The information in this Free Writing Prospectus is not complete and may be changed by delivery of information prior to the time of sale. This Free Writing Prospectus is not an offer to sell these securities nor is it soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
THE INFORMATION IN THIS FREE WRITING PROSPECTUS MAY BE AMENDED OR COMPLETED PRIOR TO SALE, DATED MARCH 4, 2007
PROSPECTUS SUPPLEMENT
(To accompany prospectus dated October 19, 2006)
$7,320,615,000 (Approximate)
(Offered Certificates)
Wachovia Bank Commercial Mortgage Trust
Commercial Mortgage Pass-Through Certificates
Series 2007-C30
(Issuing Entity)
Wachovia Commercial Mortgage Securities, Inc.
(Depositor)
Wachovia Bank, National Association
Artesia Mortgage Capital Corporation
(Sponsors)
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You should carefully consider the risk factors beginning on page S-53 of this prospectus supplement and on page 14 of the accompanying prospectus. |
Neither the offered certificates nor the underlying mortgage loans are insured or guaranteed by any government agency or instrumentality. |
The offered certificates will represent interests in the issuing entity only. They will not represent obligations of the sponsors, the depositor, any of their respective affiliates or any other party. The offered certificates will not be listed on any national securities exchange or any automated quotation system of any registered securities association. |
This prospectus supplement may be used to offer and sell the offered certificates only if it is accompanied by the prospectus dated October 19, 2006. |
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The trust fund:
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• | As of March 11, 2007, the mortgage loans included in the trust fund will have an aggregate principal balance of approximately $7,903,498,737. |
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• | The trust fund will consist of a pool of 263 fixed rate mortgage loans. |
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• | The mortgage loans are secured by first liens on commercial and multifamily properties. |
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• | All of the mortgage loans were originated or acquired by Wachovia Bank, National Association, Artesia Mortgage Capital Corporation and Column Financial, Inc. |
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• | The trust fund will issue 31 classes of certificates. |
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• | Only the 14 classes of offered certificates described in the following table are being offered by this prospectus supplement and the accompanying prospectus. Distributions on the certificates will occur on a monthly basis, commencing April 2007. |
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• | The only credit support for any class of offered certificates will consist of the subordination of the classes of certificates, if any, having a lower payment priority. |
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Class | ![]() | ![]() | Original Certificate Balance(1) | ![]() | ![]() | Percentage of Cut-Off Date Pool Balance | ![]() | ![]() | Pass-Through Rate Description | ![]() | ![]() | Assumed Final Distribution Dates(2) | ![]() | ![]() | CUSIP No. | ![]() | ![]() | Expected Fitch/ Moody’s/S&P Rating(3) | |||
Class A-1 | ![]() | ![]() | ![]() | $ | 35,195,000 | ![]() | ![]() | ![]() | 0.445% | ![]() | ![]() | Fixed | ![]() | ![]() | November 15, 2011 | ![]() | ![]() | ![]() | ![]() | AAA/Aaa/AAA | |
Class A-2 | ![]() | ![]() | ![]() | $ | 100,000,000 | ![]() | ![]() | ![]() | 1.265% | ![]() | ![]() | Fixed | ![]() | ![]() | January 15, 2012 | ![]() | ![]() | ![]() | ![]() | AAA/Aaa/AAA | |
Class A-3 | ![]() | ![]() | ![]() | $ | 908,744,000 | ![]() | ![]() | ![]() | 11.498% | ![]() | ![]() | Fixed | ![]() | ![]() | March 15, 2012 | ![]() | ![]() | ![]() | ![]() | AAA/Aaa/AAA | |
Class A-4 | ![]() | ![]() | ![]() | $ | 195,542,000 | ![]() | ![]() | ![]() | 2.474% | ![]() | ![]() | Fixed | ![]() | ![]() | March 15, 2014 | ![]() | ![]() | ![]() | ![]() | AAA/Aaa/AAA | |
Class A-PB | ![]() | ![]() | ![]() | $ | 126,906.000 | ![]() | ![]() | ![]() | 1.606% | ![]() | ![]() | Fixed | ![]() | ![]() | September 15, 2016 | ![]() | ![]() | ![]() | ![]() | AAA/Aaa/AAA | |
Class A-5 | ![]() | ![]() | ![]() | $ | 1,876,383,000 | ![]() | ![]() | ![]() | 23.741% | ![]() | ![]() | Fixed | ![]() | ![]() | January 15, 2017 | ![]() | ![]() | ![]() | ![]() | AAA/Aaa/AAA | |
Class A-1A | ![]() | ![]() | ![]() | $ | 2,289,679,000 | ![]() | ![]() | ![]() | 28.970% | ![]() | ![]() | Fixed(4) | ![]() | ![]() | January 15, 2017 | ![]() | ![]() | ![]() | ![]() | AAA/Aaa/AAA | |
Class A-M | ![]() | ![]() | ![]() | $ | 790,349,000 | ![]() | ![]() | ![]() | 10.000% | ![]() | ![]() | Fixed(4) | ![]() | ![]() | February 15, 2017 | ![]() | ![]() | ![]() | ![]() | AAA/Aaa/AAA | |
Class A-J | ![]() | ![]() | ![]() | $ | 671,798,000 | ![]() | ![]() | ![]() | 8.500% | ![]() | ![]() | Fixed(4) | ![]() | ![]() | February 15, 2017 | ![]() | ![]() | ![]() | ![]() | AAA/Aaa/AAA | |
Class B | ![]() | ![]() | ![]() | $ | 49,397,000 | ![]() | ![]() | ![]() | 0.625% | ![]() | ![]() | Fixed(4) | ![]() | ![]() | February 15, 2017 | ![]() | ![]() | ![]() | ![]() | AA+/Aa1/AA+ | |
Class C | ![]() | ![]() | ![]() | $ | 79,035,000 | ![]() | ![]() | ![]() | 1.000% | ![]() | ![]() | Fixed(4) | ![]() | ![]() | February 15, 2017 | ![]() | ![]() | ![]() | ![]() | AA/Aa2/AA | |
Class D | ![]() | ![]() | ![]() | $ | 69,155,000 | ![]() | ![]() | ![]() | 0.875% | ![]() | ![]() | Fixed(4) | ![]() | ![]() | March 15, 2017 | ![]() | ![]() | ![]() | ![]() | AA−/Aa3/AA− | |
Class E | ![]() | ![]() | ![]() | $ | 59,277,000 | ![]() | ![]() | ![]() | 0.750% | ![]() | ![]() | Fixed(4) | ![]() | ![]() | March 15, 2017 | ![]() | ![]() | ![]() | ![]() | A+/A1/A+ | |
Class F | ![]() | ![]() | ![]() | $ | 69,155,000 | ![]() | ![]() | ![]() | 0.875% | ![]() | ![]() | Fixed(4) | ![]() | ![]() | March 15, 2017 | ![]() | ![]() | ![]() | ![]() | A/A2/A | |
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(Footnotes explaining the table are on page S-3) |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (‘‘SEC’’) (SEC File No. 333-131262) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the depositor, any underwriter or any dealer participating in the offering will arrange to send you the prospectus after filing if you request it by calling toll free 1-800-745-2063 (8 a.m.-5 p.m. EST).
Neither the SEC nor any state securities commission has approved or disapproved the offered certificates or has determined that this prospectus supplement or the accompanying prospectus is accurate or complete. Any representation to the contrary is unlawful.
Wachovia Capital Markets, LLC is acting as lead manager for this offering. Credit Suisse Securities (USA) LLC is acting as sole bookrunner with respect to 7.2% of the Class A-5 certificates. Wachovia Capital Markets, LLC is acting as sole bookrunner with respect to the remainder of the Class A-5 certificates and all other classes of offered certificates. Credit Suisse Securities (USA) LLC and Goldman, Sachs & Co. are acting as co-managers for this offering. Wachovia Capital Markets, LLC, Credit Suisse Securities (USA) LLC and Goldman, Sachs & Co. are required to purchase the offered certificates from us, subject to certain conditions. The underwriters will offer the offered certificates to the public from time to time in negotiated transactions or otherwise at varying prices to be determined at the time of sale. It is intended that Wachovia Securities International Limited will act as a member of the selling group on behalf of Wachovia Capital Markets, LLC and may sell offered certificates on behalf of Wachovia Capital Markets, LLC in certain jurisdictions. We expect to receive from this offering approximately % of the initial certificate balance of the offered certificates, plus accrued interest from March 1, 2007, before deducting expenses.
We expect that delivery of the offered certificates will be made in book-entry form on or about March 28, 2007.
WACHOVIA SECURITIES
Credit Suisse
Goldman, Sachs & Co.
Merrill Lynch & Co.
March , 2007
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IMPORTANT NOTICE REGARDING THE OFFERED CERTIFICATES
The certificates referred to in these materials, and the asset pools backing them, are subject to modification or revision (including the possibility that one or more classes of certificates may be split, combined or eliminated at any time prior to issuance or availability of a final prospectus) and are offered on a ‘‘when, as and if issued’’ basis. You understand that, when you are considering the purchase of these certificates, a contract of sale will come into being no sooner than the date on which the relevant class has been priced and we have confirmed the allocation of certificates to be made to you; any ‘‘indication of interest’’ expressed by you, and any ‘‘soft circles’’ generated by us, will not create binding contractual obligation for you or us.
As a result of the foregoing, you may commit to purchase offered certificates that have characteristics that may change, and you are advised that all or a portion of the offered certificates may not be issued that have the characteristics described in these materials. Our obligation to sell offered certificates to you is conditioned on the offered certificates and the underlying transaction that are actually issued having the characteristics described in these materials. If we determine that a condition is not satisfied in any material respect, we will notify you, and neither the depositor nor any underwriter will have any obligation to you to deliver any portion of the certificates which you have committed to purchase, and there will be no liability between us as a consequence of the non delivery.
You have requested that the underwriters provide to you information in connection with your consideration of the purchase of certain offered certificates described in this prospectus supplement. This Free Writing Prospectus is being provided to you for informative purposes only in response to your specific request. The underwriters described in this Free Writing Prospectus may from time to time perform investment banking services for, or solicit investment banking business from, any company named in this prospectus supplement. The underwriters and/or their employees may from time to time have a long or short position in any contract or certificate discussed in this Free Writing Prospectus.
The information contained herein supersedes any previous such information delivered to you and may be superseded by information delivered to you prior to the time of sale. This Free Writing Prospectus is also referred to herein as the ‘‘prospectus supplement’’.
This Free Writing Prospectus does not contain all information that is required to be included in the prospectus and the prospectus supplement.
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
We provide information to you about the offered certificates in two separate documents that progressively provide more detail: (a) the accompanying prospectus, which provides general information, some of which may not apply to the offered certificates and (b) this prospectus supplement, which describes the specific terms of the offered certificates. You should read both this prospectus supplement and the prospectus before investing in any of the offered certificates.
You should rely only on the information contained in this prospectus supplement and the accompanying prospectus. We have not authorized anyone to provide you with information that is different. The information in this document may only be accurate as of the date of this document.
This prospectus supplement begins with several introductory sections describing the offered certificates and the trust fund in abbreviated form:
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• | SUMMARY OF PROSPECTUS SUPPLEMENT, commencing on page S-6 of this prospectus supplement, which gives a brief introduction of the key features of the offered certificates and a description of the mortgage loans included in the trust fund; and |
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• | RISK FACTORS, commencing on page S-53 of this prospectus supplement, which describes risks that apply to the offered certificates which are in addition to those described in the accompanying prospectus. |
This prospectus supplement and the accompanying prospectus include cross references to sections in these materials where you can find further related discussions. The Table of Contents in this prospectus supplement and the accompanying prospectus identify the pages where these sections are located.
S-1
You can find a listing of the pages where capitalized terms used in this prospectus supplement are defined under the caption ‘‘INDEX OF DEFINED TERMS’’ beginning on page S-250 in this prospectus supplement.
In this prospectus supplement, the terms ‘‘depositor,’’ ‘‘we,’’ ‘‘us’’ and ‘‘our’’ refer to Wachovia Commercial Mortgage Securities, Inc.
We do not intend this prospectus supplement and the accompanying prospectus to be an offer or solicitation:
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• | if used in a jurisdiction in which such offer or solicitation is not authorized; |
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• | if the person making such offer or solicitation is not qualified to do so; or |
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• | if such offer or solicitation is made to anyone to whom it is unlawful to make such offer or solicitation. |
This prospectus supplement and the accompanying prospectus may be used by us, Wachovia Capital Markets, LLC, our affiliate, and any other of our affiliates when required under the federal securities laws in connection with offers and sales of offered certificates in furtherance of market-making activities in offered certificates. Wachovia Capital Markets, LLC or any such other affiliate may act as principal or agent in these transactions. Sales will be made at prices related to prevailing market prices at the time of sale or otherwise.
EUROPEAN ECONOMIC AREA
In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (as defined below) (each, a ‘‘Relevant Member State’’), each underwriter has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the ‘‘Relevant Implementation Date’’) it has not made and will not make an offer of certificates to the public in that Relevant Member State prior to the publication of a prospectus in relation to the certificates which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of certificates to the public in that Relevant Member State at any time:
(a) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;
(b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000; and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; or
(c) in any other circumstances which do not require the publication by the issuer of a prospectus pursuant to Article 3 of the Prospectus Directive.
For the purposes of this provision, the expression an ‘‘offer of certificates to the public’’ in relation to any certificates in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the certificates to be offered so as to enable an investor to decide to purchase or subscribe the certificates, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression ‘‘Prospectus Directive’’ means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.
UNITED KINGDOM
Each underwriter has represented and agreed that:
(a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the
S-2
meaning of Section 21 of the Financial Services and Markets Act 2000 (the ‘‘FSMA’’)) received by it in connection with the issue or sale of the certificates in circumstances in which Section 21(1) of the FSMA does not apply to the issuer; and
(b) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the certificates in, from or otherwise involving the United Kingdom.
NOTICE TO UNITED KINGDOM INVESTORS
The distribution of this prospectus if made by a person who is not an authorized person under the FSMA, is being made only to, or directed only at persons who (1) are outside the United Kingdom, or (2) have professional experience in matters relating to investments, or (3) are persons falling within Articles 49(2)(a) through (d) (‘‘high net worth companies, unincorporated associations, etc.’’) or 19 (Investment Professionals) of the Financial Services and Market Act 2000 (Financial Promotion) Order 2005 (all such persons together being referred to as the ‘‘Relevant Persons’’). This prospectus must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this prospectus relates, including the offered certificates, is available only to Relevant Persons and will be engaged in only with Relevant Persons.
Potential investors in the United Kingdom are advised that all, or most, of the protections afforded by the United Kingdom regulatory system will not apply to an investment in the offered certificates and that compensation will not be available under the United Kingdom Financial Services Compensation Scheme.
(Footnotes to table on the front cover)
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(1) | Subject to a permitted variance of plus or minus 5.0%. |
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(2) | The ‘‘Assumed Final Distribution Date’’ has been determined on the basis of the assumptions set forth in ‘‘DESCRIPTION OF THE CERTIFICATES—Assumed Final Distribution Date; Rated Final Distribution Date’’ in this prospectus supplement and a 0% CPR (as defined in ‘‘YIELD AND MATURITY CONSIDERATIONS—Weighted Average Life’’ in this prospectus supplement). The ‘‘Rated Final Distribution Date’’ is the distribution date to occur in December 2043. See ‘‘DESCRIPTION OF THE CERTIFICATES—Assumed Final Distribution Date; Rated Final Distribution Date’’ and ‘‘RATINGS’’ in this prospectus supplement. |
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(3) | By each of Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies Inc., Moody’s Investors Service, Inc. and Fitch, Inc. See ‘‘RATINGS’’ in this prospectus supplement. |
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(4) | The pass-through rate applicable to each of the Class A-1A, Class A-M, Class A-J, Class B, Class C, Class D, Class E and Class F certificates for any distribution date will be subject to a maximum rate equal to the applicable weighted average net mortgage rate calculated as described in this prospectus supplement for the related date. |
S-3
TABLE OF CONTENTS
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S-4
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S-5
SUMMARY OF PROSPECTUS SUPPLEMENT
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• | This summary highlights selected information from this prospectus supplement and does not contain all of the information that you need to consider in making your investment decision. To understand the terms of the offered certificates, you must carefully read this entire prospectus supplement and the accompanying prospectus. |
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• | This summary provides an overview of certain calculations, cash flows and other information to aid your understanding and is qualified by the full description of these calculations, cash flows and other information in this prospectus supplement and the accompanying prospectus. |
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• | We provide information in this prospectus supplement on the certificates that are not offered by this prospectus supplement only to enhance your understanding of the offered certificates. We are not offering the non-offered certificates pursuant to this prospectus supplement. |
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• | For purposes of making distributions to the Class A-1, Class A-2, Class A-3, Class A-4, Class A-PB, Class A-5 and Class A-1A certificates, the pool of mortgage loans will be deemed to consist of 2 distinct loan groups, loan group 1 and loan group 2. |
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• | Unless otherwise stated, all percentages of the mortgage loans included in the trust fund, or of any specified group of mortgage loans included in the trust fund, referred to in this prospectus supplement are calculated using the aggregate principal balance of the mortgage loans included in the trust fund as of the cut-off date (which is March 11, 2007, with respect to 261 mortgage loans, March 1, 2007, with respect to 1 mortgage loan and March 8, 2007, with respect to 1 mortgage loan), after giving effect to payments due on or before such date whether or not received. The cut-off date balance of each mortgage loan included in the trust fund and each cut-off date certificate balance in this prospectus supplement assumes the timely receipt of principal scheduled to be paid (if any) on each mortgage loan and no defaults, delinquencies or prepayments on any mortgage loan on or before the related cut-off date. Percentages of mortgaged properties are references to the percentages of the aggregate principal balance of all the mortgage loans included in the trust fund, or of any specified group of mortgage loans included in the trust fund, as of the cut-off date represented by the aggregate principal balance of the related mortgage loans as of the cut-off date. |
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• | Three (3) mortgage loans, the Peter Cooper Village & Stuyvesant Town mortgage loan, the State Street Financial Center mortgage loan and the 485 Lexington Avenue mortgage loan, are part of a split loan structure where the companion loan(s) that is part of the split loan structure is pari passu in right of entitlement to payment with the mortgage loan. One (1) mortgage loan, the Five Times Square mortgage loan, is part of a split loan structure where one companion loan is pari passu in right of entitlement to payment with the mortgage loan and one companion loan is subordinate in right of entitlement with respect to the other companion loans. Certain other mortgage loans are each part of a split loan structure in which the related companion loan(s) is subordinate to the related mortgage loan. Amounts attributable to any companion loan will not be assets of the trust fund and will be beneficially owned by the holder of such companion loan. |
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• | All numerical or statistical information concerning the mortgage loans included in the trust fund is provided on an approximate basis and excludes information on the subordinate companion loans. |
S-6
OVERVIEW OF THE CERTIFICATES
The table below lists certain summary information concerning the Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2007-C30, which we are offering pursuant to the accompanying prospectus and this prospectus supplement. Each certificate represents an interest in the mortgage loans included in the trust fund and the other assets of the trust fund. The table also describes the certificates that are not offered by this prospectus supplement (other than the Class Z, Class R-I and Class R-II certificates) which have not been registered under the Securities Act of 1933, as amended, and which will be sold to investors in private transactions.
