Fitch Ratings affirms and assigns Outlooks for LB-UBS 2007-C6, as follows:
--$19.6 million class A-1 at 'AAA', Outlook Stable;
--$455 million class A-2 at 'AAA', Outlook Stable;
--$169 million class A-3 at 'AAA', Outlook Stable;
--$67 billion class A-AB at 'AAA', Outlook Stable;
--$910.4 million class A-4 at 'AAA', Outlook Stable;
--$422.8 million class A-1A at 'AAA', Outlook Stable;
--$40.0 million class A-2FL at 'AAA', Outlook Stable;
--$70.0 million class A-MFL at 'AAA', Outlook Stable;
--$227.9 million class A-M at 'AAA', Outlook Stable;
--$156.4 million class A-J at 'AAA', Outlook Stable;
--Interest-only class X at 'AAA', Outlook Stable;
--$33.5 million class B at 'AA+', Outlook Stable;
--$37.2 million class C at 'AA', Outlook Stable;
--$33.5 million class D at 'AA-', Outlook Stable;
--$29.8 million class E at 'A+', Outlook Stable;
--$29.8 million class F at 'A', Outlook Stable;
--$33.5 million class G at 'A-', Outlook Stable;
--$37.2 million class H at 'BBB+', Outlook Stable;
--$41.0 million class J at 'BBB', Outlook Stable;
--$29.8 million class K at 'BBB-', Outlook Stable;
--$44.7 million class L at 'BB+', Outlook Negative;
--$14.9 million class M at 'BB', Outlook Negative;
--$11.2 million class N at 'BB-', Outlook Negative;
--$3.7 million class P at 'B+', Outlook Negative;
--$7.4 million class Q at 'B', Outlook Negative;
--$7.4 million class S at 'B-', Outlook Negative.
Fitch does not rate the $44.7 million class T.
The rating affirmations are the result of stable performance and minimal paydown since issuance in August 2007. The affirmations of classes A-2FL and A-MFL reflect the fact that the ratings on these two classes only address receipt of the underlying fixed rate coupon and do not address the receipt of a floating rate coupon or any potential costs associated with a floating rate swap. Therefore the ratings are unaffected by the fact that the guarantor of the two floating rate swaps, Lehman Brothers Holding Inc., declared bankruptcy Sept. 14, 2008 and was in default as of Sept. 29, 2008 according to the trust documents. Fitch notes that the A-2FL swap default has been resolved as the trustee has terminated the swap per the direction of the bondholders who will receive interest payments at a fixed rate. The trustee is currently pursuing resolution to the A-MFL swap default, including termination of the swap agreement and the replacement of the swap counterparty. Both classes maintain their payment priority. Rating outlooks reflect the likely direction of rating changes over the next one to two years. As of the September 2008 distribution date, the pool's aggregate certificate balance has decreased 0.05% to $2.98 billion from $2.98 billion at issuance.
Fitch has identified 17 loans of concern (11.3% of the pool), including two delinquent loans (0.17%), one of which is specially serviced (0.09% of the pool). The specially serviced loan is collateralized by a 94 unit apartment located in Lubbock, Texas that is 90+ days delinquent and transferred to special servicing in November 2007.
The largest Fitch loan of concern (2.47%) is Islandia Shopping Center in Islandia, New York. Servicer reported debt service coverage ratio (DSCR) is 0.97 times (x) as of year-end 2007. Occupancy as of year-end 2007 is 99.0% compared to 99.2% at issuance. The loan had a Fitch stressed DSCR of 0.94x at issuance and is currently stabilizing operations.
The 707 Broad Street loan maintains an investment-grade shadow rating. Servicer reported year-end occupancy of 95.0% and DSCR of 3.65x.
The transaction has minimal near-term maturity risk as only 20.5% of the loans mature in 2012, and 69.7% mature in 2017.
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.
