Fitch Ratings-London-08 October 2009: Fitch Ratings has today
downgraded Opera Finance (CMH) plc's EUR375m commercial
mortgage-backed floating-rate notes due 2015 as follows:
EUR250m Class A: ISIN (XS0241931442) affirmed at 'AAA'; Outlook
revised to Negative from StableEUR50m Class B: ISIN (XS0241934628)
downgraded to 'A' from 'AA'; Outlook NegativeEUR40m Class C: ISIN
(XS0241935195) downgraded to 'BBB-' from 'A'; Outlook
NegativeEUR35m Class D: ISIN (XS0241935609) downgraded to 'B' from
'BBB'; Outlook Negative
The creditworthiness of the transaction has been impacted by the
severity of declines in the Irish commercial real estate market.
While a January 2009 re-valuation of the portfolio reflects a 9%
market value decline (MVD) from the peak value in August 2008,
Fitch estimates a further MVD of 35% based on current market
conditions. This results in a Fitch loan-to-value ratio (LTV) of
101% on the securitised A-note and 127% on the whole loan, and is
the main driver of the negative rating action.
The properties are of good to average quality and are primarily
located in Dublin, with a single retail asset in Cork. The
Stillorgan Shopping Centre, the largest asset in the portfolio (26%
of MV), is a secondary shopping centre located in the suburbs of
Dublin, while the second largest property in the portfolio is a
grade A office property located in Dublin (17.9% of MV). With the
exception of the shopping centre property, there is no vacancy in
the portfolio (the WA vacancy stands at 2.8%). In general, the
collateral benefits from a good lease rollover profile, with a
weighted average lease term-to-break of 14.9 years which extends
over 10 years after the maturity of the loan. While the portfolio
displays a strong income profile, which largely insulates it from
the current turbulence in the Irish domestic market, Fitch believes
the retail element of the portfolio to be more exposed to potential
declines in income due to tenant defaults or lease
renegotiations.
Fitch's criteria for European CMBS surveillance and criteria for
European multifamily loans were used to analyse the quality of the
underlying commercial loans.
The applicable criteria, 'Criteria for European CMBS
Surveillance (Europe CMBS)', dated 12 November 2008 and 'Global
Structured Finance Rating Criteria', dated 30 September 2009, are
available on www.fitchratings.com.
Fitch will continue to monitor the performance of the
transaction. Updated surveillance data and a performance update
report can be found on www.fitchratings.com.
Contact: Anuj Radia, London, Tel: +44(0)20 7682 7306; Gioia
Dominedo: +44 (0) 20 7417 4376
Media Relations: Julian Dennison, London, Tel: +44 020 7682
7480, Email: julian.dennison@fitchratings.com.
Additional information is available at www.fitchratings.com.
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