Fitch Upgrades 4 Classes of BACM 2003-2

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has upgraded four and affirmed four classes of Banc of America Commercial Mortgage Inc. (BACM) commercial mortgage pass-through certificates series 2003-2. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrades are due to significant defeasance and high credit enhancement as well as the expected continued delivering of the transaction (from loan payoffs) in the near future.

As of the June 2015 distribution date the pool's aggregate principal balance has been reduced by 96.44% to $59.7 million from $1.77 billion at issuance. Of the original 152 loans in the pool, six remain. Of the remaining loans, four are defeased (87.3%), one is performing (9.3%) and one is in special servicing (3.4%). Interest shortfalls are currently affecting classes L through P.

The performing loan (9.3%) and four defeased loans (87.3%) mature in 2018.

The non-defeased loan (9.3%) is a 152 unit multifamily property, built in 1988, located in Wilmington, NC. The property was last inspected on June 6, 2015. Per the inspection report, the property is in average condition and appearance compared to similar properties in the area. As of March 2015, the property reported a debt service coverage ratio (DSCR) of 1.45x and 99% occupancy.

The specially serviced asset is Rustic Pines (3.4%), a 131-unit manufactured housing community located in Thompson, OH. The loan was transferred to special servicing after maturity default in October 2013. Per the special servicer commentary, the servicer accepted a Deed-in-Lieu of foreclose proceedings and engaged Foresite Realty Partners to manage the property. The property is in fair to poor condition. The special servicer is working with management to make necessary repairs. With further stabilization, the property will be marketed for sale. As of May 2015, occupancy had declined to 66% from 71% in December 2013.

RATING SENSITIVITIES

Rating Outlooks on classes G, H, J and K remain Stable due to increased credit enhancement, significant paydown from defeased loans and declining risk of loan defaults. The Rating Outlook on class H has been revised to Stable from Negative due to increased credit enhancement, significant paydown from defeased loans, and low risk of additional loan defaults.

DUE DILIGENCE USAGE

No third party due diligence was provided or reviewed in relation to this rating action.

Fitch has upgraded the following classes as indicated:

Banc of America Commercial Mortgage Inc. commercial mortgage pass-through certificates series 2003-2

--$1.54 million class G to 'AAAsf' from 'AAsf'; Outlook Stable;--$20.9 million class H to 'Asf' from 'BBBsf'; Outlook Stable;--$18.8 million class J to 'Asf' from 'BBsf'; Outlook Stable;--$10.5 million class K to 'Asf' from 'Bsf'; Outlook Stable.

Fitch has affirmed the following classes and revised the RE as indicated:

--$7.8 million class L at 'Dsf'; RE 85%.--$0 class M at 'Dsf'; RE 0%;--$0 class N at 'Dsf'; RE 0%;--$0 class O at 'Dsf'; RE 0%.

The class A-1, A-1A, A-2, A-3, A-4, B, C, D, E, F, BW Rakes certificates have paid in full. Fitch does not rate the class P and HS Rake certificates.

Fitch previously withdrew the ratings on the interest-only class XC and XP certificates.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Criteria for Rating Caps and Limitations in Global Structured Finance Transactions (pub. 28 May 2014)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748781

Global Structured Finance Rating Criteria (pub. 31 Mar 2015)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864268

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria (pub. 10 Dec 2014)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608

Additional Disclosures

Dodd-Frank Rating Information Disclosure Formhttps://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=987329

Solicitation Statushttps://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=987329

Endorsement Policyhttps://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150701006668/en/

Fitch Ratings
Primary Analyst
Martin Nunnally, +1-212-908-0871
Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Christopher Bushart, +1-212-908-0606
Senior Director
or
Media Relations, New York
Sandro Scenga, +1-212-908-0278
[email protected]

Source: Fitch Ratings

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