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Class | ![]() | ![]() | Closing Date Certificate Balance or Notional Amount(1) | ![]() | ![]() | Percentage of Cut-Off Date Pool Balance | ![]() | ![]() | Credit Support | ![]() | ![]() | Pass-Through Rate Description | ![]() | ![]() | Initial Pass- Through Rate | ![]() | ![]() | Weighted Average Life (years)(2) | ![]() | ![]() | Cash Flow or Principal Window (Mon./Yr.)(2) | ![]() | ![]() | Expected Fitch/ Moody’s/S&P Rating(3) | |||||||||
Class A-1 | ![]() | ![]() | ![]() | $ | 35,195,000 | ![]() | ![]() | ![]() | 0.445% | ![]() | ![]() | 30.000% | ![]() | ![]() | ![]() | ![]() | Fixed | ![]() | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | 2.79 | ![]() | ![]() | ![]() | 04/07 - - 11/11 | ![]() | ![]() | AAA/Aaa/AAA |
Class A-2 | ![]() | ![]() | ![]() | $ | 100,000,000 | ![]() | ![]() | ![]() | 1.265% | ![]() | ![]() | 30.000% | ![]() | ![]() | ![]() | ![]() | Fixed | ![]() | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | 4.77 | ![]() | ![]() | ![]() | 11/11 - - 01/12 | ![]() | ![]() | AAA/Aaa/AAA |
Class A-3 | ![]() | ![]() | ![]() | $ | 908,744,000 | ![]() | ![]() | ![]() | 11.498% | ![]() | ![]() | 30.000% | ![]() | ![]() | ![]() | ![]() | Fixed | ![]() | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | 4.84 | ![]() | ![]() | ![]() | 01/12 - - 03/12 | ![]() | ![]() | AAA/Aaa/AAA |
Class A-4 | ![]() | ![]() | ![]() | $ | 195,542,000 | ![]() | ![]() | ![]() | 2.474% | ![]() | ![]() | 30.000% | ![]() | ![]() | ![]() | ![]() | Fixed | ![]() | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | 6.96 | ![]() | ![]() | ![]() | 12/13 - - 03/14 | ![]() | ![]() | AAA/Aaa/AAA |
Class A-PB | ![]() | ![]() | ![]() | $ | 126,906,000 | ![]() | ![]() | ![]() | 1.606% | ![]() | ![]() | 30.000% | ![]() | ![]() | ![]() | ![]() | Fixed | ![]() | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | 7.36 | ![]() | ![]() | ![]() | 03/12 - - 09/16 | ![]() | ![]() | AAA/Aaa/AAA |
Class A-5 | ![]() | ![]() | ![]() | $ | 1,876,383,000 | ![]() | ![]() | ![]() | 23.741% | ![]() | ![]() | 30.000% | ![]() | ![]() | ![]() | ![]() | Fixed | ![]() | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | 9.77 | ![]() | ![]() | ![]() | 09/16 - - 01/17 | ![]() | ![]() | AAA/Aaa/AAA |
Class A-1A | ![]() | ![]() | ![]() | $ | 2,289,679,000 | ![]() | ![]() | ![]() | 28.970% | ![]() | ![]() | 30.000% | ![]() | ![]() | ![]() | ![]() | Fixed | (4) | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | 9.35 | ![]() | ![]() | ![]() | 04/07 - - 01/17 | ![]() | ![]() | AAA/Aaa/AAA |
Class A-M | ![]() | ![]() | ![]() | $ | 790,349,000 | ![]() | ![]() | ![]() | 10.000% | ![]() | ![]() | 20.000% | ![]() | ![]() | ![]() | ![]() | Fixed | (4) | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | 9.85 | ![]() | ![]() | ![]() | 01/17 - - 02/17 | ![]() | ![]() | AAA/Aaa/AAA |
Class A-J | ![]() | ![]() | ![]() | $ | 671,798,000 | ![]() | ![]() | ![]() | 8.500% | ![]() | ![]() | 11.500% | ![]() | ![]() | ![]() | ![]() | Fixed | (4) | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | 9.88 | ![]() | ![]() | ![]() | 02/17 - - 02/17 | ![]() | ![]() | AAA/Aaa/AAA |
Class B | ![]() | ![]() | ![]() | $ | 49,397,000 | ![]() | ![]() | ![]() | 0.625% | ![]() | ![]() | 10.875% | ![]() | ![]() | ![]() | ![]() | Fixed | (4) | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | 9.88 | ![]() | ![]() | ![]() | 02/17 - - 02/17 | ![]() | ![]() | AA+/Aa1/AA+ |
Class C | ![]() | ![]() | ![]() | $ | 79,035,000 | ![]() | ![]() | ![]() | 1.000% | ![]() | ![]() | 9.875% | ![]() | ![]() | ![]() | ![]() | Fixed | (4) | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | 9.88 | ![]() | ![]() | ![]() | 02/17 - - 02/17 | ![]() | ![]() | AA/Aa2/AA |
Class D | ![]() | ![]() | ![]() | $ | 69,155,000 | ![]() | ![]() | ![]() | 0.875% | ![]() | ![]() | 9.000% | ![]() | ![]() | ![]() | ![]() | Fixed | (4) | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | 9.90 | ![]() | ![]() | ![]() | 02/17 - - 03/17 | ![]() | ![]() | AA−/Aa3/AA− |
Class E | ![]() | ![]() | ![]() | $ | 59,277,000 | ![]() | ![]() | ![]() | 0.750% | ![]() | ![]() | 8.250% | ![]() | ![]() | ![]() | ![]() | Fixed | (4) | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | 9.96 | ![]() | ![]() | ![]() | 03/17 - - 03/17 | ![]() | ![]() | A+/A1/A+ |
Class F | ![]() | ![]() | ![]() | $ | 69,155,000 | ![]() | ![]() | ![]() | 0.875% | ![]() | ![]() | 7.375% | ![]() | ![]() | ![]() | ![]() | Fixed | (4) | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | 9.96 | ![]() | ![]() | ![]() | 03/17 - - 03/17 | ![]() | ![]() | A/A2/A |
Class G | ![]() | ![]() | ![]() | $ | 98,794,000 | ![]() | ![]() | ![]() | 1.250% | ![]() | ![]() | 6.125% | ![]() | ![]() | ![]() | ![]() | Fixed | (4) | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | (6 | ) | ![]() | ![]() | (6) | ![]() | ![]() | A−/A3/A− |
Class H | ![]() | ![]() | ![]() | $ | 79,035,000 | ![]() | ![]() | ![]() | 1.000% | ![]() | ![]() | 5.125% | ![]() | ![]() | ![]() | ![]() | WAC | (5) | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | (6 | ) | ![]() | ![]() | (6) | ![]() | ![]() | BBB+/Baa1/BBB+ |
Class J | ![]() | ![]() | ![]() | $ | 88,914,000 | ![]() | ![]() | ![]() | 1.125% | ![]() | ![]() | 4.000% | ![]() | ![]() | ![]() | ![]() | WAC | (5) | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | (6 | ) | ![]() | ![]() | (6) | ![]() | ![]() | BBB/Baa2/BBB |
Class K | ![]() | ![]() | ![]() | $ | 79,035,000 | ![]() | ![]() | ![]() | 1.000% | ![]() | ![]() | 3.000% | ![]() | ![]() | ![]() | ![]() | WAC | (5) | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | (6 | ) | ![]() | ![]() | (6) | ![]() | ![]() | BBB−/Baa3/BBB− |
Class L | ![]() | ![]() | ![]() | $ | 39,518,000 | ![]() | ![]() | ![]() | 0.500% | ![]() | ![]() | 2.500% | ![]() | ![]() | ![]() | ![]() | Fixed | (4) | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | (6 | ) | ![]() | ![]() | (6) | ![]() | ![]() | NR/Ba1/BB+ |
Class M | ![]() | ![]() | ![]() | $ | 19,759,000 | ![]() | ![]() | ![]() | 0.250% | ![]() | ![]() | 2.250% | ![]() | ![]() | ![]() | ![]() | Fixed | (4) | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | (6 | ) | ![]() | ![]() | (6) | ![]() | ![]() | NR/Ba2/BB |
Class N | ![]() | ![]() | ![]() | $ | 29,638,000 | ![]() | ![]() | ![]() | 0.375% | ![]() | ![]() | 1.875% | ![]() | ![]() | ![]() | ![]() | Fixed | (4) | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | (6 | ) | ![]() | ![]() | (6) | ![]() | ![]() | NR/Ba3/BB– |
Class O | ![]() | ![]() | ![]() | $ | 19,758,000 | ![]() | ![]() | ![]() | 0.250% | ![]() | ![]() | 1.625% | ![]() | ![]() | ![]() | ![]() | Fixed | (4) | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | (6 | ) | ![]() | ![]() | (6) | ![]() | ![]() | NR/B1/NR |
Class P | ![]() | ![]() | ![]() | $ | 9,880,000 | ![]() | ![]() | ![]() | 0.125% | ![]() | ![]() | 1.500% | ![]() | ![]() | ![]() | ![]() | Fixed | (4) | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | (6 | ) | ![]() | ![]() | (6) | ![]() | ![]() | NR/B2/NR |
Class Q | ![]() | ![]() | ![]() | $ | 19,759,000 | ![]() | ![]() | ![]() | 0.250% | ![]() | ![]() | 1.250% | ![]() | ![]() | ![]() | ![]() | Fixed | (4) | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | (6 | ) | ![]() | ![]() | (6) | ![]() | ![]() | NR/B3/NR |
Class S | ![]() | ![]() | ![]() | $ | 98,793,737 | ![]() | ![]() | ![]() | 1.250% | ![]() | ![]() | 0.000% | ![]() | ![]() | ![]() | ![]() | Fixed | (4) | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | (6 | ) | ![]() | ![]() | (6) | ![]() | ![]() | NR/NR/NR |
Class X-P | ![]() | ![]() | ![]() | $ | 1,912,455,500 | ![]() | ![]() | ![]() | N/A | ![]() | ![]() | N/A | ![]() | ![]() | ![]() | ![]() | Variable-IO | (7)(8) | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | (6 | ) | ![]() | ![]() | (6) | ![]() | ![]() | AAA/Aaa/AAA |
Class X-C | ![]() | ![]() | ![]() | $ | 1,975,874,684 | ![]() | ![]() | ![]() | N/A | ![]() | ![]() | N/A | ![]() | ![]() | ![]() | ![]() | Variable-IO | (7)(8) | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | (6 | ) | ![]() | ![]() | (6) | ![]() | ![]() | AAA/Aaa/AAA |
Class X-W | ![]() | ![]() | ![]() | $ | 5,927,624,052 | ![]() | ![]() | ![]() | N/A | ![]() | ![]() | N/A | ![]() | ![]() | ![]() | ![]() | Variable-IO | (7)(8) | ![]() | ![]() | % | ![]() | ![]() | ![]() | ![]() | (6 | ) | ![]() | ![]() | (6) | ![]() | ![]() | AAA/Aaa/AAA |
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(1) | Subject to a permitted variance of plus or minus 5.0%. |
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(2) | Based on no prepayments and the other assumptions set forth under ‘‘YIELD AND MATURITY CONSIDERATIONS—Weighted Average Life’’ in this prospectus supplement. |
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(3) | By each of Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., Moody’s Investors Service, Inc. and Fitch, Inc. See ‘‘RATINGS’’ in this prospectus supplement. |
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(4) | The pass-through rate applicable to each of the Class A-1A, Class A-M, Class A-J, Class B, Class C, Class D, Class E, Class F, Class G, Class L, Class M, Class N, Class O, Class P, Class Q and Class S certificates for any distribution date will be subject to a maximum rate equal to the applicable weighted average net mortgage rate (calculated as described in this prospectus supplement) for the related date. |
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(5) | The pass-through rate applicable to each of the Class H, Class J and Class K certificates for any distribution date will be equal to the applicable weighted average net mortgage rate (calculated as described in this prospectus supplement) for the related date. |
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(6) | Not offered by this prospectus supplement. Any information we provide herein regarding the terms of these certificates is provided only to enhance your understanding of the offered certificates. |
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(7) | None of the Class X-P certificates, the Class X-C certificates or the Class X-W certificates will have a certificate balance and their respective holders will not receive distributions of principal, but such holders are entitled to receive payments of the aggregate interest accrued on the notional amount of the applicable class of certificates, as described in this prospectus supplement. The interest rate applicable to each of the Class X-P certificates, the Class X-C certificates and the Class X-W certificates for each distribution date will be as described in this prospectus supplement. See ‘‘DESCRIPTION OF THE CERTIFICATES—Pass-Through Rates’’ in this prospectus supplement. |
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(8) | The Class X-P, Class X-C and Class X-W certificates are not offered by this prospectus supplement. Any information we provide in this prospectus supplement regarding the terms of these certificates is provided only to enhance your understanding of the offered certificates. The Class X-P, Class X-C and Class X-W certificates will not have a certificate balance and their holders will not receive distributions of principal, but these holders are entitled to receive payments of the aggregate interest accrued on the respective notional amount of the Class X-P, Class X-C and Class X-W certificates, as described in this prospectus supplement. The interest rate applicable to the Class X-P, Class X-C and Class X-W certificates for each distribution date will be as described in this prospectus supplement. See ‘‘DESCRIPTION OF THE CERTIFICATES—Pass-Through Rates’’ in this prospectus supplement. |
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S-8
THE PARTIES
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The Trust Fund | ![]() | The trust fund will be created on or about the closing date pursuant to a pooling and servicing agreement, dated as of March 1, 2007, by and among the depositor, the master servicer, the special servicer and the trustee. |
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The Depositor | ![]() | Wachovia Commercial Mortgage Securities, Inc. We are a wholly owned subsidiary of Wachovia Bank, National Association, which is one of the mortgage loan sellers, a sponsor, the master servicer and an affiliate of one of the underwriters. Our principal executive office is located at 301 South College Street, Charlotte, North Carolina 28288-0166 and our telephone number is (704) 374-6161. Neither we nor any of our affiliates have insured or guaranteed the offered certificates. For more detailed information, see ‘‘THE DEPOSITOR’’ in the accompanying prospectus. |
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![]() | On the closing date, we will sell the mortgage loans and related assets to be included in the trust fund to the trustee to create the trust fund. | |
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The Issuing Entity | ![]() | A common law trust, created under the laws of the State of New York, to be established on the closing date under the pooling and servicing agreement. The issuing entity is also sometimes referred to herein as the trust fund. For more detailed information, see ‘‘DESCRIPTION OF THE CERTIFICATES—The Issuing Entity’’ in this prospectus supplement and the accompanying prospectus. |
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The Sponsors | ![]() | Each of Wachovia Bank, National Association and Artesia Mortgage Capital Corporation is a sponsor for this transaction. For more information, see ‘‘DESCRIPTION OF THE MORTGAGE POOL—The Sponsors’’ in this prospectus supplement and ‘‘THE SPONSOR’’ in the accompanying prospectus. |
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The Mortgage Loan Sellers | ![]() | Each of the sponsors and Column Financial, Inc. will be a mortgage loan seller for this transaction. For more information, see ‘‘DESCRIPTION OF THE MORTGAGE POOL—The Mortgage Loan Sellers’’ in this prospectus supplement. Wachovia Bank, National Association is the master servicer, a sponsor and is an affiliate of the depositor and one of the underwriters. Column Financial, Inc. is an affiliate of one of the underwriters. The mortgage loan sellers will sell and assign to us on the closing date the mortgage loans to be included in the trust fund. See ‘‘DESCRIPTION OF THE MORTGAGE POOL—Representations and Warranties; Repurchases and Substitutions’’ in this prospectus supplement. |
S-9
Mortgage Loans by Mortgage Loan Seller
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Mortgage Loan Seller | ![]() | ![]() | Number of Mortgage Loans | ![]() | ![]() | Aggregate Cut-Off Date Balance | ![]() | ![]() | Percentage of Cut-Off Date Pool Balance | ![]() | ![]() | Percentage of Cut-Off Date Group 1 Balance | ![]() | ![]() | Percentage of Cut-Off Date Group 2 Balance | |||||||||||||||
Wachovia Bank, National Association* | ![]() | ![]() | ![]() | ![]() | 195 | ![]() | ![]() | ![]() | ![]() | $ | 7,013,792,087 | ![]() | ![]() | ![]() | ![]() | ![]() | 88.7 | % | ![]() | ![]() | ![]() | ![]() | 86.4 | % | ![]() | ![]() | ![]() | ![]() | 94.4 | % |
Artesia Mortgage Capital Corporation | ![]() | ![]() | ![]() | ![]() | 68 | ![]() | ![]() | ![]() | ![]() | ![]() | 754,706,651 | ![]() | ![]() | ![]() | ![]() | ![]() | 9.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 11.2 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.6 | ![]() |
Column Financial, Inc.* | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 135,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.4 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Total | ![]() | ![]() | ![]() | ![]() | 263 | ![]() | ![]() | ![]() | ![]() | $ | 7,903,498,737 | ![]() | ![]() | ![]() | ![]() | ![]() | 100.0 | % | ![]() | ![]() | ![]() | ![]() | 100.0 | % | ![]() | ![]() | ![]() | ![]() | 100.0 | % |
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* | With respect to the 485 Lexington Avenue mortgage loan (loan number 5), representing 4.0% of the mortgage pool (5.6% of loan group 1), a 40% interest in the whole loan is being sold to the trust fund by Wachovia Bank, National Association, and a 30% interest in the whole loan is being sold to the trust fund by Column Financial, Inc. (the remaining 30% interest is held by Morgan Stanley Mortgage Capital, Inc.) Both mortgage loan sellers are credited with the mortgage loan but are only credited with their respective pro rata portion of that mortgage loan. |
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The Master Servicer | ![]() | Wachovia Bank, National Association. Wachovia Bank, National Association is one of the mortgage loan sellers, a sponsor and an affiliate of the depositor and one of the underwriters. The master servicer will be primarily responsible for collecting payments and gathering information with respect to the mortgage loans included in the trust fund and the companion loans which are not part of the trust fund; provided, however, the State Street Financial Center whole loan will be serviced under the pooling and servicing agreement entered into in connection with the issuance of the LB-UBS Commercial Mortgage Trust 2007-C1, Commercial Mortgage Pass-Through Certificates, Series 2007-C1. The master servicer under the LB-UBS 2007-C1 pooling and servicing agreement is KeyCorp Real Estate Capital Markets, Inc. |
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![]() | See ‘‘SERVICING OF THE MORTGAGE LOANS—The Master Servicer’’ in this prospectus supplement. | |
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The Special Servicer | ![]() | Initially, CWCapital Asset Management LLC. The special servicer will be responsible for performing certain servicing functions with respect to the mortgage loans included in the trust fund and the companion loans which are not part of the trust fund that, in general, are in default or as to which default is imminent; provided, however, the State Street Financial Center whole loan will be specially serviced (during those periods where special servicing is required) under the pooling and servicing agreement entered into in connection with the issuance of the LB-UBS Commercial Mortgage Trust 2007-C1, Commercial Mortgage Pass-Through Certificates, Series 2007-C1. The special servicer under the LB-UBS 2007-C1 pooling and servicing agreement is Midland Loan Services, Inc. |
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![]() | Some holders of certificates (initially the holder of the Class Q certificates with respect to each mortgage loan other than the State Street Financial Center mortgage loan, One Congress Street mortgage loan, the Tyco International Building mortgage loan, the Five Times Square mortgage loan, the Morgan Apartments mortgage loan, the Eastland Center mortgage loan, the PNC Corporate Plaza mortgage loan and the Spring Mill Corporate Center mortgage loan) will have the right to replace the special servicer and to select a representative who may advise and direct the special servicer and whose approval is required for certain actions by the special servicer under certain circumstances. With respect to the One Congress Street mortgage loan, the Five Times Square mortgage loan, the Eastland Center mortgage loan, the Morgan Apartments mortgage loan, the Tyco International Building mortgage loan, the PNC Corporate Plaza mortgage loan and the Spring Mill Corporate Center mortgage loan, except during the continuance of a control appraisal period under the related intercreditor agreement, the holder of the subordinate companion loan related to each of the foregoing mortgage loans may appoint or remove the special servicer with respect to the related mortgage loan, subject to certain conditions set forth in the related intercreditor agreement. During the continuance of a control appraisal period with respect to any of the One Congress Street mortgage loan, the Five Times Square mortgage loan, the Tyco International Building mortgage loan, the Eastland Center mortgage loan, the PNC Corporate Plaza mortgage loan, the Morgan Apartments mortgage loan or the Spring Mill Corporate Center mortgage loan, the controlling class will have the right to replace the special servicer with respect to such mortgage loan. With respect to the State Street Financial Center mortgage loan, the special servicer may be removed at any time, with or without cause, but only with the consent of both the controlling class representative and the LB-UBS 2007-C1 controlling class representative, subject to certain conditions as set forth in the related intercreditor agreement. See ‘‘SERVICING OF THE MORTGAGE LOANS—The Special Servicer’’ and ‘‘—The Controlling Class Representative’’ in this prospectus supplement. | |
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![]() | It is anticipated that Cadim TACH inc. (an affiliate of the special servicer) or an affiliate will purchase certain non-offered classes of certificates (including the Class S certificates). See ‘‘SERVICING OF THE MORTGAGE LOANS—The Special Servicer’’ in this prospectus supplement. | |
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The Trustee | ![]() | Wells Fargo Bank, N.A. The trustee will be responsible for (among other things) distributing payments to certificateholders and delivering to certificateholders certain reports on the mortgage loans included in the trust fund and |
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![]() | the certificates. See ‘‘DESCRIPTION OF THE CERTIFICATES—The Trustee’’ in this prospectus supplement. The trustee under the LB-UBS 2007-C1 pooling and servicing agreement is LaSalle Bank National Association. | |
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The Underwriters | ![]() | Wachovia Capital Markets, LLC, Credit Suisse Securities (USA) LLC, Goldman, Sachs & Co. and Merrill Lynch & Co. It is intended that Wachovia Securities International Limited will act as a member of the selling group on behalf of Wachovia Capital Markets, LLC and may sell offered certificates on behalf of Wachovia Capital Markets, LLC in certain jurisdictions. Wachovia Capital Markets, LLC is an affiliate of the depositor and of Wachovia Bank, National Association, which is the master servicer, a sponsor and one of the mortgage loan sellers. Credit Suisse Securities (USA) LLC is an affiliate of one of the mortgage loan sellers. See ‘‘RISK FACTORS—The Offered Certificates—Potential Conflicts of Interest’’ in this prospectus supplement. Wachovia Capital Markets, LLC is acting as lead manager for this offering. Credit Suisse Securities (USA) LLC, Goldman, Sachs & Co. and Merrill Lynch & Co. are acting as co-managers for this offering. Credit Suisse Securities (USA) LLC is acting as sole bookrunner with respect to 7.2% of the Class A-5 certificates. Wachovia Capital Markets, LLC is acting as sole bookrunner with respect to the remainder of the Class A-5 certificates and all other classes of offered certificates. |
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Certain Affiliations | ![]() | Wachovia Bank, National Association and its affiliates are playing several roles in this transaction. Wachovia Bank, National Association is a mortgage loan seller, the master servicer and a sponsor. Wachovia Commercial Mortgage Securities, Inc. is the depositor and a wholly owned subsidiary of Wachovia Bank, National Association. Wachovia Bank, National Association, Artesia Mortgage Capital Corporation and Column Financial, Inc. originated or acquired the mortgage loans and will be selling them to the depositor. Wachovia Bank, National Association is also an affiliate of Wachovia Capital Markets, LLC, an underwriter for the offering of the certificates. Column Financial, Inc., one of the mortgage loan sellers, is an affiliate of Credit Suisse Securities (USA) LLC, an underwriter for the offering of the certificates. Further, an affiliate of the special servicer is the anticipated initial holder of certain non-offered classes of certificates. These roles and other potential relationships may give rise to conflicts of interest as further described under ‘‘RISK FACTORS—The Offered Certificates—Potential Conflicts of Interest’’ in this prospectus supplement. |
S-12
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Significant Obligors | ![]() | The mortgaged property described in Annex D and in ‘‘DESCRIPTION OF THE MORTGAGE POOL—Twenty Largest Mortgage Loans’’ securing the Peter Cooper Village & Stuyvesant Town mortgage loan represents 19.0% of the mortgage pool (65.5% of loan group 2) is a ‘‘significant obligor’’ with respect to this offering. The borrowers under the Peter Cooper Village & Stuyvesant Town mortgage loan are PCV ST Owner LP and ST Owner LP. See ‘‘DESCRIPTION OF THE MORTGAGE POOL— Significant Obligors’’, ‘‘—Twenty Largest Mortgage Loans’’ in this prospectus supplement and the description of the Peter Cooper Village & Stuyvesant Town mortgage loan in Annex D to this prospectus supplement. |
S-13
Transaction Overview
On the closing date, the mortgage loan sellers will sell the mortgage loans to the depositor, which will in turn deposit them into a common law trust created on the closing date. The trust fund, which will be the issuing entity, will be formed by a pooling and servicing agreement, to be dated as of March 1, 2007, among the depositor, the master servicer, the special servicer and the trustee. The master servicer will service the mortgage loans (other than the specially serviced mortgage loans and the State Street Financial Center whole loan (which will be serviced pursuant to the LB-UBS 2007-C1 pooling and servicing agreement)) in accordance with the pooling and servicing agreement and provide the information to the trustee necessary for the trustee to calculate distributions and other information regarding the certificates.
