AA-';
-- $23.8 million class E to 'AA' from 'A+';
-- $26.1 million class F to 'AA-' from 'A';
-- $23.8 million class G to 'A' from 'A-'.
In addition, the following classes are affirmed by Fitch:
-- $157.1 million class A-2 at 'AAA';
-- $23.7 million class H at 'BBB+';
-- $23.8 million class J at 'BBB';
-- $26.1 million class K at 'BBB-';
-- Interest-only classes X-1A, X-1B, and X-2 at 'AAA'.
The placement of class L on Negative Watch is due to declining performance at the Adam's Mark Denver. The class will remain on Negative Watch until year end (YE) 2005 operating results for the property can be analyzed. The upgrades reflect increased credit enhancement from the payoff of seven loans since issuance, representing 54% of the deal.
The performance of the Adams Mark Denver loan (18.4%) declined 49.5% from issuance, based upon Fitch's adjusted net cash flow (NCF) for the trailing 12 months ended June 2005. The loan is on the master servicer's watchlist for performance decline. The decline is attributed to room renovations; a general economic downturn that affected the hotel's main focus, the group sector; and loss of the parent organization's credibility in 2003 and 2004. The borrower has fully drawn on a $2.5 million soft cost reserve established at issuance and intends additional renovations to the subject. The lender retains over $3 million for discretionary curtailment. There are some signs of improved performance for 2005. According to a July 2005 STAR Summary Report, while year to date occupancy was flat, average daily rate increased 7.2% and revenue per available room increased 5.8% compared with YE 2004.
The remaining loans in the pool, 1775 Broadway (24.1%) and the Prime Outlets Portfolio (57.5%) are performing in-line with issuance. The performance at 1775 Broadway for YE 2004 improved slightly. Fitch's stressed NCF was 1.34 times (x) compared with 1.33x at issuance. The performance at the Prime Outlets Portfolio for YE 2004 also improved. Fitch's stressed NCF was 1.45x compared with 1.43x at issuance. The servicer reported that Prime Outlets Gulfport (7.4% of the Prime Outlets Portfolio) sustained major roof damage from Hurricane Katrina. However, the borrower has indicated 70% of the roof will be replaced by Nov. 25, 2005 with the remaining 30% structurally sound and watertight for the holiday season. Fitch will continue to closely monitor the loan for any additional economic impact resulting from hurricane damage.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 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.
-- $27.4 million class L at 'BBB-' on Negative Rating Watch.
The following classes are upgraded by Fitch:
-- $51.1 million class B to 'AAA' from 'AA+';
-- $28.5 million class C to 'AAA' from 'AA';
-- $23.7 million class D to 'AA+' from 'AA-';
-- $23.8 million class E to 'AA' from 'A+';
-- $26.1 million class F to 'AA-' from 'A';
-- $23.8 million class G to 'A' from 'A-'.
In addition, the following classes are affirmed by Fitch:
-- $157.1 million class A-2 at 'AAA';
-- $23.7 million class H at 'BBB+';
-- $23.8 million class J at 'BBB';
-- $26.1 million class K at 'BBB-';
-- Interest-only classes X-1A, X-1B, and X-2 at 'AAA'.
The placement of class L on Negative Watch is due to declining performance at the Adam's Mark Denver. The class will remain on Negative Watch until year end (YE) 2005 operating results for the property can be analyzed. The upgrades reflect increased credit enhancement from the payoff of seven loans since issuance, representing 54% of the deal.
The performance of the Adams Mark Denver loan (18.4%) declined 49.5% from issuance, based upon Fitch's adjusted net cash flow (NCF) for the trailing 12 months ended June 2005. The loan is on the master servicer's watchlist for performance decline. The decline is attributed to room renovations; a general economic downturn that affected the hotel's main focus, the group sector; and loss of the parent organization's credibility in 2003 and 2004. The borrower has fully drawn on a $2.5 million soft cost reserve established at issuance and intends additional renovations to the subject. The lender retains over $3 million for discretionary curtailment. There are some signs of improved performance for 2005. According to a July 2005 STAR Summary Report, while year to date occupancy was flat, average daily rate increased 7.2% and revenue per available room increased 5.8% compared with YE 2004.
The remaining loans in the pool, 1775 Broadway (24.1%) and the Prime Outlets Portfolio (57.5%) are performing in-line with issuance. The performance at 1775 Broadway for YE 2004 improved slightly. Fitch's stressed NCF was 1.34 times (x) compared with 1.33x at issuance. The performance at the Prime Outlets Portfolio for YE 2004 also improved. Fitch's stressed NCF was 1.45x compared with 1.43x at issuance. The servicer reported that Prime Outlets Gulfport (7.4% of the Prime Outlets Portfolio) sustained major roof damage from Hurricane Katrina. However, the borrower has indicated 70% of the roof will be replaced by Nov. 25, 2005 with the remaining 30% structurally sound and watertight for the holiday season. Fitch will continue to closely monitor the loan for any additional economic impact resulting from hurricane damage.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 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.
© 2005 Business Wire
