DBRS Downgrades Two Classes of Taurus CMBS (Pan-Europe) 2007-1 Limited and Places Seven Classes Under Review with Negative Implications

DBRS, Inc. (DBRS) has today downgraded the ratings of two classes of Commercial Mortgage Backed Floating Rate Notes (the Notes) issued by Taurus CMBS (Pan-Europe) 2007-1 Limited (Taurus or the Trust), as follows:

-- Class E to D (sf) from C (sf)
-- Class F to D (sf) from C (sf)

DBRS has also today placed the ratings of the following seven classes of Notes Under Review with Negative Implications, as follows:

-- Class A1, rated A (low) (sf)
-- Class A2, rated BBB (sf)
-- Class B, rated BB (high) (sf)
-- Class C, rated B (sf)
-- Class D, rated CCC (sf)
-- Class X1, rated AAA (sf)
-- Class X2, rated AAA (sf)

Classes A2, B, C and D also have Interest in Arrears.

The rating downgrades reflect the most recent realized losses to the Trust. In November 2014, the Ahouvi Leipzig loan was liquidated from the Trust, resulting in a realized loss of EUR 2.0 million and a loss severity of 14.0%. The loan, which had been secured by an office property in Leipzig, Germany, transferred to special servicing in January 2013 after the borrower could not secure refinancing capital at maturity.

The remaining classes in the capital structure have been placed Under Review with Negative Implications as a result of concerns surrounding the specially serviced loan in the transaction. The Fishman JEC Portfolio (Fishman) loan currently represents 79.1% of the current pool balance and is the largest of three loans remaining in the transaction. The Fishman loan is secured by 18 office and industrial properties located throughout France. The loan transferred to special servicing in May 2014 after the borrower triggered insolvency proceedings, ahead of the originally scheduled July 2014 maturity date. According to the servicer, the Safeguard Proceedings observation period ended in January 2015, with the borrower and Judicial Administrator currently negotiating loan resolution terms and timelines. DBRS has placed the aforementioned classes Under Review with Negative Implications, while both parties determine a concrete disposition strategy. According to the servicer, an RIS notification detailing a potential resolution strategy is expected in the next quarter. The most recent reporting from January 2014, indicates the portfolio was 87.0% occupied, with 85.0% of the in-place net rentable income contributed by investment-grade tenants, including the French government. The fourth-largest tenant, which occupies 9.6% of the net rentable area (NRA) had a lease expiration in January 2015; however, DBRS did not receive a leasing update on the tenant. The second- and fifth-largest tenants, which combined occupy 20.9% of the NRA, also have lease expirations in 2015. The portfolio was last valued at EUR 158.0 million in June 2013, equating to a loan-to-value ratio of 84.9%.

Notes:
All figures are in euros unless otherwise noted.

The applicable methodologies are European CMBS Rating Methodology, European CMBS Surveillance, Legal Criteria for European Structured Finance Transactions, Unified Interest Rate Model for European Securitisations and Derivative Criteria for European Structured Finance Transactions, which can be found on our website under Methodologies

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

The sources of information used for this rating include Taurus CMBS (Pan-Europe) 2007-1 Limited and Capita Asset Services (London) Limited. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.