The transfers of the mortgage loans from the sponsors/mortgage loan sellers to the depositor and from the depositor to the issuing entity in exchange for the certificates are illustrated below:
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S-14
IMPORTANT DATES AND PERIODS
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Closing Date | ![]() | On or about March 28, 2007. |
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Cut-Off Date | ![]() | For 261 mortgage loans, representing 80.8% of the mortgage pool (211 mortgage loans in loan group 1 or 99.7% and 50 of the mortgage loans in loan group 2 or 34.5%), March 11, 2007, for 1 mortgage loan, representing 19.0% of the mortgage pool (65.5% of loan group 2), March 8, 2007 and for 1 mortgage loan, representing 0.2% of the mortgage pool (0.3% of loan group 1), March 1, 2007. The cut-off date balance of each mortgage loan included in the trust fund and each cut-off date certificate balance in this prospectus supplement assumes the timely receipt of principal scheduled to be paid (if any) on each mortgage loan and no defaults, delinquencies or prepayments on any mortgage loan on or before the related cut-off date. |
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Distribution Date | ![]() | The fourth business day following the related determination date, commencing in April, 2007. |
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Determination Date | ![]() | The 11th day of each month, or if such 11th day is not a business day, the next succeeding business day, commencing in April, 2007. |
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Collection Period | ![]() | For any distribution date, the period beginning on the 12th day in the immediately preceding month (or the day after the applicable cut-off date in the case of the first collection period) through and including the 11th day of the month in which the distribution date occurs. Notwithstanding the foregoing, in the event that the last day of a collection period is not a business day, any payments with respect to the mortgage loans which relate to such collection period and are received on the business day immediately following such last day will be deemed to have been received during such collection period and not during any other collection period, and in the event that the payment date (after giving effect to any grace period) related to any distribution date occurs after the related collection period, any amounts received on that payment date (after giving effect to any grace period) will be deemed to have been received during the related collection period and not during any other collection period. |
S-15
THE CERTIFICATES
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Offered Certificates | ![]() | We are offering to you the following 14 classes of certificates of our Commercial Mortgage Pass-Through Certificates, Series 2007-C30 pursuant to this prospectus supplement: |
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![]() | Class A-1 Class A-2 Class A-3 Class A-4 Class A-PB Class A-5 Class A-1A Class A-M Class A-J Class B Class C Class D Class E Class F | ||
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Priority of Distributions | ![]() | On each distribution date, the owners of the certificates will be entitled to distributions of payments or other collections on the mortgage loans that the master servicer collected or that the master servicer and/or the trustee advanced during or with respect to the related collection period after deducting certain fees and expenses. For purposes of making certain distributions to the Class A-1, Class A-2, Class A-3, Class A-4, Class A-PB, Class A-5 and Class A-1A certificates, the mortgage pool will be deemed to consist of 2 loan groups: |
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![]() | • | Loan group 1 will consist of all of the mortgage loans that are not secured by multifamily properties. | |
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![]() | • | Loan group 2 will consist of 51 mortgage loans that are secured by multifamily properties. | |
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![]() | Annex A-1 to this prospectus supplement sets forth the loan group designation for each mortgage loan. | |
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![]() | The trustee will distribute amounts to the extent that the money is available after the payment of fees and expenses of the master servicer, the special servicer, the trustee and the LB-UBS 2007-C1 master servicer, in the following order of priority: | |
S-16
Interest, concurrently (i) pro rata, on the Class A-1, Class A-2, Class A-3, Class A-4, Class A-PB and Class A-5 certificates from the portion of money available attributable to mortgage loans in loan group 1, (ii) on the Class A-1A certificates from the portion of money available attributable to mortgage loans in loan group 2, and (iii) pro rata, on the Class X-P, Class X-C and Class X-W certificates from any and all money attributable to the mortgage pool; provided, however, if on any distribution date, the money available on such distribution date is insufficient to pay in full the total amount of interest to be paid to any of the classes as described above, money available with respect to the entire mortgage pool will be allocated among all those classes pro rata.
Principal on the Class A-PB certificates, up to the principal distribution amount related to loan group 1, until the certificate balance of the Class A-PB certificates is reduced to the planned principal balance set forth in the table on Annex F to this prospectus supplement, and, after the Class A-1A certificate balance has been reduced to zero, the principal distribution amount relating to loan group 2 remaining after payments to the Class A-1A certificates have been made, until the certificate balance of the Class A-PB certificates is reduced to the planned principal balance set forth in the table on Annex F to this prospectus supplement.
After distributions of principal have been made from the principal distribution amount relating to loan group 1 to the Class A-PB certificates as set forth in the priority immediately preceding, principal on the Class A-1 certificates, up to the remaining principal distribution amount relating to loan group 1 and, after the Class A-1A certificate balance has been reduced to zero, the principal distribution amount relating to loan group 2 remaining after payments to the Class A-1A and Class A-PB certificates have been made, until their certificate balance is reduced to zero.
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After distributions of principal have been made from the principal distribution amount relating to loan group 1 to the Class A-PB and Class A-1 certificates as set forth in the immediately preceding priorities, principal on the Class A-2 certificates, up to the remaining principal distribution amount relating to loan group 1 and, after the Class A-1A certificate balance has been reduced to zero, the principal distribution amount relating to loan group 2 remaining after payments to the Class A-1A, Class A-PB and Class A-1 certificates have been made, until their certificate balance is reduced to zero.
After distributions of principal have been made from the principal distribution amount relating to loan group 1 to the Class A-PB, Class A-1 and Class A-2 certificates as set forth in the immediately preceding priorities, principal on the Class A-3 certificates, up to the remaining principal distribution amount relating to loan group 1 and, after the Class A-1A certificate balance has been reduced to zero, the principal distribution amount relating to loan group 2 remaining after payments to the Class A-1A, Class A-PB, Class A-1 and Class A-2 certificates have been made, until their certificate balance is reduced to zero.
After distributions of principal have been made from the principal distribution amount relating to loan group 1 to the Class A-PB, Class A-1, Class A-2 and Class A-3 certificates as set forth in the immediately preceding priorities, principal on the Class A-4 certificates, up to the remaining principal distribution amount relating to loan group 1 and, after the Class A-1A certificate balance has been reduced to zero, the principal distribution amount relating to loan group 2 remaining after payments to the Class A-1A, Class A-PB, Class A-1, Class A-2 and Class A-3 certificates have been made, until their certificate balance is reduced to zero.
S-18
After distributions of principal have been made from the principal distribution amount relating to loan group 1 to the Class A-PB, Class A-1, Class A-2, Class A-3 and Class A-4 certificates as set forth in the immediately preceding priorities, principal on the Class A-PB certificates, up to the remaining principal distribution amount relating to loan group 1 and, after the Class A-1A certificate balance has been reduced to zero, the principal distribution amount relating to loan group 2 remaining after payments to the Class A-1A, Class A-PB, Class A-1, Class A-2, Class A-3 and Class A-4 certificates have been made, until their certificate balance is reduced to zero.
After distributions of principal have been made from the principal distribution amount relating to loan group 1 to the Class A-PB, Class A-1, Class A-2, Class A-3 and Class A-4 certificates as set forth in the immediately preceding priorities, principal on the Class A-5 certificates, up to the remaining principal distribution amount relating to loan group 1 and, after the Class A-1A certificate balance has been reduced to zero, the principal distribution amount relating to loan group 2 remaining after payments to the Class A-1A, Class A-PB, Class A-1, Class A-2, Class A-3 and Class A-4 certificates have been made, until their certificate balance is reduced to zero.
Principal on the Class A-1A certificates, up to the principal distribution amount relating to loan group 2 and, after the certificate balances of the Class A-PB, Class A-1, Class A-2, Class A-3, Class A-4 and Class A-5 certificates have been reduced to zero, the principal distribution amount relating to loan group 1 remaining after payments to the Class A-PB, Class A-1, Class A-2, Class A-3, Class A-4 and Class A-5 certificates have been made, until their certificate balance is reduced to zero.
Reimbursement to the Class A-1, Class A-2, Class A-3, Class A-4, Class A-PB, Class A-5 and Class A-1A certificates, pro rata, for any realized loss and trust fund expenses borne by such certificates.
S-19
Interest on the Class A-M certificates.
Principal on the Class A-M certificates, up to the principal distribution amount, until their certificate balance is reduced to zero.
Reimbursement to the Class A-M certificates for any realized losses and trust fund expenses borne by such class.
Interest on the Class A-J certificates.
Principal on the Class A-J certificates, up to the principal distribution amount, until their certificate balance is reduced to zero.
Reimbursement to the Class A-J certificates for any realized losses and trust fund expenses borne by such class.
Interest on the Class B certificates.
Principal on the Class B certificates, up to the principal distribution amount, until their certificate balance is reduced to zero.
Reimbursement to the Class B certificates for any realized losses and trust fund expenses borne by such class.
Interest on the Class C certificates.
S-20
Principal on the Class C certificates, up to the principal distribution amount, until their certificate balance is reduced to zero.
Reimbursement to the Class C certificates for any realized losses and trust fund expenses borne by such class.
Interest on the Class D certificates.
Principal on the Class D certificates, up to the principal distribution amount, until their certificate balance is reduced to zero.
Reimbursement to the Class D certificates for any realized losses and trust fund expenses borne by such class.
Interest on the Class E certificates.
Principal on the Class E certificates, up to the principal distribution amount, until their certificate balance is reduced to zero.
Reimbursement to the Class E certificates for any realized losses and trust fund expenses borne by such class.
Interest on the Class F certificates.
Principal on the Class F certificates, up to the principal distribution amount, until their certificate balance is reduced to zero.
S-21
Reimbursement to the Class F certificates for any realized losses and trust fund expenses borne by such class.
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![]() | If, on any distribution date, the certificate balances of the Class A-M through Class S certificates have been reduced to zero, but any two or more of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-PB, Class A-5 and Class A-1A certificates remain outstanding, distributions of principal (other than distributions of principal otherwise allocable to reduce the certificate balance of the Class A-PB certificates to the planned principal amount set forth in the table on Annex F to this prospectus supplement) and interest will be made, pro rata, to the outstanding Class A-1, Class A-2, Class A-3, Class A-4, Class A-PB, Class A-5 and Class A-1A certificates. See ‘‘DESCRIPTION OF THE CERTIFICATES—Distributions’’ in this prospectus supplement. | |
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![]() | No companion loan will be part of the trust fund, and amounts received with respect to any companion loan will not be available for distributions to holders of any certificates. | |
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Interest | ![]() | On each distribution date, each class of certificates (other than the Class Z, Class R-I and Class R-II certificates) will be entitled to receive: |
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![]() | • | for each class of these certificates, one month’s interest at the applicable pass-through rate accrued during the applicable interest period, on the certificate balance or notional amount, as applicable, of each class of these certificates immediately prior to that distribution date; | |
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![]() | • | plus any interest that this class of certificates was entitled to receive on all prior distribution dates to the extent not received; | |
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![]() | • | minus (other than in the case of the Class X-P, Class X-C and the Class X-W certificates) that class’ share of any shortfalls in interest collections due to prepayments on mortgage loans included in the trust fund that are not offset by certain payments made by the master servicer; and | |
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![]() | • | minus (other than in the case of the Class X-P, Class X-C and the Class X-W certificates) that class’ allocable share of any reduction in interest accrued on any mortgage loan as a result of a modification that reduces the related mortgage rate and allows the reduction in accrued interest to be added to the stated principal balance of the mortgage loan. | |
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![]() | As reflected in the chart under ‘‘—Priority of Distributions’’ above, so long as funds are sufficient on any distribution date | |
S-22
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![]() | to make distributions of all interest on that distribution date to the Class A-1, Class A-2, Class A-3, Class A-4, Class A-PB and Class A-5 certificates, interest distributions on the Class A-1, Class A-2, Class A-3, Class A-4, Class A-PB and Class A-5 certificates will be based upon amounts available relating to mortgage loans in loan group 1 and interest distributions on the Class A-1A certificates will be based upon amounts available relating to mortgage loans in loan group 2. | |
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![]() | See ‘‘DESCRIPTION OF THE CERTIFICATES— Certificate Balances and Notional Amounts’’ and ‘‘— Distributions’’ in this prospectus supplement. | |
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![]() | The Class X-P Class X-C and Class X-W certificates will be entitled to distributions of interest only on their respective notional amounts. The notional amounts of each of these classes of certificates are calculated as described under ‘‘DESCRIPTION OF THE CERTIFICATES—Certificate Balances and Notional Amounts’’ in this prospectus supplement. | |
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![]() | Each of the Class X-P, Class X-C and Class X-W certificates will accrue interest at a rate as described under ‘‘DESCRIPTION OF THE CERTIFICATES—Pass-Through Rates’’ in this prospectus supplement. | |
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![]() | The certificates (other than the Class Z, Class R-I and Class R-II certificates) will accrue interest on the basis of a 360-day year consisting of twelve 30-day months. | |
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![]() | The interest accrual period with respect to any distribution date and any class of certificates (other than the Class Z, Class R-I and Class R-II certificates) is the calendar month preceding the month in which such distribution date occurs. | |
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![]() | As reflected in the chart under ‘‘—Priority of Distributions’’ beginning on page S-16 above, on each distribution date, the trustee will distribute interest to the holders of the offered certificates, the Class X-P, Class X-C and Class X-W certificates: | |
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![]() | • | first, pro rata, to the Class X-P, Class X-C, Class X-W, Class A-1, Class A-2, Class A-3, Class A-4, Class A-PB, Class A-5 and Class A-1A certificates as described above under ‘‘—Priority of Distributions’’, and then to each other class of offered certificates in order of priority of payment; and | |
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![]() | • | only to the extent funds remain after the trustee makes all distributions of interest and principal required to be made on such date to each class of certificates with a higher priority of distribution. | |
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![]() | You may, in certain circumstances, also receive distributions of prepayment premiums and yield maintenance charges | |
S-23
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![]() | collected on the mortgage loans included in the trust fund. These distributions are in addition to the distributions of principal and interest described above. See ‘‘DESCRIPTION OF THE CERTIFICATES—Distributions’’ in this prospectus supplement. | |
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Pass-Through Rates | ![]() | The pass-through rate for each class of certificates (other than the Class X-P, Class X-C, Class X-W, Class Z, Class R-I and Class R-II certificates) on each distribution date is set forth above under ‘‘OVERVIEW OF THE CERTIFICATES’’ in this prospectus supplement. |
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![]() | The pass-through rates applicable to the Class X-P certificates, the Class X-C certificates and the Class X-W certificates are described under ‘‘DESCRIPTION OF THE CERTIFICATES—Pass-Through Rates’’ in this prospectus supplement. | |
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![]() | The weighted average net mortgage rate for each distribution date is the weighted average of the net mortgage rates for the mortgage loans included in the trust fund as of the beginning of the related collection period, weighted on the basis of their respective stated principal balances immediately following the preceding distribution date; provided that, for the purpose of determining the weighted average net mortgage rate only, if the mortgage rate for any mortgage loan included in the trust fund has been modified in connection with a bankruptcy or similar proceeding involving the related borrower or a modification, waiver or amendment granted or agreed to by the special servicer, the weighted average net mortgage rate for that mortgage loan will be calculated without regard to that event. The net mortgage rate for each mortgage loan included in the trust fund will generally equal: | |
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![]() | • | the mortgage interest rate in effect for that mortgage loan as of the closing date; minus | |
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![]() | • | the applicable administrative cost rate, as described in this prospectus supplement. | |
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![]() | Any increase in the interest rate of a mortgage loan as a result of not repaying the outstanding principal amount of such mortgage loan by the related anticipated repayment date will be disregarded for purposes of calculating the net mortgage rate. | |
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![]() | For the purpose of calculating the weighted average net mortgage rate, the mortgage rate of each mortgage loan will be deemed adjusted as described under ‘‘DESCRIPTION OF THE CERTIFICATES—Pass-Through Rates’’ in this prospectus supplement. | |
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![]() | The stated principal balance of each mortgage loan included in the trust fund will generally equal the principal balance of that mortgage loan as of the cut-off date, reduced as of any date of determination (to not less than zero) by: | |
S-24
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![]() | • | the portion of the principal distribution amount for the related distribution date that is attributable to that mortgage loan; and | |
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![]() | • | the principal portion of any realized loss incurred in respect of that mortgage loan during the related collection period. | |
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![]() | The stated principal balance of any mortgage loan as to which the mortgage rate is reduced through a modification may be increased in certain circumstances by the amount of the resulting interest reduction. See ‘‘DESCRIPTION OF THE CERTIFICATES—Pass-Through Rates’’ in this prospectus supplement. | |
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Principal Distributions | ![]() | On the closing date, each class of certificates (other than the Class X-P, Class X-C, Class X-W, Class Z, Class R-I and Class R-II certificates) will have the certificate balance set forth above under ‘‘OVERVIEW OF THE CERTIFICATES’’ in this prospectus supplement. The certificate balance for each class of certificates entitled to receive principal may be reduced by: |
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![]() | • | distributions of principal; and | |
