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Merril Lynch loses ratings from Fitch

Merril Lynch Mortgage Trust dropped in ratings for four classes of securities certifications backed by commercial real estate due to expectant losses from the underlying loans. Fitch Ratings was the rating board responsible for the drop in grade for Merril Lynch.

At the same time, 17 classes of loans in the same category of securities were affirmed by the rating behemouth.

During it's review, Fitch classified 76 loans as mortgages of concern. Around 15 of these 76 loans are specially serviced. The loan pool in question had an entire aggregate principal balance of $2.2 billion at the end of December, with a total of $2.5 billion at issuance of the loan.

In regards to the special servicing loans, 16 of them are real-estate owned, three currently in foreclosure, and another three are delinquent and 1% are current.

One of the largest contributors to these downgrades and expected losses with the loan pool is a three-story office building in Scottsdale, Arizona. The loan was transferred into special servicing back in October of 2009 when a large tenant ended his lease and vacated the building. As of the middle of last year, the building currently sits at 62% occupancy.

Another contributor, a hotel in Tampa, Florida, is another debated property with special servicing that is looking to pursue foreclosure.

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