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![]() | • | allocations of realized losses and trust fund expenses. | |
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![]() | The certificate balance or notional amount of a class of certificates may be increased in certain circumstances by the allocation of any increase in the stated principal balance of any mortgage loan resulting from the reduction of the related mortgage rate through modification. See ‘‘DESCRIPTION OF THE CERTIFICATES—Certificate Balances and Notional Amounts’’ in this prospectus supplement. | |
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![]() | The Class X-P, Class X-C and Class X-W certificates do not have principal balances and will not receive distributions of principal. | |
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![]() | As reflected in the chart under ‘‘—Priority of Distributions’’ above: | |
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![]() | • | generally, the Class A-1, Class A-2, Class A-3, Class A-4, Class A-PB and Class A-5 certificates will only be entitled to receive distributions of principal collected or advanced in respect of mortgage loans in loan group 1 until the certificate principal balance of the Class A-1A certificates has been reduced to zero, and the Class A-1A certificates will only be entitled to receive distributions of principal collected or advanced in respect of mortgage loans in loan group 2 until the certificate principal balances of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-PB and Class A-5 certificates have been reduced to zero; provided, however, the Class A-1, Class A-2, Class A-3, Class A-4 and Class A-5 certificates will not be entitled to distributions of principal from | |
S-25
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![]() | either loan group 1 or loan group 2 until the certificate principal balance of the Class A-PB certificates is reduced to the planned principal balance set forth on Annex F to this prospectus supplement; | ||
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![]() | • | principal is distributed to each class of certificates entitled to receive distributions of principal in the order described under ‘‘DESCRIPTION OF THE CERTIFICATES— Distributions’’ in this prospectus supplement; | |
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![]() | • | principal is only distributed on a related class of certificates to the extent funds remain after the trustee makes all distributions of principal and interest on those classes of certificates with a higher priority of distribution as described under ‘‘DESCRIPTION OF THE CERTIFICATES—Distributions’’ in this prospectus supplement; | |
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![]() | • | generally, no class of certificates is entitled to distributions of principal until the certificate balance of each class of certificates with a higher priority of distribution as described under ‘‘DESCRIPTION OF THE CERTIFICATES—Distributions’’ in this prospectus supplement has been reduced to zero; and | |
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![]() | • | in no event will the holders of the Class A-M, Class A-J, Class B, Class C, Class D, Class E or Class F certificates or the classes of non-offered certificates be entitled to receive any payments of principal until the certificate balances of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-PB, Class A-5 and Class A-1A certificates have all been reduced to zero. | |
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![]() | The amount of principal to be distributed for each distribution date generally will be an amount equal to: | |
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![]() | • | the scheduled principal payments (other than balloon payments) due on the mortgage loans included in the trust fund during the related collection period whether or not those scheduled payments are actually received; | |
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![]() | • | balloon payments actually received with respect to mortgage loans included in the trust fund during the related collection period; | |
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![]() | • | prepayments received with respect to the mortgage loans included in the trust fund during the related collection period; and | |
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![]() | • | all liquidation proceeds, insurance proceeds, condemnation awards and repurchase and substitution amounts received during the related collection period that are allocable to principal. | |
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![]() | For purposes of making distributions to the Class A-1, Class A-2, Class A-3, Class A-4, Class A-PB, Class A-5 and Class A-1A certificates, the principal distribution amount for | |
S-26
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![]() | each loan group on any distribution date will be equal to the sum of the collections specified above but only to the extent such amounts relate to the mortgage loans comprising the specified loan group. | |
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![]() | However, if the master servicer or the trustee reimburses itself out of general collections on the mortgage pool for any advance that it or the special servicer has determined is not recoverable out of collections on the related mortgage loan and certain advances that are determined not to be reimbursed currently in connection with the work-out of a mortgage loan, then those advances (together with accrued interest thereon) will be deemed, to the fullest extent permitted pursuant to the terms of the pooling and servicing agreement, to be reimbursed first out of payments and other collections of principal otherwise distributable on the principal balance certificates, prior to, in the case of nonrecoverable advances only, being deemed reimbursed out of payments and other collections of interest otherwise distributable on the offered certificates. | |
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Subordination; Allocation of Losses and Certain Expenses | ![]() | Credit support for any class of certificates (other than the Class X-P, Class X-C, Class X-W, Class Z, Class R-I and Class R-II certificates) is provided by the subordination of payments and allocation of any losses to such classes of certificates which have a later priority of distribution. However, none of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-PB, Class A-5 or Class A-1A certificates will be subordinate to any other class of Class A-1, Class A-2, Class A-3, Class A-4, Class A-PB, Class A-5 or Class A-1A certificates. The certificate balance of a class of certificates (other than the Class X-P, Class X-C, Class X-W, Class Z, Class R-I and Class R-II certificates) will be reduced on each distribution date by any losses on the mortgage loans that have been realized and certain additional trust fund expenses actually allocated to that class of certificates on that distribution date. |
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![]() | Losses on the mortgage loans that have been realized and additional trust fund expenses will be allocated without regard to loan group and will first be allocated to the certificates (other than the Class X-P, Class X-C, Class X-W,Class Z, Class R-I and Class R-II certificates) that are not | |
S-27
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![]() | offered by this prospectus supplement and then to the offered certificates as indicated on the following table: | |
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Class Designation | ![]() | ![]() | Original Certificate Balance | ![]() | ![]() | Percentage of Cut-Off Date Pool Balance | ![]() | ![]() | Order of Application of Losses and Expenses | |||||||||
Class A-1 | ![]() | ![]() | ![]() | $ | 35,195,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.445 | % | ![]() | ![]() | ![]() | ![]() | 9 | ![]() |
Class A-2 | ![]() | ![]() | ![]() | $ | 100,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.265 | % | ![]() | ![]() | ![]() | ![]() | 9 | ![]() |
Class A-3 | ![]() | ![]() | ![]() | $ | 908,744,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 11.498 | % | ![]() | ![]() | ![]() | ![]() | 9 | ![]() |
Class A-4 | ![]() | ![]() | ![]() | $ | 195,542,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.474 | % | ![]() | ![]() | ![]() | ![]() | 9 | ![]() |
Class A-PB | ![]() | ![]() | ![]() | $ | 126,906,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.606 | % | ![]() | ![]() | ![]() | ![]() | 9 | ![]() |
Class A-5 | ![]() | ![]() | ![]() | $ | 1,876,383,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 23.741 | % | ![]() | ![]() | ![]() | ![]() | 9 | ![]() |
Class A-1A | ![]() | ![]() | ![]() | $ | 2,289,679,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 28.970 | % | ![]() | ![]() | ![]() | ![]() | 9 | ![]() |
Class A-M | ![]() | ![]() | ![]() | $ | 790,349,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 10.000 | % | ![]() | ![]() | ![]() | ![]() | 8 | ![]() |
Class A-J | ![]() | ![]() | ![]() | $ | 671,798,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 8.500 | % | ![]() | ![]() | ![]() | ![]() | 7 | ![]() |
Class B | ![]() | ![]() | ![]() | $ | 49,397,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.625 | % | ![]() | ![]() | ![]() | ![]() | 6 | ![]() |
Class C | ![]() | ![]() | ![]() | $ | 79,035,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.000 | % | ![]() | ![]() | ![]() | ![]() | 5 | ![]() |
Class D | ![]() | ![]() | ![]() | $ | 69,155,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.875 | % | ![]() | ![]() | ![]() | ![]() | 4 | ![]() |
Class E | ![]() | ![]() | ![]() | $ | 59,277,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.750 | % | ![]() | ![]() | ![]() | ![]() | 3 | ![]() |
Class F | ![]() | ![]() | ![]() | $ | 69,155,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.875 | % | ![]() | ![]() | ![]() | ![]() | 2 | ![]() |
Non-offered certificates (excluding the Class X-P, Class X-C, Class X-W, Class R-I, Class R-II and Class Z certificates) | ![]() | ![]() | ![]() | $ | 582,883,737 | ![]() | ![]() | ![]() | ![]() | ![]() | 7.375 | % | ![]() | ![]() | ![]() | ![]() | 1 | ![]() |
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![]() | Any losses realized on the mortgage loans included in the trust fund or additional trust fund expenses allocated in reduction of the certificate balance of any class of sequential pay certificates will result in a corresponding reduction in the notional amount of the Class X-C and Class X-W certificates and, with respect to the Class A-2, Class A-3, Class A-4, Class A-PB, Class A-5, Class A-M, Class A-J, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J and Class K certificates and portions of the Class A-1 and Class A-1A certificates, a corresponding reduction in the notional amount of the Class X-P certificates. | |
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![]() | Any losses and expenses that are associated with each co-lender loan will be allocated in accordance with the related intercreditor agreement. Specifically, with respect to the mortgage loans with one or more pari passu companion loans, any losses and expenses that are associated with the applicable whole loan will be allocated in accordance with the terms of the related intercreditor agreement, generally, pro rata between each related mortgage loan (and, therefore, to the certificates, other than the Class X-P, Class X-C, Class X-W, Class Z, Class R-I and Class R-II certificates) and the related pari passu companion loan(s). Further, with regard to the mortgage loans with subordinate companion loans, any losses and expenses that are associated with the applicable whole loan will be allocated, in accordance with the terms of the related intercreditor agreement, generally, first, to the subordinate companion loan, and second, to the related mortgage loan (and the related pari passu companion loan, if applicable). The portions of those losses and expenses that are allocated to the mortgage loans that are included in the trust fund will be allocated among the Series 2007-C30 certificates in the manner described above. | |
S-28
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![]() | See ‘‘DESCRIPTION OF THE CERTIFICATES— Subordination; Allocation of Losses and Certain Expenses’’ in this prospectus supplement. | |
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Fees and Expenses | ![]() | Certain fees and expenses are payable from amounts received on the mortgage loans in the trust fund and are generally distributed prior to any amounts being paid to the holders of the offered certificates. |
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![]() | The master servicer is entitled to the master servicing fee which is payable monthly on a loan-by-loan basis from amounts received in respect of interest on each mortgage loan and each specially serviced mortgage loan (and from revenue with respect to each REO mortgage loan). The master servicing fee accrues at the related master servicing fee rate and is computed on the basis of the same principal amount respecting which any related interest payment due on the mortgage loan is computed. The weighted average master servicing fee rate will be approximately 0.02105% per annum as of the cut-off date. | |
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![]() | The special servicer is entitled to the special servicing fee which is payable monthly on each mortgage loan that is a specially serviced mortgage loan and each REO mortgage loan from general collections on the mortgage loans. The special servicing fee accrues at a rate equal to 0.25% per annum and is computed on the basis of the same principal amount respecting which any related interest payment due on such specially serviced mortgage loan or REO mortgage loan, as the case may be, is paid. | |
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![]() | The special servicer is also entitled to a liquidation fee with respect to each specially serviced mortgage loan that is generally an amount equal to 1.00% of any whole or partial cash payments of liquidation proceeds received in respect thereof or, with respect to the Peter Cooper Village & Stuyvesant Town mortgage loan, the lesser of (i) 0.50% of any whole or partial cash payments of liquidation proceeds received in respect thereof and (ii) $15,000,000; provided, however, in no event will the liquidation fee be payable to the extent a workout fee is payable concerning the related cash payments. | |
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![]() | The special servicer also is entitled to a workout fee with respect to each mortgage loan that is no longer a specially serviced mortgage loan that is generally equal to 1.00% of all payments of interest and principal received on such mortgage loan for so long as it remains a corrected mortgage loan or, with respect to the Peter Cooper Village & Stuyvesant Town mortgage loan, the lesser of (i) 0.50% of all payments of interest and principal received on such mortgage loan for so long as it remains a corrected mortgage loan, and (ii) $15,000,000. | |
S-29
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![]() | The trustee is entitled to a trustee fee for each mortgage loan and each REO mortgage loan for any distribution date equal to one-twelfth of the product of the trustee fee rate calculated on the outstanding principal amount of the pool of mortgage loans in the trust fund. The trustee fee accrues at a per annum rate equal to 0.00028% on the stated principal balance of such mortgage loan or REO mortgage loan, as the case may be, outstanding immediately following the prior distribution date. | |
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![]() | The master servicer, special servicer and trustee are entitled to certain other additional fees and reimbursement of expenses. All fees and expenses will generally be payable prior to distribution on the certificates. | |
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![]() | Further information with respect to the fees and expenses payable from distributions to certificateholders, including information regarding the general purpose of and the source of payment for the fees and expenses, is set forth under ‘‘SERVICING OF THE MORTGAGE LOANS— Compensation and Payment of Expenses’’ in this prospectus supplement. The master servicer and the special servicer under the pooling and servicing agreement entered into in connection with the issuance of the LB-UBS Commercial Mortgage Trust 2007-C1, Commercial Mortgage Pass-Through Certificates, Series 2007-C1 are each generally entitled to payment of similar fees and expenses described in this section. | |
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Prepayment Premiums; Yield Maintenance Charges | ![]() | On each distribution date, any prepayment premium or yield maintenance charge actually collected during the related collection period on a mortgage loan included in the trust fund will be distributed to the holders of each class of offered certificates and the Class G, Class H, Class J and Class K certificates then entitled to distributions as follows: |
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![]() | The holders of each class of offered certificates and the Class G, Class H, Class J and Class K certificates then entitled to distributions of principal with respect to the related loan group on that distribution date will generally be entitled to a portion of prepayment premiums or yield maintenance charges equal to the product of: | |
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![]() | • | the amount of those prepayment premiums or yield maintenance charges; | |
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![]() | • | a fraction (in no event greater than one), the numerator of which is equal to the excess, if any, of the pass-through rate of that class of certificates over the relevant discount rate, and the denominator of which is equal to the excess, if any, of the mortgage interest rate of the prepaid mortgage loan over the relevant discount rate; and | |
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![]() | • | a fraction, the numerator of which is equal to the amount | |
S-30
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![]() | of principal distributable on that class of certificates on that distribution date, and the denominator of which is the principal distribution amount for that distribution date. | ||
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![]() | If there is more than one class of certificates entitled to distributions of principal with respect to the related loan group on any particular distribution date on which a prepayment premium or yield maintenance charge is distributable, the aggregate amount of that prepayment premium or yield maintenance charge will be allocated among all such classes up to, and on a pro rata basis in accordance with, the foregoing entitlements. | |
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![]() | The portion, if any, of the prepayment premiums or yield maintenance charges remaining after any payments described above will be distributed to the holders of the Class X-C, Class X-P and Class X-W certificates as described in ‘‘DESCRIPTION OF THE CERTIFICATES—Distributions —Allocation of Prepayment Premiums and Yield Maintenance Charges’’ in this prospectus supplement. | |
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![]() | The ‘‘discount rate’’ applicable to any class of offered certificates and the Class G, Class H, Class J and Class K certificates will be equal to the discount rate stated in the related mortgage loan documents used in calculating the yield maintenance charge with respect to such principal prepayment. To the extent that a discount rate is not stated therein, the discount rate will equal the yield (when compounded monthly) on the U.S. Treasury issue with a maturity date closest to the maturity date for the prepaid mortgage loan or mortgage loan for which title to the related mortgaged property was acquired by the trust fund. | |
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![]() | • | In the event that there are two or more such U.S. Treasury issues with the same coupon, the issue with the lowest yield will be utilized; and | |
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![]() | • | In the event that there are two or more such U.S. Treasury issues with maturity dates equally close to the maturity date for the prepaid mortgage loan, the issue with the earliest maturity date will be utilized. | |
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![]() | Examples of Allocation of Prepayment Premiums or Yield Maintenance Charges | |
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Mortgage interest rate | ![]() | ![]() | ![]() | ![]() | 8 | % |
Pass-through rate for applicable class | ![]() | ![]() | ![]() | ![]() | 6 | % |
Discount rate | ![]() | ![]() | ![]() | ![]() | 5 | % |
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Allocation Percentage for Applicable Class | ![]() | ![]() | Allocation Percentage for Class X-P | |||
6% − 5% | ![]() | ![]() | = 33 1/3% | ![]() | ![]() | (100% – 33 1/3%) x 7% = 4 2/3% |
8% − 5% | ||||||
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Allocation Percentage for Applicable Class | ![]() | ![]() | Allocation Percentage for Class X-C | |||
6% − 5% | ![]() | ![]() | = 33 1/3% | ![]() | ![]() | (100% – 33 1/3%) x 18% = 12% |
8% − 5% | ||||||
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Allocation Percentage for Applicable Class | ![]() | ![]() | Allocation Percentage for Class X-W | |||
6% − 5% | ![]() | ![]() | = 33 1/3% | ![]() | ![]() | (100% – 33 1/3%) x 75% = 50% |
8% − 5% | ||||||
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![]() | See ‘‘DESCRIPTION OF THE CERTIFICATES— Distributions—Allocation of Prepayment Premiums and Yield Maintenance Charges’’ in this prospectus supplement. | |
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Allocation of Additional Interest | ![]() | On each distribution date, any additional interest collected in respect of a mortgage loan in the trust fund with an anticipated repayment date during the related collection period will be distributed to the holders of the Class Z certificates. In each case, this interest will not be available to provide credit support for other classes of certificates or offset any interest shortfalls. |
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Advancing of Principal and Interest | ![]() | The master servicer is required to advance delinquent scheduled payments of principal and interest with respect to any mortgage loan included in the trust fund unless the master servicer or the special servicer determines that the advance would not be recoverable from proceeds of the related mortgage loan. The master servicer will not be required to advance balloon payments due at maturity in excess of regular periodic payments, interest in excess of the mortgage loan’s regular interest rate or prepayment premiums or yield maintenance charges. The amount of the interest portion of any advance will be subject to reduction to the extent that an appraisal reduction of the related mortgage loan has occurred. If the master servicer fails to make a required advance, the trustee will be required to make that advance, unless the trustee determines that the advance would not be recoverable from proceeds of the related mortgage loan. With respect to the State Street Financial Center mortgage loan, the master servicer under the LB-UBS 2007-C1 pooling and servicing agreement is not required to advance delinquent principal and/or interest payments with respect to the portion of the State Street Financial Center whole loan that is included in this trust fund, therefore, the master servicer will be required to make any such principal and/or interest advance unless the master servicer determines that such advance would not be recoverable. See ‘‘DESCRIPTION OF THE CERTIFICATES—P&I Advances’’ in this prospectus supplement. |
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![]() | These cash advances are only intended to maintain a regular flow of scheduled principal and interest payments on the certificates and are not intended to guarantee or insure | |
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![]() | against losses. In other words, the advances are intended to provide liquidity (rather than credit enhancement) to certificateholders. To the extent described in this prospectus supplement, the trust fund will pay interest to the master servicer or the trustee, as the case may be, on the amount of any principal and interest cash advance calculated at the prime rate (provided that no principal and/or interest cash advance shall accrue interest until after the expiration of any applicable grace or cure period for the related scheduled payment) and will reimburse the master servicer or the trustee for any principal and interest cash advances that are later determined to be not recoverable. Any principal and/or interest advance on any pari passu companion loan will not be recoverable by the master servicer from the trust fund. Neither the master servicer nor the trustee will be required to make a principal and/or interest advance with respect to any subordinate companion loan. Additionally, the trustee will not be required to make a principal and interest advance with respect to any companion loan. See ‘‘DESCRIPTION OF THE CERTIFICATES—P&I Advances’’ in this prospectus supplement. | |
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Required Repurchases or Substitutions of Mortgage Loans | ![]() | Under certain circumstances, a mortgage loan seller may be obligated to repurchase an affected mortgage loan from the trust fund as a result of a material document defect or a material breach of the representations and warranties given by such mortgage loan seller with respect to the mortgage loan in the related mortgage loan purchase agreement. In addition, the mortgage loan seller may be permitted, within 2 years of the closing date, to substitute another mortgage loan for the affected mortgage loan rather than repurchasing it. See ‘‘DESCRIPTION OF THE MORTGAGE POOL— Assignment of the Mortgage Loans; Repurchases and Substitutions’’ and ‘‘—Representations and Warranties; Repurchases and Substitutions’’ in this prospectus supplement. |
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Sale of Defaulted Loans | ![]() | In the event a mortgage loan (other than the State Street Financial Center mortgage loan) becomes a defaulted mortgage loan, the certificateholder that is entitled to greater than 50% of the voting rights allocated to the class of sequential pay certificates with the lowest payment priority then outstanding (or if no certificateholder is entitled to greater than 50% of the voting rights of such class, the certificateholder with the largest percentage of voting rights allocated to such class) and, in certain circumstances, the special servicer (in each case, subject to, in certain instances, the rights of the subordinated secured creditors or mezzanine lenders to purchase the related mortgage loan), shall have, except as described below, the option to purchase from the trust fund such defaulted mortgage loan with respect to |
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![]() | which certain defaults have occurred. With respect to the Peter Cooper Village & Stuyvesant Town mortgage loan, the certificateholder described above, subject to the same circumstances described above, shall have the option to purchase the defaulted mortgage loan from the trust fund so long as it also purchases each related pari passu companion loan. In the event such certificateholder does not exercise its purchase option within a certain specified period, the holders of the related pari passu companion loans will each have the option to purchase the Peter Cooper Village & Stuyvesant Town mortgage loan so long as that holder also purchases each related pari passu companion loan, each in accordance with the related intercreditor agreement. In the event no holder of a related pari passu companion loan exercises its purchase option, then the holder of the most subordinate class of sequential pay certificates shall then have the option to purchase just the portion of the Peter Cooper Village & Stuyvesant Town whole loan included in the trust fund. See ‘‘SERVICING OF THE MORTGAGE LOANS—Defaulted Mortgage Loans; REO Properties; Purchase Option’’ in this prospectus supplement. | |
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![]() | In addition, with respect to 16 mortgage loans (loan numbers 1, 2, 4, 5, 7, 14, 18, 29, 33, 43, 45, 80, 85, 159, 171 and 218) representing approximately 41.0% of the mortgage pool (13 mortgage loans in loan group 1 or 30.4% and 3 mortgage loans in loan group 2 or 67.1%) that are part of split loan structures that include one or more subordinate companion loans, the related intercreditor agreement entitles the holder(s) of the related subordinate companion loan to purchase the mortgage loan from the trust fund following a default under the related whole loan. SEE ‘‘DESCRIPTION OF THE MORTGAGE POOL—Co-Lender Loans’’. | |
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Reimbursement Entitlement of Servicer of the LB-UBS 2007-C1 Trust Fund | ![]() | The master servicer and, in certain circumstances, the special servicer under the LB-UBS Commercial Mortgage Trust 2007-C1, Commercial Mortgage Pass-Through Certificates, Series 2007-C1 trust fund are each entitled to reimbursement of its pro rata share of servicing advances made with respect to the State Street Financial Center mortgage loan. In the event principal and interest payments related to the State Street Financial Center mortgage loan are insufficient to reimburse such master servicer or special servicer, reimbursement may be obtained from the other mortgage loans in the trust fund. |
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Optional Termination of the Trust Fund | ![]() | The trust fund may be terminated when the aggregate principal balance of the mortgage loans included in the trust fund is less than 1.0% of the aggregate principal balance of the pool of mortgage loans included in the trust fund as of the cut-off date. See ‘‘DESCRIPTION OF THE |
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![]() | CERTIFICATES—Termination’’ in this prospectus supplement and in the accompanying prospectus. | |
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![]() | The trust fund may also be terminated when the Class A-1, Class A-2, Class A-3, Class A-4, Class A-PB, Class A-5, Class A-1A, Class A-M, Class A-J, Class B, Class C, Class D, Class E and Class F certificates have been paid in full and all of the remaining certificates (other than the Class Z, Class R-I and Class R-II certificates) are held by a single certificateholder. See ‘‘DESCRIPTION OF THE CERTIFICATES— Termination’’ in this prospectus supplement. | |
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Registration and Denomination | ![]() | The offered certificates will initially be registered in the name of Cede & Co., as nominee for The Depository Trust Company in the United States, or in Europe through Clearstream Banking société anonyme or Euroclear Bank S.A./N.V., as operator of the Euroclear System. You will not receive a definitive certificate representing your interest in the trust fund, except in the limited circumstances described in the accompanying prospectus. See ‘‘DESCRIPTION OF THE CERTIFICATES—Book-Entry Registration and Definitive Certificates’’ in the accompanying prospectus. |
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![]() | Beneficial interests in the Class A-1, Class A-2, Class A-3, Class A-4, Class A-PB, Class A-5, Class A-1A, Class A-M, Class A-J, Class B, Class C, Class D, Class E and Class F certificates will be offered in minimum denominations of $10,000 actual principal amounts and in integral multiples of $1 in excess of those amounts. | |
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Material Federal Income Tax Consequences | ![]() | Two separate real estate mortgage investment conduit elections will be made with respect to the trust fund (‘‘REMIC I’’ and ‘‘REMIC II’’, each, a ‘‘REMIC’’). The offered certificates will evidence regular interests in a REMIC and generally will be treated as debt instruments of that REMIC. The Class R-I certificates will represent the residual interests in REMIC I and the Class R-II certificates will represent the residual interests in REMIC II. |
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![]() | In addition, the Class Z certificateholders’ entitlement to any additional interest that has accrued on a related mortgage loan that provides for the accrual of that additional interest if the unamortized principal amount of that mortgage loan is not repaid on the anticipated repayment date set forth in the related mortgage note will be treated as a grantor trust (as described in the related prospectus) for federal income tax purposes. | |
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![]() | The offered certificates will be treated as newly originated debt instruments for federal income tax purposes. You will be required to report income with respect to the offered certificates using the accrual method of accounting, even if you otherwise use the cash method of accounting. It is | |
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![]() | anticipated that the offered certificates will be treated as having been issued at a premium for federal income tax reporting purposes. | |
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![]() | For further information regarding the federal income tax consequences of investing in the offered certificates, see ‘‘MATERIAL FEDERAL INCOME TAX CONSEQUENCES’’ in this prospectus supplement and in the accompanying prospectus. | |
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ERISA Considerations | ![]() | Subject to important considerations described under ‘‘ERISA CONSIDERATIONS’’ in this prospectus supplement and the accompanying prospectus, the following classes of offered certificates may be eligible for purchase by persons investing assets of employee benefit plans, individual retirement accounts, or other retirement plans and accounts: |
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![]() | Class A-1 Class A-2 Class A-3 Class A-4 Class A-PB Class A-5 Class A-1A Class A-M Class A-J Class B Class C Class D Class E Class F | ||
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![]() | This is based on individual prohibited transaction exemptions granted to each of Wachovia Capital Markets, LLC, Credit Suisse Securities (USA) LLC, Merrill Lynch & Co. and Goldman, Sachs & Co. by the U.S. Department of Labor. See ‘‘ERISA CONSIDERATIONS’’ in this prospectus supplement and in the accompanying prospectus. | |
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Legal Investment | ![]() | The offered certificates will not constitute ‘‘mortgage related securities’’ for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended (‘‘SMMEA’’). If your investment activities are subject to legal investment laws and regulations, regulatory capital requirements, or review by regulatory authorities, then you may be subject to restrictions on investment in the offered certificates. You should consult your own legal advisers for assistance in determining the suitability of and consequences to you of the purchase, ownership and sale of the offered certificates. See ‘‘LEGAL INVESTMENT’’ in this prospectus supplement and in the accompanying prospectus. |
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Ratings | ![]() | The offered certificates will not be issued unless they have received the following ratings from Standard & Poor’s Ratings Services, Inc., a division of The McGraw-Hill Companies, Inc., Moody’s Investors Service, Inc. and Fitch, Inc. |
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Class | ![]() | ![]() | Expected Rating from Fitch/Moody’s/S&P |
Class A-1 | ![]() | ![]() | AAA/Aaa/AAA |
Class A-2 | ![]() | ![]() | AAA/Aaa/AAA |
Class A-3 | ![]() | ![]() | AAA/Aaa/AAA |
Class A-4 | ![]() | ![]() | AAA/Aaa/AAA |
Class A-PB | ![]() | ![]() | AAA/Aaa/AAA |
Class A-5 | ![]() | ![]() | AAA/Aaa/AAA |
Class A-1A | ![]() | ![]() | AAA/Aaa/AAA |
Class A-M | ![]() | ![]() | AAA/Aaa/AAA |
Class A-J | ![]() | ![]() | AAA/Aaa/AAA |
Class B | ![]() | ![]() | AA+/Aa1/AA+ |
Class C | ![]() | ![]() | AA/Aa2/AA |
Class D | ![]() | ![]() | AA−/Aa3/AA− |
Class E | ![]() | ![]() | A+/A1/A+ |
Class F | ![]() | ![]() | A/A2/A |
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![]() | The ratings on the offered certificates address the likelihood of timely receipt of interest and ultimate receipt of principal by the rated final distribution date by the holders of offered certificates. They do not address the likely actual rate of prepayments. The rate of prepayments, if different than originally anticipated, could adversely affect the yield realized by holders of the offered certificates. See ‘‘RATINGS’’ in this prospectus supplement and in the accompanying prospectus for a discussion of the basis upon which ratings are given, the limitations and restrictions on the ratings, and conclusions that should not be drawn from a rating. | |
THE MORTGAGE LOANS
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General | ![]() | It is expected that the mortgage loans to be included in the trust fund will have the following approximate characteristics as of the cut-off date. The information contained in this prospectus supplement assumes the timely delivery of all scheduled payments of interest and principal and no prepayments on or before the cut-off date. All information presented in this prospectus supplement (including cut-off date balance per square foot/unit/room/pad/bed, loan-to-value ratios and debt service coverage ratios) with respect to the 13 mortgage loans with subordinate companion loans is calculated without regard to the related subordinate companion loans. Unless otherwise specified, in the case of the mortgage loans with one or more pari passu companion loans, the calculations of loan balance per square foot/room/unit, loan-to-value ratios and debt service coverage ratios were based on the aggregate indebtedness of these mortgage loans and the related pari passu companion loans, if any (but |
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![]() | not any subordinate companion loan or future pari passu companion loan). All percentages of the mortgage loans, or any specified group of mortgage loans, referred to in this prospectus supplement are approximate percentages. | |
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![]() | The totals in the following tables may not add up to 100% due to rounding. | |
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![]() | ![]() | All Mortgage Loans(1) | ![]() | ![]() | Loan Group 1 | ![]() | ![]() | Loan Group 2(1) | ||||||||||
Number of Mortgage Loans | ![]() | ![]() | ![]() | ![]() | 263 | ![]() | ![]() | ![]() | ![]() | ![]() | 212 | ![]() | ![]() | ![]() | ![]() | ![]() | 51 | ![]() |
Number of Crossed Loan Pools | ![]() | ![]() | ![]() | ![]() | 7 | ![]() | ![]() | ![]() | ![]() | ![]() | 7 | ![]() | ![]() | ![]() | ![]() | ![]() | 0 | ![]() |
Number of Mortgaged Properties | ![]() | ![]() | ![]() | ![]() | 328 | ![]() | ![]() | ![]() | ![]() | ![]() | 274 | ![]() | ![]() | ![]() | ![]() | ![]() | 54 | ![]() |
Aggregate Balance of all Mortgage Loans | ![]() | ![]() | ![]() | $ | 7,903,498,737 | ![]() | ![]() | ![]() | ![]() | $ | 5,613,819,111 | ![]() | ![]() | ![]() | ![]() | $ | 2,289,679,626 | ![]() |
Number of Mortgage Loans with Balloon Payments(2) | ![]() | ![]() | ![]() | ![]() | 140 | ![]() | ![]() | ![]() | ![]() | ![]() | 124 | ![]() | ![]() | ![]() | ![]() | ![]() | 16 | ![]() |
Aggregate Balance of Mortgage Loans with Balloon Payments(2) | ![]() | ![]() | ![]() | $ | 2,073,861,414 | ![]() | ![]() | ![]() | ![]() | $ | 1,897,157,288 | ![]() | ![]() | ![]() | ![]() | $ | 176,704,126 | ![]() |
Number of Mortgage Loans with Anticipated Repayment Date(3) | ![]() | ![]() | ![]() | ![]() | 5 | ![]() | ![]() | ![]() | ![]() | ![]() | 5 | ![]() | ![]() | ![]() | ![]() | ![]() | 0 | ![]() |
Aggregate Balance of Mortgage Loans with Anticipated Repayment Date(3) | ![]() | ![]() | ![]() | $ | 31,563,383 | ![]() | ![]() | ![]() | ![]() | $ | 31,563,383 | ![]() | ![]() | ![]() | ![]() | $ | 0 | ![]() |
Number of Fully Amortizing Mortgage Loans | ![]() | ![]() | ![]() | ![]() | 2 | ![]() | ![]() | ![]() | ![]() | ![]() | 2 | ![]() | ![]() | ![]() | ![]() | ![]() | 0 | ![]() |
Aggregate Balance of Fully Amortizing Mortgage Loans | ![]() | ![]() | ![]() | $ | 6,712,440 | ![]() | ![]() | ![]() | ![]() | $ | 6,712,440 | ![]() | ![]() | ![]() | ![]() | $ | 0 | ![]() |
Number of Interest-Only Mortgage Loans(4) | ![]() | ![]() | ![]() | ![]() | 116 | ![]() | ![]() | ![]() | ![]() | ![]() | 81 | ![]() | ![]() | ![]() | ![]() | ![]() | 35 | ![]() |
Aggregate Balance of Interest-Only Mortgage Loans(4) | ![]() | ![]() | ![]() | $ | 5,791,361,500 | ![]() | ![]() | ![]() | ![]() | $ | 3,678,386,000 | ![]() | ![]() | ![]() | ![]() | $ | 2,112,975,500 | ![]() |
Average Balance of Mortgage Loans | ![]() | ![]() | ![]() | $ | 30,051,326 | ![]() | ![]() | ![]() | ![]() | $ | 26,480,279 | ![]() | ![]() | ![]() | ![]() | $ | 44,895,679 | ![]() |
Minimum Balance of Mortgage Loans | ![]() | ![]() | ![]() | $ | 860,000 | ![]() | ![]() | ![]() | ![]() | $ | 860,000 | ![]() | ![]() | ![]() | ![]() | $ | 1,300,000 | ![]() |
Maximum Balance of Mortgage Loans | ![]() | ![]() | ![]() | $ | 1,500,000,000 | ![]() | ![]() | ![]() | ![]() | $ | 536,000,000 | ![]() | ![]() | ![]() | ![]() | $ | 1,500,000,000 | ![]() |
Maximum Balance for a group of cross-collateralized and cross-defaulted Mortgage Loans | ![]() | ![]() | ![]() | $ | 36,570,000 | (5) | ![]() | ![]() | ![]() | $ | 36,570,000 | (5) | ![]() | ![]() | ![]() | $ | 0 | ![]() |
Weighted Average LTV ratio(6)(7) | ![]() | ![]() | ![]() | ![]() | 70.4 | % | ![]() | ![]() | ![]() | ![]() | 74.1 | % | ![]() | ![]() | ![]() | ![]() | 61.2 | % |
Minimum LTV ratio(6) | ![]() | ![]() | ![]() | ![]() | 36.4 | % | ![]() | ![]() | ![]() | ![]() | 36.4 | % | ![]() | ![]() | ![]() | ![]() | 41.7 | % |
Maximum LTV ratio(6) | ![]() | ![]() | ![]() | ![]() | 87.2 | % | ![]() | ![]() | ![]() | ![]() | 87.2 | % | ![]() | ![]() | ![]() | ![]() | 80.0 | % |
Weighted Average LTV at Maturity or Anticipated Repayment Date(6)(7) | ![]() | ![]() | ![]() | ![]() | 68.6 | % | ![]() | ![]() | ![]() | ![]() | 71.8 | % | ![]() | ![]() | ![]() | ![]() | 60.6 | % |
Weighted Average DSCR(7)(8) | ![]() | ![]() | ![]() | ![]() | 1.40 | x | ![]() | ![]() | ![]() | ![]() | 1.32 | x | ![]() | ![]() | ![]() | ![]() | 1.60 | x |
Minimum DSCR | ![]() | ![]() | ![]() | ![]() | 1.06 | x | ![]() | ![]() | ![]() | ![]() | 1.06 | x | ![]() | ![]() | ![]() | ![]() | 1.16 | x |
Maximum DSCR | ![]() | ![]() | ![]() | ![]() | 3.47 | x | ![]() | ![]() | ![]() | ![]() | 3.47 | x | ![]() | ![]() | ![]() | ![]() | 2.36 | x |
Weighted Average Mortgage Loan interest rate | ![]() | ![]() | ![]() | ![]() | 5.854 | % | ![]() | ![]() | ![]() | ![]() | 5.720 | % | ![]() | ![]() | ![]() | ![]() | 6.183 | % |
Minimum Mortgage Loan interest rate | ![]() | ![]() | ![]() | ![]() | 5.180 | % | ![]() | ![]() | ![]() | ![]() | 5.280 | % | ![]() | ![]() | ![]() | ![]() | 5.180 | % |
Maximum Mortgage Loan interest rate | ![]() | ![]() | ![]() | ![]() | 6.830 | % | ![]() | ![]() | ![]() | ![]() | 6.830 | % | ![]() | ![]() | ![]() | ![]() | 6.434 | % |
Weighted Average Remaining Term to Maturity or Anticipated Repayment Date (months) | ![]() | ![]() | ![]() | ![]() | 108 | ![]() | ![]() | ![]() | ![]() | ![]() | 107 | ![]() | ![]() | ![]() | ![]() | ![]() | 113 | ![]() |
Minimum Remaining Term to Maturity or Anticipated Repayment Date (months) | ![]() | ![]() | ![]() | ![]() | 56 | ![]() | ![]() | ![]() | ![]() | ![]() | 56 | ![]() | ![]() | ![]() | ![]() | ![]() | 58 | ![]() |
Maximum Remaining Term to Maturity or Anticipated Repayment Date (months) | ![]() | ![]() | ![]() | ![]() | 132 | ![]() | ![]() | ![]() | ![]() | ![]() | 132 | ![]() | ![]() | ![]() | ![]() | ![]() | 120 | ![]() |
Weighted Average Occupancy Rate(9) | ![]() | ![]() | ![]() | ![]() | 94.5 | % | ![]() | ![]() | ![]() | ![]() | 93.8 | % | ![]() | ![]() | ![]() | ![]() | 96.2 | % |
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![]() | (1) | With respect to 1 mortgage loan (loan number 1), the related borrower is permitted to obtain up to $300,000,000 of any combination of pari passu mortgage debt secured by a second mortgage on the related mortgaged property and/or subordinate mezzanine debt at any time between November 2011 and May 2013, subject to certain conditions. For purposes of these numbers it has been assumed that such future debt is not advanced. For a description of the debt service coverage ratios and loan-to-value ratios, see ‘‘Peter Cooper Village & Stuyvesant Town’’ in Annex D to this prospectus supplement. | |
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![]() | (2) | Does not include mortgage loans with anticipated repayment dates or mortgage loans that are interest-only for their entire term. | |
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![]() | (3) | Does not include mortgage loans that are interest-only for their entire term. | |
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![]() | (4) | Includes mortgage loans with anticipated repayment dates that are interest-only for the entire period until the anticipated repayment date. | |
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![]() | (5) | Consists of a group of 3 individual mortgage loans (loan numbers 63, 163 and 166). | |
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![]() | (6) | For a description of how the loan-to-value ratios for the mortgage loans are determined, see ‘‘DESCRIPTION OF THE MORTGAGE POOL—Additional Mortgage Loan Information’’ in this prospectus supplement. | |
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![]() | (7) | Certain of the mortgage loans reflect LTV ratios that have been calculated on an ‘‘as-stabilized’’ basis, or that have LTV ratios or DSCRs that have been adjusted to take into account certain cash reserves or letters of credit. See ‘‘DESCRIPTION OF THE MORTGAGE POOL—Additional Mortgage Loan Information’’ and ‘‘RISK FACTORS—Risks Relating to Net Cash Flow’’ and ‘‘—Inspections and Appraisals May Not Accurately Reflect Value or Condition of Mortgaged Property’’ in this prospectus supplement. | |
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![]() | (8) | With respect to 1 mortgage loan (loan number 1) representing approximately 19.0% of the mortgage pool (65.5% of loan group 2), the underwritten net cash flow used to calculate the debt service coverage ratio was determined using future cash flow projections that include various assumptions including an assumed annual rate of conversion of units from rent-stabilized units to deregulated units. For a description of how the debt service coverage ratios for the mortgage loans are determined, see ‘‘DESCRIPTION OF THE MORTGAGE POOL—Additional Mortgage Loan Information’’ and ‘‘RISK FACTORS—Risks Relating to Net Cash Flow’’ in this prospectus supplement and the description of the Peter Cooper Village and Stuyvesant Town mortgage loan in Annex D to this prospectus supplement. | |
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![]() | (9) | Does not include 18 hospitality properties, representing, by allocated loan amount, 5.2% of the mortgage pool (7.3% of the loan group 1). In certain cases, occupancy includes space for which leases have been executed, but the tenant has not taken occupancy and/or commenced paying rent. | |
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Security for the Mortgage Loans in the Trust Fund | ![]() | Generally, all of the mortgage loans included in the trust fund are non-recourse obligations of the related borrowers. |
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![]() | • | No mortgage loan included in the trust fund is insured or guaranteed by any government agency or private insurer. | |
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![]() | • | All of the mortgage loans included in the trust fund are secured by first lien fee mortgages and/or leasehold mortgages on commercial properties or multifamily properties. | |
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Property Types | ![]() | The following table describes the mortgaged properties securing the mortgage loans expected to be included in the trust fund as of the cut-off date: |
Mortgaged Properties by Property Type(1)
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Property Type | ![]() | ![]() | Number of Mortgaged Properties | ![]() | ![]() | Aggregate Cut-Off Date Balance | ![]() | ![]() | Percentage of Cut-Off Date Pool Balance | ![]() | ![]() | Percentage of Cut-Off Date Group 1 Balance | ![]() | ![]() | Percentage of Cut-Off Date Group 2 Balance | |||||||||||||||
Office | ![]() | ![]() | ![]() | ![]() | 82 | ![]() | ![]() | ![]() | ![]() | $ | 3,397,538,675 | ![]() | ![]() | ![]() | ![]() | ![]() | 43.0 | % | ![]() | ![]() | ![]() | ![]() | 60.5 | % | ![]() | ![]() | ![]() | ![]() | 0.0 | % |
Multifamily | ![]() | ![]() | ![]() | ![]() | 54 | ![]() | ![]() | ![]() | ![]() | ![]() | 2,289,679,626 | ![]() | ![]() | ![]() | ![]() | ![]() | 29.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 100.0 | ![]() |
Retail | ![]() | ![]() | ![]() | ![]() | 90 | ![]() | ![]() | ![]() | ![]() | ![]() | 895,588,411 | ![]() | ![]() | ![]() | ![]() | ![]() | 11.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 16.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Retail – Anchored | ![]() | ![]() | ![]() | ![]() | 36 | ![]() | ![]() | ![]() | ![]() | ![]() | 642,666,495 | ![]() | ![]() | ![]() | ![]() | ![]() | 8.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 11.4 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Retail – Single Tenant | ![]() | ![]() | ![]() | ![]() | 30 | ![]() | ![]() | ![]() | ![]() | ![]() | 148,371,830 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.9 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.6 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Retail – Unanchored | ![]() | ![]() | ![]() | ![]() | 13 | ![]() | ![]() | ![]() | ![]() | ![]() | 56,385,217 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Retail – Shadow Anchored(2) | ![]() | ![]() | ![]() | ![]() | 11 | ![]() | ![]() | ![]() | ![]() | ![]() | 48,164,869 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.6 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.9 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Hospitality | ![]() | ![]() | ![]() | ![]() | 18 | ![]() | ![]() | ![]() | ![]() | ![]() | 409,119,656 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.2 | ![]() | ![]() | ![]() | ![]() | ![]() | 7.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Mixed Use | ![]() | ![]() | ![]() | ![]() | 8 | ![]() | ![]() | ![]() | ![]() | ![]() | 340,696,297 | ![]() | ![]() | ![]() | ![]() | ![]() | 4.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 6.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Industrial | ![]() | ![]() | ![]() | ![]() | 50 | ![]() | ![]() | ![]() | ![]() | ![]() | 294,885,179 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Self Storage | ![]() | ![]() | ![]() | ![]() | 22 | ![]() | ![]() | ![]() | ![]() | ![]() | 139,150,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Land(3) | ![]() | ![]() | ![]() | ![]() | 2 | ![]() | ![]() | ![]() | ![]() | ![]() | 101,396,894 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Healthcare | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 32,500,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.4 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.6 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Mobile Home Park | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 2,944,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Total | ![]() | ![]() | ![]() | ![]() | 328 | ![]() | ![]() | ![]() | ![]() | $ | 7,903,498,737 | ![]() | ![]() | ![]() | ![]() | ![]() | 100.0 | % | ![]() | ![]() | ![]() | ![]() | 100.0 | % | ![]() | ![]() | ![]() | ![]() | 100.0 | % |
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(1) | Because this table presents information relating to the mortgaged properties and not the mortgage loans, the information for mortgage loans secured by more than one mortgaged property is based on allocated loan amounts (allocating the mortgage loan principal balance to each of those properties by the appraised values of the mortgaged properties or the allocated loan amount (or specific release prices) as described in the related mortgage loan documents). |
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(2) | A mortgaged property is classified as shadow anchored if it is located in close proximity to an anchored retail property that is not part of the mortgaged property. |
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(3) | As of origination of the related mortgaged loan, one mortgaged property was improved with an office building and the other was improved with a retail bank branch, however they are not, in either case, part of the collateral for the related mortgaged property. |
Mortgaged Properties by Property Type
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Geographic Concentrations | ![]() | The mortgaged properties are located throughout 43 states and the District of Columbia. The following tables describe the number and percentage of mortgaged properties in states which have concentrations of mortgaged properties above 5.0%: |
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![]() | Mortgaged Properties by Geographic Concentration(1) | |
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State | ![]() | ![]() | Number of Mortgaged Properties | ![]() | ![]() | Aggregate Cut-Off Date Balance | ![]() | ![]() | Percentage of Cut-Off Date Pool Balance | |||||||||
NY | ![]() | ![]() | ![]() | ![]() | 19 | ![]() | ![]() | ![]() | ![]() | $ | 3,215,543,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 40.7 | % |
CA | ![]() | ![]() | ![]() | ![]() | 38 | ![]() | ![]() | ![]() | ![]() | ![]() | 821,461,405 | ![]() | ![]() | ![]() | ![]() | ![]() | 10.4 | ![]() |
CA – Southern(2) | ![]() | ![]() | ![]() | ![]() | 31 | ![]() | ![]() | ![]() | ![]() | ![]() | 743,251,405 | ![]() | ![]() | ![]() | ![]() | ![]() | 9.4 | ![]() |
CA – Northern(2) | ![]() | ![]() | ![]() | ![]() | 7 | ![]() | ![]() | ![]() | ![]() | ![]() | 78,210,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.0 | ![]() |
MA | ![]() | ![]() | ![]() | ![]() | 10 | ![]() | ![]() | ![]() | ![]() | ![]() | 655,704,758 | ![]() | ![]() | ![]() | ![]() | ![]() | 8.3 | ![]() |
TX | ![]() | ![]() | ![]() | ![]() | 40 | ![]() | ![]() | ![]() | ![]() | ![]() | 521,860,500 | ![]() | ![]() | ![]() | ![]() | ![]() | 6.6 | ![]() |
Other | ![]() | ![]() | ![]() | ![]() | 221 | ![]() | ![]() | ![]() | ![]() | ![]() | 2,688,929,074 | ![]() | ![]() | ![]() | ![]() | ![]() | 34.0 | ![]() |
Total | ![]() | ![]() | ![]() | ![]() | 328 | ![]() | ![]() | ![]() | ![]() | $ | 7,903,498,737 | ![]() | ![]() | ![]() | ![]() | ![]() | 100.0 | % |
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![]() | (1) | Because this table presents information relating to the mortgaged properties and not the mortgage loans, the information for mortgage loans secured by more than one mortgaged property is based on allocated loan amounts (allocating the mortgage loan principal balance to each of those properties by the appraised values of the mortgaged properties or the allocated loan amount (or specific release prices) as described in the related mortgage loan documents). | |
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![]() | (2) | For purposes of determining whether a mortgaged property is located in Northern California or Southern California, mortgaged properties located north of San Luis Obispo County, Kern County and San Bernardino County were included in Northern California and mortgaged properties located in and south of such counties were included in Southern California. | |
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![]() | Loan Group 1 Mortgaged Properties by Geographic Concentration(1) | |
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State | ![]() | ![]() | Number of Mortgaged Properties | ![]() | ![]() | Aggregate Cut-Off Date Balance | ![]() | ![]() | Percentage of Cut-Off Date Group 1 Balance | |||||||||
NY | ![]() | ![]() | ![]() | ![]() | 16 | ![]() | ![]() | ![]() | ![]() | $ | 1,704,343,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 30.4 | % |
CA | ![]() | ![]() | ![]() | ![]() | 30 | ![]() | ![]() | ![]() | ![]() | ![]() | 639,761,405 | ![]() | ![]() | ![]() | ![]() | ![]() | 11.4 | ![]() |
CA – Southern(2) | ![]() | ![]() | ![]() | ![]() | 24 | ![]() | ![]() | ![]() | ![]() | ![]() | 565,551,405 | ![]() | ![]() | ![]() | ![]() | ![]() | 10.1 | ![]() |
CA – Northern(2) | ![]() | ![]() | ![]() | ![]() | 6 | ![]() | ![]() | ![]() | ![]() | ![]() | 74,210,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.3 | ![]() |
MA | ![]() | ![]() | ![]() | ![]() | 7 | ![]() | ![]() | ![]() | ![]() | ![]() | 637,710,218 | ![]() | ![]() | ![]() | ![]() | ![]() | 11.4 | ![]() |
TX | ![]() | ![]() | ![]() | ![]() | 31 | ![]() | ![]() | ![]() | ![]() | ![]() | 397,496,288 | ![]() | ![]() | ![]() | ![]() | ![]() | 7.1 | ![]() |
IL | ![]() | ![]() | ![]() | ![]() | 2 | ![]() | ![]() | ![]() | ![]() | ![]() | 283,650,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.1 | ![]() |
Other | ![]() | ![]() | ![]() | ![]() | 188 | ![]() | ![]() | ![]() | ![]() | ![]() | 1,950,858,201 | ![]() | ![]() | ![]() | ![]() | ![]() | 34.8 | ![]() |
Total | ![]() | ![]() | ![]() | ![]() | 274 | ![]() | ![]() | ![]() | ![]() | $ | 5,613,819,111 | ![]() | ![]() | ![]() | ![]() | ![]() | 100.0 | % |
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![]() | (1) | Because this table presents information relating to the mortgaged properties and not the mortgage loans, the information for mortgage loans secured by more than one mortgaged property is based on allocated loan amounts (allocating the mortgage loan principal balance to each of those properties by the appraised values of the mortgaged properties or the allocated loan amount (or specific release prices) as described in the related mortgage loan documents). | |
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![]() | (2) | For purposes of determining whether a mortgaged property is located in Northern California or Southern California, mortgaged properties located north of San Luis Obispo County, Kern County and San Bernardino County were included in Northern California and | |
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![]() | mortgaged properties located in and south of such counties were included in Southern California. | ||
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![]() | Loan Group 2 Mortgaged Properties by Geographic Concentration(1) | |
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State | ![]() | ![]() | Number of Mortgaged Properties | ![]() | ![]() | Aggregate Cut-Off Date Balance | ![]() | ![]() | Percentage of Cut-Off Date Group 2 Balance | |||||||||
NY | ![]() | ![]() | ![]() | ![]() | 3 | ![]() | ![]() | ![]() | ![]() | $ | 1,511,200,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 66.0 | % |
CA | ![]() | ![]() | ![]() | ![]() | 8 | ![]() | ![]() | ![]() | ![]() | ![]() | 181,700,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 7.9 | ![]() |
CA – Southern(2) | ![]() | ![]() | ![]() | ![]() | 7 | ![]() | ![]() | ![]() | ![]() | ![]() | 177,700,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 7.8 | ![]() |
CA – Northern(2) | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 4,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.2 | ![]() |
TX | ![]() | ![]() | ![]() | ![]() | 9 | ![]() | ![]() | ![]() | ![]() | ![]() | 124,364,213 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.4 | ![]() |
Other | ![]() | ![]() | ![]() | ![]() | 34 | ![]() | ![]() | ![]() | ![]() | ![]() | 472,415,413 | ![]() | ![]() | ![]() | ![]() | ![]() | 20.6 | ![]() |
Total | ![]() | ![]() | ![]() | ![]() | 54 | ![]() | ![]() | ![]() | ![]() | $ | 2,289,679,626 | ![]() | ![]() | ![]() | ![]() | ![]() | 100.0 | % |
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![]() | ![]() | ![]() | ![]() |
![]() | (1) | Because this table presents information relating to the mortgaged properties and not the mortgage loans, the information for mortgage loans secured by more than one mortgaged property is based on allocated loan amounts (allocating the mortgage loan principal balance to each of those properties by the appraised values of the mortgaged properties or the allocated loan amount (or specific release prices) as described in the related mortgage loan documents). | |
![]() | ![]() | ![]() | ![]() |
![]() | (2) | For purposes of determining whether a mortgaged property is located in Northern California or Southern California, mortgaged properties located north of San Luis Obispo County, Kern County and San Bernardino County were included in Northern California and mortgaged properties located in and south of such counties were included in Southern California. | |
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Payment Terms | ![]() | All of the mortgage loans included in the trust fund accrue interest at a fixed rate, other than mortgage loans providing for an anticipated repayment date, which provide for an increase of fixed interest after a certain date. |
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![]() | • | Payments on the mortgage loans included in the trust fund are due on the 11th day of the month, except payments on 1 mortgage loan, representing 19.0% of the mortgage pool (65.5% of loan group 2), which are due on the 8th day of the month and payments on 1 mortgage loan representing 0.2% of the mortgage pool (0.3% of loan group 1), which are due on the 1st day of the month. No mortgage loan has a grace period that extends payment beyond the 11th day of any calendar month other than 1 mortgage loan representing 0.1% of the mortgage pool (0.1% of loan group 1), which has a once-per-year grace period that may extend payment until the 14th day of any calendar month and 2 mortgage loans representing 1.0% of the mortgage pool (1.4% of loan group 1) which have a twice-per-year grace period that may extend payment until the 16th day of any calendar month. | |
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![]() | • | As of the cut-off date, 262 of the mortgage loans, representing 99.8% of the mortgage pool (211 mortgage loans in loan group 1 or 99.7% and all of the mortgage | |
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![]() | loans in loan group 2), accrue interest on an actual/360 basis, and 1 mortgage loan, representing 0.2% of the mortgage pool (0.3% of loan group 1) accrue interest on a 30/360 basis. Ninety-seven (97) of the mortgage loans, representing 22.3% of the mortgage pool (87 mortgage loans in loan group 1 or 28.9% and 10 mortgage loans in loan group 2 or 6.2%), have periods during which only interest is due and periods in which principal and interest are due. One hundred sixteen (116) of the mortgage loans, representing 73.3% of the mortgage pool (81 mortgage loans in loan group 1 or 65.5% and 35 mortgage loans in loan group 2 or 92.3%), provide that only interest is due until maturity or the anticipated repayment date. Fifty (50) mortgage loans, representing 4.4% of the mortgage pool (44 mortgage loans in loan group 1 or 5.5% and 6 mortgage loans in loan group 2 or 1.6%), provide that principal and interest are due prior to and until maturity. | ||
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The following tables set forth additional characteristics of the mortgage loans that we anticipate to be included in the trust fund as of the cut-off date:
Range of Cut-Off Date Balances
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Range of Cut-Off Date Balances ($) | ![]() | ![]() | Number of Mortgage Loans | ![]() | ![]() | Aggregate Cut-Off Date Balance | ![]() | ![]() | Percentage of Cut-Off Date Pool Balance | ![]() | ![]() | Percentage of Cut-Off Date Group 1 Balance | ![]() | ![]() | Percentage of Cut-Off Date Group 2 Balance | |||||||||||||||
860,000 - 2,000,000 | ![]() | ![]() | ![]() | ![]() | 6 | ![]() | ![]() | ![]() | ![]() | $ | 8,535,951 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.1 | % | ![]() | ![]() | ![]() | ![]() | 0.1 | % | ![]() | ![]() | ![]() | ![]() | 0.1 | % |
2,000,001 - - 3,000,000 | ![]() | ![]() | ![]() | ![]() | 19 | ![]() | ![]() | ![]() | ![]() | ![]() | 50,543,446 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.6 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.1 | ![]() |
3,000,001 - - 4,000,000 | ![]() | ![]() | ![]() | ![]() | 29 | ![]() | ![]() | ![]() | ![]() | ![]() | 105,458,243 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.8 | ![]() |
4,000,001 - - 5,000,000 | ![]() | ![]() | ![]() | ![]() | 21 | ![]() | ![]() | ![]() | ![]() | ![]() | 96,571,172 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.2 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
5,000,001 - - 6,000,000 | ![]() | ![]() | ![]() | ![]() | 21 | ![]() | ![]() | ![]() | ![]() | ![]() | 117,165,536 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.6 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.2 | ![]() |
6,000,001 - - 7,000,000 | ![]() | ![]() | ![]() | ![]() | 11 | ![]() | ![]() | ![]() | ![]() | ![]() | 72,371,788 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.9 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.9 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.9 | ![]() |
7,000,001 - - 8,000,000 | ![]() | ![]() | ![]() | ![]() | 10 | ![]() | ![]() | ![]() | ![]() | ![]() | 75,863,249 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.9 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.0 | ![]() |
8,000,001 - - 9,000,000 | ![]() | ![]() | ![]() | ![]() | 13 | ![]() | ![]() | ![]() | ![]() | ![]() | 112,705,434 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.4 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.2 | ![]() |
9,000,001 - - 10,000,000 | ![]() | ![]() | ![]() | ![]() | 8 | ![]() | ![]() | ![]() | ![]() | ![]() | 75,567,506 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.2 | ![]() |
10,000,001 - - 15,000,000 | ![]() | ![]() | ![]() | ![]() | 34 | ![]() | ![]() | ![]() | ![]() | ![]() | 432,042,106 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.9 | ![]() | ![]() | ![]() | ![]() | ![]() | 4.5 | ![]() |
15,000,001 - - 20,000,000 | ![]() | ![]() | ![]() | ![]() | 20 | ![]() | ![]() | ![]() | ![]() | ![]() | 345,720,950 | ![]() | ![]() | ![]() | ![]() | ![]() | 4.4 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.2 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.3 | ![]() |
20,000,001 - - 25,000,000 | ![]() | ![]() | ![]() | ![]() | 13 | ![]() | ![]() | ![]() | ![]() | ![]() | 293,275,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.2 | ![]() | ![]() | ![]() | ![]() | ![]() | 4.9 | ![]() |
25,000,001 - - 30,000,000 | ![]() | ![]() | ![]() | ![]() | 11 | ![]() | ![]() | ![]() | ![]() | ![]() | 307,180,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.9 | ![]() | ![]() | ![]() | ![]() | ![]() | 4.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.7 | ![]() |
30,000,001 - - 35,000,000 | ![]() | ![]() | ![]() | ![]() | 9 | ![]() | ![]() | ![]() | ![]() | ![]() | 296,730,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 4.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.5 | ![]() |
35,000,001 - - 40,000,000 | ![]() | ![]() | ![]() | ![]() | 7 | ![]() | ![]() | ![]() | ![]() | ![]() | 268,525,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.4 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.1 | ![]() |
40,000,001 - - 45,000,000 | ![]() | ![]() | ![]() | ![]() | 5 | ![]() | ![]() | ![]() | ![]() | ![]() | 213,833,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.8 | ![]() |
45,000,001 - - 50,000,000 | ![]() | ![]() | ![]() | ![]() | 6 | ![]() | ![]() | ![]() | ![]() | ![]() | 290,052,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 4.2 | ![]() |
50,000,001 - - 55,000,000 | ![]() | ![]() | ![]() | ![]() | 2 | ![]() | ![]() | ![]() | ![]() | ![]() | 106,225,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.9 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
55,000,001 - - 60,000,000 | ![]() | ![]() | ![]() | ![]() | 4 | ![]() | ![]() | ![]() | ![]() | ![]() | 237,015,357 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 4.2 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
60,000,001 - - 65,000,000 | ![]() | ![]() | ![]() | ![]() | 2 | ![]() | ![]() | ![]() | ![]() | ![]() | 123,118,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.6 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.2 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
70,000,001 - - 75,000,000 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 75,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.9 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
90,000,001 - - 100,000,000 | ![]() | ![]() | ![]() | ![]() | 2 | ![]() | ![]() | ![]() | ![]() | ![]() | 195,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
150,000,001 - - 200,000,000 | ![]() | ![]() | ![]() | ![]() | 3 | ![]() | ![]() | ![]() | ![]() | ![]() | 556,500,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 7.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 9.9 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
200,000,001 - - 300,000,000 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 280,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
300,000,001 - - 400,000,000 | ![]() | ![]() | ![]() | ![]() | 2 | ![]() | ![]() | ![]() | ![]() | ![]() | 702,500,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 8.9 | ![]() | ![]() | ![]() | ![]() | ![]() | 12.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
400,000,001 - - 500,000,000 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 430,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.4 | ![]() | ![]() | ![]() | ![]() | ![]() | 7.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
500,000,001 - - 1,000,000,000 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 536,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 6.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 9.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
1,000,000,001 - - 1,500,000,000 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 1,500,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 19.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 65.5 | ![]() |
Total | ![]() | ![]() | ![]() | ![]() | 263 | ![]() | ![]() | ![]() | ![]() | $ | 7,903,498,737 | ![]() | ![]() | ![]() | ![]() | ![]() | 100.0 | % | ![]() | ![]() | ![]() | ![]() | 100.0 | % | ![]() | ![]() | ![]() | ![]() | 100.0 | % |
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S-44
Range of Mortgage Rates
![](https://capedge.com/proxy/FWP/0000950136-07-001383/spacer.gif)
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Range of Mortgage Rates (%) | ![]() | ![]() | Number of Mortgage Loans | ![]() | ![]() | Aggregate Cut-Off Date Balance | ![]() | ![]() | Percentage of Cut-Off Date Pool Balance | ![]() | ![]() | Percentage of Cut-Off Date Group 1 Balance | ![]() | ![]() | Percentage of Cut-Off Date Group 2 Balance | |||||||||||||||
5.180 - 5.250 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | $ | 24,100,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.3 | % | ![]() | ![]() | ![]() | ![]() | 0.0 | % | ![]() | ![]() | ![]() | ![]() | 1.1 | % |
5.251 - - 5.500 | ![]() | ![]() | ![]() | ![]() | 27 | ![]() | ![]() | ![]() | ![]() | ![]() | 1,594,751,357 | ![]() | ![]() | ![]() | ![]() | ![]() | 20.2 | ![]() | ![]() | ![]() | ![]() | ![]() | 26.6 | ![]() | ![]() | ![]() | ![]() | ![]() | 4.4 | ![]() |
5.501 - - 5.750 | ![]() | ![]() | ![]() | ![]() | 104 | ![]() | ![]() | ![]() | ![]() | ![]() | 2,313,151,347 | ![]() | ![]() | ![]() | ![]() | ![]() | 29.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 34.4 | ![]() | ![]() | ![]() | ![]() | ![]() | 16.6 | ![]() |
5.751 - - 6.000 | ![]() | ![]() | ![]() | ![]() | 98 | ![]() | ![]() | ![]() | ![]() | ![]() | 1,627,768,942 | ![]() | ![]() | ![]() | ![]() | ![]() | 20.6 | ![]() | ![]() | ![]() | ![]() | ![]() | 24.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 10.5 | ![]() |
6.001 - - 6.250 | ![]() | ![]() | ![]() | ![]() | 25 | ![]() | ![]() | ![]() | ![]() | ![]() | 663,525,091 | ![]() | ![]() | ![]() | ![]() | ![]() | 8.4 | ![]() | ![]() | ![]() | ![]() | ![]() | 11.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.7 | ![]() |
6.251 - - 6.500 | ![]() | ![]() | ![]() | ![]() | 6 | ![]() | ![]() | ![]() | ![]() | ![]() | 1,658,202,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 21.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 65.7 | ![]() |
6.501 - - 6.750 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 14,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.2 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.2 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
6.751 - - 6.830 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 8,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Total | ![]() | ![]() | ![]() | ![]() | 263 | ![]() | ![]() | ![]() | ![]() | $ | 7,903,498,737 | ![]() | ![]() | ![]() | ![]() | ![]() | 100.0 | % | ![]() | ![]() | ![]() | ![]() | 100.0 | % | ![]() | ![]() | ![]() | ![]() | 100.0 | % |
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Range of Underwritten DSC Ratios*
![](https://capedge.com/proxy/FWP/0000950136-07-001383/spacer.gif)
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() |
Range of Underwritten DSCRs (x) | ![]() | ![]() | Number of Mortgage Loans | ![]() | ![]() | Aggregate Cut-Off Date Balance | ![]() | ![]() | Percentage of Cut-Off Date Pool Balance | ![]() | ![]() | Percentage of Cut-Off Date Group 1 Balance | ![]() | ![]() | Percentage of Cut-Off Date Group 2 Balance | |||||||||||||||
1.06 - 1.09 | ![]() | ![]() | ![]() | ![]() | 2 | ![]() | ![]() | ![]() | ![]() | $ | 68,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.9 | % | ![]() | ![]() | ![]() | ![]() | 1.2 | % | ![]() | ![]() | ![]() | ![]() | 0.0 | % |
1.10 - - 1.14 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 536,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 6.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 9.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
1.15 - - 1.19 | ![]() | ![]() | ![]() | ![]() | 11 | ![]() | ![]() | ![]() | ![]() | ![]() | 561,500,270 | ![]() | ![]() | ![]() | ![]() | ![]() | 7.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 9.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.7 | ![]() |
1.20 - - 1.24 | ![]() | ![]() | ![]() | ![]() | 65 | ![]() | ![]() | ![]() | ![]() | ![]() | 2,020,578,031 | ![]() | ![]() | ![]() | ![]() | ![]() | 25.6 | ![]() | ![]() | ![]() | ![]() | ![]() | 31.6 | ![]() | ![]() | ![]() | ![]() | ![]() | 10.7 | ![]() |
1.25 - - 1.29 | ![]() | ![]() | ![]() | ![]() | 43 | ![]() | ![]() | ![]() | ![]() | ![]() | 602,342,760 | ![]() | ![]() | ![]() | ![]() | ![]() | 7.6 | ![]() | ![]() | ![]() | ![]() | ![]() | 8.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.9 | ![]() |
1.30 - - 1.34 | ![]() | ![]() | ![]() | ![]() | 35 | ![]() | ![]() | ![]() | ![]() | ![]() | 1,081,107,881 | ![]() | ![]() | ![]() | ![]() | ![]() | 13.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 17.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.9 | ![]() |
1.35 - - 1.39 | ![]() | ![]() | ![]() | ![]() | 23 | ![]() | ![]() | ![]() | ![]() | ![]() | 331,140,136 | ![]() | ![]() | ![]() | ![]() | ![]() | 4.2 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.3 | ![]() |
1.40 - - 1.44 | ![]() | ![]() | ![]() | ![]() | 17 | ![]() | ![]() | ![]() | ![]() | ![]() | 258,676,506 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.8 | ![]() |
1.45 - - 1.49 | ![]() | ![]() | ![]() | ![]() | 10 | ![]() | ![]() | ![]() | ![]() | ![]() | 175,024,618 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.2 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.1 | ![]() |
1.50 - - 1.54 | ![]() | ![]() | ![]() | ![]() | 7 | ![]() | ![]() | ![]() | ![]() | ![]() | 63,182,192 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.8 | ![]() |
1.55 - - 1.59 | ![]() | ![]() | ![]() | ![]() | 10 | ![]() | ![]() | ![]() | ![]() | ![]() | 121,907,282 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.7 | ![]() |
1.60 - - 1.64 | ![]() | ![]() | ![]() | ![]() | 3 | ![]() | ![]() | ![]() | ![]() | ![]() | 58,700,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
1.65 - - 1.69 | ![]() | ![]() | ![]() | ![]() | 3 | ![]() | ![]() | ![]() | ![]() | ![]() | 46,448,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.6 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.8 | ![]() |
1.70 - - 1.74 | ![]() | ![]() | ![]() | ![]() | 11 | ![]() | ![]() | ![]() | ![]() | ![]() | 1,605,198,061 | ![]() | ![]() | ![]() | ![]() | ![]() | 20.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 66.0 | ![]() |
1.75 - - 1.79 | ![]() | ![]() | ![]() | ![]() | 3 | ![]() | ![]() | ![]() | ![]() | ![]() | 31,697,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.4 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.6 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
1.80 - - 1.84 | ![]() | ![]() | ![]() | ![]() | 2 | ![]() | ![]() | ![]() | ![]() | ![]() | 5,055,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
1.90 - - 1.94 | ![]() | ![]() | ![]() | ![]() | 6 | ![]() | ![]() | ![]() | ![]() | ![]() | 41,031,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
1.95 - - 1.99 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 95,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.2 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
2.00 - - 2.04 | ![]() | ![]() | ![]() | ![]() | 2 | ![]() | ![]() | ![]() | ![]() | ![]() | 4,560,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
2.05 - - 2.09 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 35,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.4 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.6 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
2.10 - - 2.14 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 16,200,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.2 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
2.15 - - 2.19 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 100,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
2.25 - - 2.29 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 12,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.2 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.2 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
2.30 - - 3.47 | ![]() | ![]() | ![]() | ![]() | 4 | ![]() | ![]() | ![]() | ![]() | ![]() | 33,150,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.4 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.4 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.4 | ![]() |
Total | ![]() | ![]() | ![]() | ![]() | 263 | ![]() | ![]() | ![]() | ![]() | $ | 7,903,498,737 | ![]() | ![]() | ![]() | ![]() | ![]() | 100.0 | % | ![]() | ![]() | ![]() | ![]() | 100.0 | % | ![]() | ![]() | ![]() | ![]() | 100.0 | % |
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* | Certain of the mortgage loans reflect LTV Ratios that have been calculated on an ‘‘as-stabilized’’ basis, or that have LTV Ratios or DSCRs that have been adjusted to take into account certain cash reserves or letters of credit. See ‘‘DESCRIPTION OF THE MORTGAGE POOL—Additional Mortgage Loan Information’’ and ‘‘RISK FACTORS—Risks Relating to Net Cash Flow’’ and ‘‘—Inspections and Appraisals May Not Accurately Reflect Value or Condition of Mortgaged Property’’ in this Prospectus Supplement. For purposes of determining the debt service coverage ratios for 1 mortgage loan (loan number 1), representing approximately 19.0% of the mortgage pool (65.5% of loan group 2), the underwritten net cash flow used to calculate the debt service coverage ratio was determined using future cash flow projections that include various assumptions including an assumed annual rate of conversion of units from rent-stabilized units to deregulated units. See ‘‘DESCRIPTION OF THE MORTGAGE POOL—Additional Mortgage Loan Information’’ and ‘‘RISK FACTORS—Risks Related to Net Cash Flow’’ in this prospectus supplement and the description of the Peter Cooper Village and Stuyvesant Town mortgage loan in Annex D to this prospectus supplement. |
S-45
Range of Cut-Off Date LTV Ratios*
![](https://capedge.com/proxy/FWP/0000950136-07-001383/spacer.gif)
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() |
Range of Cut-Off Date LTV Ratios (%) | ![]() | ![]() | Number of Mortgage Loans | ![]() | ![]() | Aggregate Cut-Off Date Balance | ![]() | ![]() | Percentage of Cut-Off Date Pool Balance | ![]() | ![]() | Percentage of Cut-Off Date Group 1 Balance | ![]() | ![]() | Percentage of Cut-Off Date Group 2 Balance | |||||||||||||||
36.36 - 40.00 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | $ | 6,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.1 | % | ![]() | ![]() | ![]() | ![]() | 0.1 | % | ![]() | ![]() | ![]() | ![]() | 0.0 | % |
40.01 - - 50.00 | ![]() | ![]() | ![]() | ![]() | 7 | ![]() | ![]() | ![]() | ![]() | ![]() | 181,539,618 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.4 | ![]() |
50.01 - - 55.00 | ![]() | ![]() | ![]() | ![]() | 6 | ![]() | ![]() | ![]() | ![]() | ![]() | 131,787,440 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
55.01 - - 60.00 | ![]() | ![]() | ![]() | ![]() | 18 | ![]() | ![]() | ![]() | ![]() | ![]() | 1,674,811,500 | ![]() | ![]() | ![]() | ![]() | ![]() | 21.2 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.9 | ![]() | ![]() | ![]() | ![]() | ![]() | 68.5 | ![]() |
60.01 - - 65.00 | ![]() | ![]() | ![]() | ![]() | 20 | ![]() | ![]() | ![]() | ![]() | ![]() | 309,699,718 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.9 | ![]() | ![]() | ![]() | ![]() | ![]() | 4.2 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.1 | ![]() |
65.01 - - 70.00 | ![]() | ![]() | ![]() | ![]() | 35 | ![]() | ![]() | ![]() | ![]() | ![]() | 490,780,619 | ![]() | ![]() | ![]() | ![]() | ![]() | 6.2 | ![]() | ![]() | ![]() | ![]() | ![]() | 7.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.5 | ![]() |
70.01 - - 75.00 | ![]() | ![]() | ![]() | ![]() | 67 | ![]() | ![]() | ![]() | ![]() | ![]() | 1,963,247,815 | ![]() | ![]() | ![]() | ![]() | ![]() | 24.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 29.6 | ![]() | ![]() | ![]() | ![]() | ![]() | 13.1 | ![]() |
75.01 - - 80.00 | ![]() | ![]() | ![]() | ![]() | 105 | ![]() | ![]() | ![]() | ![]() | ![]() | 2,706,572,027 | ![]() | ![]() | ![]() | ![]() | ![]() | 34.2 | ![]() | ![]() | ![]() | ![]() | ![]() | 43.6 | ![]() | ![]() | ![]() | ![]() | ![]() | 11.4 | ![]() |
80.01 - - 85.00 | ![]() | ![]() | ![]() | ![]() | 2 | ![]() | ![]() | ![]() | ![]() | ![]() | 24,520,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.4 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
85.01 - - 87.18 | ![]() | ![]() | ![]() | ![]() | 2 | ![]() | ![]() | ![]() | ![]() | ![]() | 414,540,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.2 | ![]() | ![]() | ![]() | ![]() | ![]() | 7.4 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Total | ![]() | ![]() | ![]() | ![]() | 263 | ![]() | ![]() | ![]() | ![]() | $ | 7,903,498,737 | ![]() | ![]() | ![]() | ![]() | ![]() | 100.0 | % | ![]() | ![]() | ![]() | ![]() | 100.0 | % | ![]() | ![]() | ![]() | ![]() | 100.0 | % |
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* | Certain of the mortgage loans reflect LTV ratios that have been calculated on an ‘‘as-stabilized’’ basis, or that have LTV ratios or DSCRs that have been adjusted to take into account certain cash reserves or letters of credit. See ‘‘DESCRIPTION OF THE MORTGAGE POOL—Additional Mortgage Loan Information’’ and ‘‘RISK FACTORS—Risks Relating to Net Cash flow’’ and ‘‘—Inspections and Appraisals May Not Accurately Reflect Value or Condition of Mortgaged Property’’ in this prospectus supplement. |
Range of Remaining Terms to Maturity or Anticipated Repayment Date*
![](https://capedge.com/proxy/FWP/0000950136-07-001383/spacer.gif)
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() |
Range of Remaining Terms (months) | ![]() | ![]() | Number of Mortgage Loans | ![]() | ![]() | Aggregate Cut-Off Date Balance | ![]() | ![]() | Percentage of Cut-Off Date Pool Balance | ![]() | ![]() | Percentage of Cut-Off Date Group 1 Balance | ![]() | ![]() | Percentage of Cut-Off Date Group 2 Balance | |||||||||||||||
56 - 60 | ![]() | ![]() | ![]() | ![]() | 30 | ![]() | ![]() | ![]() | ![]() | $ | 1,165,011,420 | ![]() | ![]() | ![]() | ![]() | ![]() | 14.7 | % | ![]() | ![]() | ![]() | ![]() | 17.9 | % | ![]() | ![]() | ![]() | ![]() | 7.1 | % |
61 - - 84 | ![]() | ![]() | ![]() | ![]() | 2 | ![]() | ![]() | ![]() | ![]() | ![]() | 195,679,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
85 - - 108 | ![]() | ![]() | ![]() | ![]() | 2 | ![]() | ![]() | ![]() | ![]() | ![]() | 8,972,548 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.3 | ![]() |
109 - - 120 | ![]() | ![]() | ![]() | ![]() | 228 | ![]() | ![]() | ![]() | ![]() | ![]() | 6,531,735,769 | ![]() | ![]() | ![]() | ![]() | ![]() | 82.6 | ![]() | ![]() | ![]() | ![]() | ![]() | 78.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 92.7 | ![]() |
121 - - 132 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 2,100,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Total | ![]() | ![]() | ![]() | ![]() | 263 | ![]() | ![]() | ![]() | ![]() | $ | 7,903,498,737 | ![]() | ![]() | ![]() | ![]() | ![]() | 100.0 | % | ![]() | ![]() | ![]() | ![]() | 100.0 | % | ![]() | ![]() | ![]() | ![]() | 100.0 | % |
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* | With respect to the mortgage loans with anticipated repayment dates, the remaining term to maturity was calculated as of the related anticipated repayment date. |
Amortization Types
![](https://capedge.com/proxy/FWP/0000950136-07-001383/spacer.gif)
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Amortization Type | ![]() | ![]() | Number of Mortgage Loans | ![]() | ![]() | Aggregate Cut-Off Date Balance | ![]() | ![]() | Percentage of Cut-Off Date Pool Balance | ![]() | ![]() | Percentage of Cut-Off Date Group 1 Balance | ![]() | ![]() | Percentage of Cut-Off Date Group 2 Balance | |||||||||||||||
Non-Amortizing | ![]() | ![]() | ![]() | ![]() | 103 | ![]() | ![]() | ![]() | ![]() | $ | 5,680,440,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 71.9 | % | ![]() | ![]() | ![]() | ![]() | 64.6 | % | ![]() | ![]() | ![]() | ![]() | 89.8 | % |
Interest-only, Amortizing Balloon* | ![]() | ![]() | ![]() | ![]() | 93 | ![]() | ![]() | ![]() | ![]() | ![]() | 1,738,248,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 22.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 28.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 6.2 | ![]() |
Amortizing Balloon | ![]() | ![]() | ![]() | ![]() | 47 | ![]() | ![]() | ![]() | ![]() | ![]() | 335,613,414 | ![]() | ![]() | ![]() | ![]() | ![]() | 4.2 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.6 | ![]() |
Interest-only, ARD | ![]() | ![]() | ![]() | ![]() | 13 | ![]() | ![]() | ![]() | ![]() | ![]() | 110,921,500 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.4 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.5 | ![]() |
Interest-only, Amortizing ARD* | ![]() | ![]() | ![]() | ![]() | 4 | ![]() | ![]() | ![]() | ![]() | ![]() | 27,269,240 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Fully Amortizing | ![]() | ![]() | ![]() | ![]() | 2 | ![]() | ![]() | ![]() | ![]() | ![]() | 6,712,440 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Amortizing ARD | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 4,294,143 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Total | ![]() | ![]() | ![]() | ![]() | 263 | ![]() | ![]() | ![]() | ![]() | $ | 7,903,498,737 | ![]() | ![]() | ![]() | ![]() | ![]() | 100.0 | % | ![]() | ![]() | ![]() | ![]() | 100.0 | % | ![]() | ![]() | ![]() | ![]() | 100.0 | % |
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* | These mortgage loans require payments of interest-only for a period of 12 to 84 months from origination prior to the commencement of payments of principal and interest with respect to the mortgage pool (a period of 12 to 84 months with respect to loan group 1 and a period of 24 to 84 months with respect to loan group 2). |
S-46
Types of IO Period
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Type of IO Period | ![]() | ![]() | Number of Mortgage Loans | ![]() | ![]() | Aggregate Cut-Off Date Balance | ![]() | ![]() | Percentage of Cut-Off Date Pool Balance | ![]() | ![]() | Percentage of Cut-Off Date Group 1 Balance | ![]() | ![]() | Percentage of Cut-Off Date Group 2 Balance | |||||||||||||||
Non-Amortizing | ![]() | ![]() | ![]() | ![]() | 116 | ![]() | ![]() | ![]() | ![]() | $ | 5,791,361,500 | ![]() | ![]() | ![]() | ![]() | ![]() | 73.3 | % | ![]() | ![]() | ![]() | ![]() | 65.5 | % | ![]() | ![]() | ![]() | ![]() | 92.3 | % |
Partial Interest Only Amortizing | ![]() | ![]() | ![]() | ![]() | 97 | ![]() | ![]() | ![]() | ![]() | ![]() | 1,765,517,240 | ![]() | ![]() | ![]() | ![]() | ![]() | 22.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 28.9 | ![]() | ![]() | ![]() | ![]() | ![]() | 6.2 | ![]() |
1 - - 12 | ![]() | ![]() | ![]() | ![]() | 3 | ![]() | ![]() | ![]() | ![]() | ![]() | 23,495,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.4 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
13 - - 24 | ![]() | ![]() | ![]() | ![]() | 15 | ![]() | ![]() | ![]() | ![]() | ![]() | 206,329,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.6 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.3 | ![]() |
25 - - 36 | ![]() | ![]() | ![]() | ![]() | 16 | ![]() | ![]() | ![]() | ![]() | ![]() | 279,555,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.1 | ![]() |
37 - - 48 | ![]() | ![]() | ![]() | ![]() | 4 | ![]() | ![]() | ![]() | ![]() | ![]() | 64,250,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.4 | ![]() |
49 - - 60 | ![]() | ![]() | ![]() | ![]() | 54 | ![]() | ![]() | ![]() | ![]() | ![]() | 1,047,398,240 | ![]() | ![]() | ![]() | ![]() | ![]() | 13.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 18.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.4 | ![]() |
61 - - 72 | ![]() | ![]() | ![]() | ![]() | 2 | ![]() | ![]() | ![]() | ![]() | ![]() | 60,140,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
73 - - 84 | ![]() | ![]() | ![]() | ![]() | 3 | ![]() | ![]() | ![]() | ![]() | ![]() | 84,350,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.9 | ![]() |
Amortizing — No Partial Interest Only Period | ![]() | ![]() | ![]() | ![]() | 50 | ![]() | ![]() | ![]() | ![]() | ![]() | 346,619,997 | ![]() | ![]() | ![]() | ![]() | ![]() | 4.4 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.6 | ![]() |
Total | ![]() | ![]() | ![]() | ![]() | 263 | ![]() | ![]() | ![]() | ![]() | $ | 7,903,498,737 | ![]() | ![]() | ![]() | ![]() | ![]() | 100.0 | % | ![]() | ![]() | ![]() | ![]() | 100.0 | % | ![]() | ![]() | ![]() | ![]() | 100.0 | % |
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![]() | Balloon loans have amortization schedules significantly longer than their terms to maturity and have substantial principal payments due on their maturity dates, unless prepaid earlier. | |
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![]() | Mortgage loans providing for anticipated repayment dates generally fully or substantially amortize through their terms to maturity. However, if this type of mortgage loan is not prepaid by a date specified in its related mortgage note, interest will accrue at a higher rate and the related borrower will be required to apply all cash flow generated by the mortgaged property in excess of its regular debt service payments and certain other permitted expenses and reserves to repay principal on the mortgage loan. | |
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![]() | In addition, the fixed periodic payment on the mortgage loans is generally determined assuming interest is calculated on a ‘‘30/360 basis,’’ but since interest actually accrues and is applied on the majority of the mortgage loans on an ‘‘actual/360 basis,’’ there will be less amortization, absent prepayments, of the principal balance during the term of the related mortgage loan, resulting in a higher final payment on such mortgage loan. This will occur even if a mortgage loan is a ‘‘fully amortizing’’ mortgage loan. | |
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![]() | See ‘‘DESCRIPTION OF THE MORTGAGE POOL— Certain Terms and Conditions of the Mortgage Loans’’ in this prospectus supplement. | |
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Prepayment Restrictions | ![]() | All of the mortgage loans included in the trust fund restrict or prohibit voluntary prepayments of principal in some manner for some period of time. |
S-47
Types of Prepayment Restrictions
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Prepayment Provision(1)(2) | ![]() | ![]() | Number of Mortgage Loans | ![]() | ![]() | Aggregate Cut-Off Date Balance | ![]() | ![]() | Percentage of Cut-Off Date Pool Balance | ![]() | ![]() | Percentage of Cut-Off Date Group 1 Balance | ![]() | ![]() | Percentage of Cut-Off Date Group 2 Balance | |||||||||||||||
Lockout/Defeasance/Open | ![]() | ![]() | ![]() | ![]() | 204 | ![]() | ![]() | ![]() | ![]() | $ | 6,822,593,168 | ![]() | ![]() | ![]() | ![]() | ![]() | 86.3 | % | ![]() | ![]() | ![]() | ![]() | 85.8 | % | ![]() | ![]() | ![]() | ![]() | 87.6 | % |
Lockout/Yield Maintenance/Open | ![]() | ![]() | ![]() | ![]() | 33 | ![]() | ![]() | ![]() | ![]() | ![]() | 475,007,071 | ![]() | ![]() | ![]() | ![]() | ![]() | 6.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 6.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 4.7 | ![]() |
Yield Maintenance/Open | ![]() | ![]() | ![]() | ![]() | 13 | ![]() | ![]() | ![]() | ![]() | ![]() | 230,163,498 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.9 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.0 | ![]() |
Lockout/Defeasance or Yield Maintenance/Open | ![]() | ![]() | ![]() | ![]() | 9 | ![]() | ![]() | ![]() | ![]() | ![]() | 218,920,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.8 | ![]() |
Yield Maintenance/Defeasance or Yield Maintenance/Open | ![]() | ![]() | ![]() | ![]() | 3 | ![]() | ![]() | ![]() | ![]() | ![]() | 143,655,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.6 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Yield Maintenance/Defeasance/Open | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 13,160,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.2 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.2 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Total | ![]() | ![]() | ![]() | ![]() | 263 | ![]() | ![]() | ![]() | ![]() | $ | 7,903,498,737 | ![]() | ![]() | ![]() | ![]() | ![]() | 100.0 | % | ![]() | ![]() | ![]() | ![]() | 100.0 | % | ![]() | ![]() | ![]() | ![]() | 100.0 | % |
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(1) | For the purposes hereof, ‘‘remaining term’’ refers to either remaining term to maturity or anticipated repayment date, as applicable. |
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(2) | See ‘‘RISK FACTORS—The Offered Certificates—Prepayments Will Affect Your Yield—Performance Escrows’’ in this prospectus supplement. |
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![]() | See ‘‘DESCRIPTION OF THE MORTGAGE POOL— Additional Mortgage Loan Information’’ in this prospectus supplement. The ability of the master servicer or special servicer to waive or modify the terms of any mortgage loan relating to the payment of a prepayment premium or yield maintenance charge will be limited as described in this prospectus supplement. See ‘‘SERVICING OF THE MORTGAGE LOANS—Modifications, Waivers and Amendments’’ in this prospectus supplement. We make no representations as to the enforceability of the provisions of any mortgage notes requiring the payment of a prepayment premium or yield maintenance charge or limiting prepayments to defeasance or the ability of the master servicer or special servicer to collect any prepayment premium or yield maintenance charge. | |
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Defeasance | ![]() | Two hundred seventeen (217) of the mortgage loans included in the trust fund as of the cut-off date, representing 91.1% of the mortgage pool (178 mortgage loans in loan group 1 or 91.4% and 39 mortgage loans in loan group 2 or 90.3%), permit the borrower, under certain conditions, to substitute United States government obligations as collateral for the related mortgage loans (or a portion thereof) following their respective lock-out or yield-maintenance periods. Upon substitution, the related mortgaged property (or, in the case of a mortgage loan secured by multiple mortgaged properties, one or more of such mortgaged properties) will no longer secure the related mortgage loan. The payments on the defeasance collateral are required to be at least equal to an amount sufficient to make, when due, all payments on the related mortgage loan or allocated to the related mortgaged property; provided that in the case of certain mortgage loans, |
S-48
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![]() | these defeasance payments may cease at the beginning of the open prepayment period with respect to that mortgage loan (or on a prepayment date thereafter that is prior to the scheduled maturity date), and the final payment on the defeasance collateral on that prepayment date would be required to fully prepay the mortgage loan. Defeasance may not occur prior to the second anniversary of the issuance of the certificates. See ‘‘DESCRIPTION OF THE MORTGAGE POOL—Certain Terms and Conditions of the Mortgage Loans—Prepayment Provisions’’ in this prospectus supplement. | |
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Twenty Largest Mortgage Loans | ![]() | The following table describes certain characteristics of the twenty largest mortgage loans or groups of cross collateralized mortgage loans in the trust fund by aggregate principal balance as of the cut-off date. With respect to the mortgage loans referred to as the Peter Cooper Village & Stuyvesant Town mortgage loan, the Five Times Square mortgage loan, the State Street Financial Center mortgage loan and the 485 Lexington Avenue mortgage loan in the immediately following table, the loan balance per square foot/unit, the debt service coverage ratio and the loan-to-value ratio set forth in such table is based on the aggregate combined principal balance or combined debt service, as the case may be, and the pari passu companion loan (but not any related subordinate companion loan) and with respect to each mortgage loan with a related subordinate companion loan, the loan balance per square foot/room/unit, the debt service coverage ratio and the loan-to-value ratio set forth in such table excludes any such subordinate companion loans. No companion loans are included in the trust fund. |
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![]() | For more information on the twenty largest mortgage loans in the trust fund, see ‘‘DESCRIPTION OF THE MORTGAGE POOL—Twenty Largest Mortgage Loans’’ in this prospectus supplement and Annex D to this prospectus supplement. | |
S-49
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Loan Name | ![]() | ![]() | Mortgage Loan Seller | ![]() | ![]() | Number of Mortgage Loans / Mortgaged Properties | ![]() | ![]() | Loan Group | ![]() | ![]() | Cut-Off Date Balance | ![]() | ![]() | % of Initial Pool Balance | ![]() | ![]() | % of Initial Group Balance | ![]() | ![]() | Property Type | ![]() | ![]() | Cut-Off Date Balance Per SF/Unit/ Room(1) | ![]() | ![]() | Weighted Average DSCR(1)(2) | ![]() | ![]() | Weighted Average Cut-Off Date LTV Ratio(1)(2) | ![]() | ![]() | Weighted Average LTV Ratio at Maturity or ARD(1)(2) | ![]() | ![]() | Weighted Average Mortgage Rate | ||||||||||||||||||||||||||||||
Peter Cooper Village & Stuyvesant Town(3) | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 2 | ![]() | ![]() | ![]() | ![]() | 2 | ![]() | ![]() | ![]() | ![]() | $ | 1,500,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 19.0 | % | ![]() | ![]() | ![]() | ![]() | 65.5 | % | ![]() | ![]() | Multifamily — Conventional | ![]() | ![]() | ![]() | $ | 267,213 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.73x | ![]() | ![]() | ![]() | ![]() | ![]() | 55.6 | % | ![]() | ![]() | ![]() | ![]() | 55.6 | % | ![]() | ![]() | ![]() | ![]() | 6.434 | % |
Five Times Square | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 536,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 6.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 9.5 | % | ![]() | ![]() | Office — CBD | ![]() | ![]() | ![]() | $ | 973 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.10x | ![]() | ![]() | ![]() | ![]() | ![]() | 80.0 | % | ![]() | ![]() | ![]() | ![]() | 80.0 | % | ![]() | ![]() | ![]() | ![]() | 5.454 | % |
350 Park Avenue | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 430,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.4 | ![]() | ![]() | ![]() | ![]() | ![]() | 7.7 | % | ![]() | ![]() | Office — CBD | ![]() | ![]() | ![]() | $ | 799 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.21x | ![]() | ![]() | ![]() | ![]() | ![]() | 78.2 | % | ![]() | ![]() | ![]() | ![]() | 78.2 | % | ![]() | ![]() | ![]() | ![]() | 5.482 | % |
State Street Financial Center | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 387,500,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 4.9 | ![]() | ![]() | ![]() | ![]() | ![]() | 6.9 | % | ![]() | ![]() | Office — CBD | ![]() | ![]() | ![]() | $ | 756 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.16x | ![]() | ![]() | ![]() | ![]() | ![]() | 87.2 | % | ![]() | ![]() | ![]() | ![]() | 87.2 | % | ![]() | ![]() | ![]() | ![]() | 5.659 | % |
485 Lexington Avenue | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 315,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 4.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.6 | % | ![]() | ![]() | Office — CBD | ![]() | ![]() | ![]() | $ | 492 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.20x | ![]() | ![]() | ![]() | ![]() | ![]() | 70.9 | % | ![]() | ![]() | ![]() | ![]() | 70.9 | % | ![]() | ![]() | ![]() | ![]() | 5.608 | % |
One South Dearborn | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 280,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.0 | % | ![]() | ![]() | Office — CBD | ![]() | ![]() | ![]() | $ | 333 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.21x | ![]() | ![]() | ![]() | ![]() | ![]() | 80.0 | % | ![]() | ![]() | ![]() | ![]() | 80.0 | % | ![]() | ![]() | ![]() | ![]() | 6.136 | % |
One Congress Street | ![]() | ![]() | ![]() | ![]() | Artesia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 190,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.4 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.4 | % | ![]() | ![]() | Mixed Use — Parking Garage/Office/Retail | ![]() | ![]() | ![]() | $ | 158 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.30x | ![]() | ![]() | ![]() | ![]() | ![]() | 73.7 | % | ![]() | ![]() | ![]() | ![]() | 73.7 | % | ![]() | ![]() | ![]() | ![]() | 6.074 | % |
Four Seasons Aviara Resort - Carlsbad, CA | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 186,500,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.4 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.3 | % | ![]() | ![]() | Hospitality — Full Service | ![]() | ![]() | ![]() | $ | 566,869 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.31x | ![]() | ![]() | ![]() | ![]() | ![]() | 74.3 | % | ![]() | ![]() | ![]() | ![]() | 74.3 | % | ![]() | ![]() | ![]() | ![]() | 5.940 | % |
Bank One Center | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 180,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.2 | % | ![]() | ![]() | Office — CBD | ![]() | ![]() | ![]() | $ | 118 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.33x | ![]() | ![]() | ![]() | ![]() | ![]() | 72.9 | % | ![]() | ![]() | ![]() | ![]() | 68.0 | % | ![]() | ![]() | ![]() | ![]() | 5.767 | % |
9 West 57th Street | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 100,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.8 | % | ![]() | ![]() | Land — Office(4) | ![]() | ![]() | ![]() | $ | 72 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.18x | ![]() | ![]() | ![]() | ![]() | ![]() | 43.9 | % | ![]() | ![]() | ![]() | ![]() | 43.9 | % | ![]() | ![]() | ![]() | ![]() | 5.450 | % |
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | 10/ 11 | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | $ | 4,105,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 51.9 | % | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | 1.42x | ![]() | ![]() | ![]() | ![]() | ![]() | 69.1 | % | ![]() | ![]() | ![]() | ![]() | 68.9 | % | ![]() | ![]() | ![]() | ![]() | 5.957 | % | ||||||
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![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||
New York Marriott at the Brooklyn Bridge | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | $ | 95,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.2 | % | ![]() | ![]() | ![]() | ![]() | 1.7 | % | ![]() | ![]() | Hospitality — Full Service | ![]() | ![]() | ![]() | $ | 144,817 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.98x | ![]() | ![]() | ![]() | ![]() | ![]() | 53.4 | % | ![]() | ![]() | ![]() | ![]() | 46.9 | % | ![]() | ![]() | ![]() | ![]() | 5.640 | % |
One & Two Eldridge Place | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 75,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.9 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.3 | % | ![]() | ![]() | Office — Suburban | ![]() | ![]() | ![]() | $ | 145 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.28x | ![]() | ![]() | ![]() | ![]() | ![]() | 74.3 | % | ![]() | ![]() | ![]() | ![]() | 68.9 | % | ![]() | ![]() | ![]() | ![]() | 5.410 | % |
NJ Office Pool | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 4 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 62,118,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.1 | % | ![]() | ![]() | Office — Suburban | ![]() | ![]() | ![]() | $ | 116 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.39x | ![]() | ![]() | ![]() | ![]() | ![]() | 60.8 | % | ![]() | ![]() | ![]() | ![]() | 60.8 | % | ![]() | ![]() | ![]() | ![]() | 6.170 | % |
PNC Corporate Plaza | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 61,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.1 | % | ![]() | ![]() | Office — CBD | ![]() | ![]() | ![]() | $ | 105 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.22x | ![]() | ![]() | ![]() | ![]() | ![]() | 77.8 | % | ![]() | ![]() | ![]() | ![]() | 72.8 | % | ![]() | ![]() | ![]() | ![]() | 5.996 | % |
1384 Broadway | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 60,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.1 | % | ![]() | ![]() | Office — CBD | ![]() | ![]() | ![]() | $ | 294 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.21x | ![]() | ![]() | ![]() | ![]() | ![]() | 77.1 | % | ![]() | ![]() | ![]() | ![]() | 69.3 | % | ![]() | ![]() | ![]() | ![]() | 5.700 | % |
Duane Reade - - 661 Eighth Avenue, New York, NY | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 60,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.1 | % | ![]() | ![]() | Retail — Single Tenant | ![]() | ![]() | ![]() | $ | 4,688 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.06x | ![]() | ![]() | ![]() | ![]() | ![]() | 75.0 | % | ![]() | ![]() | ![]() | ![]() | 75.0 | % | ![]() | ![]() | ![]() | ![]() | 5.850 | % |
818 West 7th Street | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 59,915,357 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.1 | % | ![]() | ![]() | Office — CBD | ![]() | ![]() | ![]() | $ | 159 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.32x | ![]() | ![]() | ![]() | ![]() | ![]() | 70.5 | % | ![]() | ![]() | ![]() | ![]() | 58.8 | % | ![]() | ![]() | ![]() | ![]() | 5.430 | % |
Spring Mill Corporate Center | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 57,100,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.0 | % | ![]() | ![]() | Mixed Use — Office/Industrial | ![]() | ![]() | ![]() | $ | 92 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.34x | ![]() | ![]() | ![]() | ![]() | ![]() | 70.8 | % | ![]() | ![]() | ![]() | ![]() | 65.5 | % | ![]() | ![]() | ![]() | ![]() | 5.810 | % |
Wildcat Self Storage Pool | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 9 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 53,200,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.9 | % | ![]() | ![]() | Self Storage | ![]() | ![]() | ![]() | $ | 67 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.37x | ![]() | ![]() | ![]() | ![]() | ![]() | 80.0 | % | ![]() | ![]() | ![]() | ![]() | 80.0 | % | ![]() | ![]() | ![]() | ![]() | 5.700 | % |
Sealy C Pool | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 14 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 53,025,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.9 | % | ![]() | ![]() | Industrial — Flex | ![]() | ![]() | ![]() | $ | 53 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.24x | ![]() | ![]() | ![]() | ![]() | ![]() | 75.0 | % | ![]() | ![]() | ![]() | ![]() | 70.0 | % | ![]() | ![]() | ![]() | ![]() | 5.830 | % |
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | 10 / 34 | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | $ | 636,358,357 | ![]() | ![]() | ![]() | ![]() | ![]() | 8.1 | % | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | 1.38x | ![]() | ![]() | ![]() | ![]() | ![]() | 70.4 | % | ![]() | ![]() | ![]() | ![]() | 65.6 | % | ![]() | ![]() | ![]() | ![]() | 5.741 | % | ||||||
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | 20 / 45 | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | $ | 4,741,358,357 | ![]() | ![]() | ![]() | ![]() | ![]() | 60.0 | % | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | 1.41x | ![]() | ![]() | ![]() | ![]() | ![]() | 69.3 | % | ![]() | ![]() | ![]() | ![]() | 68.5 | % | ![]() | ![]() | ![]() | ![]() | 5.928 | % | ||||||
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(1) | The Peter Cooper Village & Stuyvesant Town mortgage loan, the Five Times Square mortgage loan, the State Street Financial Center mortgage loan and the 485 Lexington Avenue mortgage loan are part of split loan structures that include one or more pari passu companion loans that are not included in the trust fund. With respect to each mortgage loan, unless otherwise specified, the calculation of loan-to-value ratios, debt service coverage ratios and cut-off date balance per square foot/unit are based on the aggregate indebtedness of or debt service on, as applicable, the related mortgage loan and the related pari passu companion loan, but not any related subordinate companion loan or future pari passu companion loan. |
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(2) | Certain of the mortgage loans reflect loan-to-value ratios that have been calculated on an ‘‘as-stabilized’’ basis, or have loan-to-value ratios or debt service coverage ratios that have been adjusted to take into account certain cash reserves or letters of credit. Also, see ‘‘DESCRIPTION OF THE MORTGAGE POOL—Additional Mortgage Loan Information’’ and ‘‘RISK FACTORS—Risks Relating to Net Cash Flow’’ and ‘‘—Inspections and Appraisals May Not Accurately Reflect Value or Condition of Mortgaged Property’’ in this prospectus supplement. |
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(3) | The underwritten net cash flow used to calculate the debt service coverage ratios was determined using future cash flow projections that include various assumptions including an assumed annual rate of conversion of units from rent-stabilized units to deregulated units. The debt service coverage ratios for the related mortgaged property calculated based on the net operating income for year 2006 is 0.58x. See ‘‘RISK FACTORS—Risks Relating to Net Cash Flow’’ in this prospectus supplement. |
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(4) | The mortgaged property related to the 9 West 57th Street mortgage loan is improved by an office building that is not part of the collateral for the mortgage loan. |
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Co-Lender Loans | ![]() | Sixteen (16) mortgage loans to be included in the trust fund, representing approximately 41.0% of the mortgage pool as of the cut-off date (13 mortgage loans in loan group 1 or 30.4% and 3 mortgage loans in loan group 2 or 67.1%), are, in each case, evidenced by one of two or more notes or sets of notes which are secured by one or more mortgaged properties. In each case, the related companion loan or companion loans will not be part of the trust fund. |
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![]() | Three (3) mortgage loans, the Peter Cooper Village & Stuyvesant Town mortgage loan, the State Street Financial Center mortgage loan and the 485 Lexington Avenue mortgage loan (loan numbers 1, 4 and 5), are part of split loan structures where one or more companion loans are part of the applicable split loan structure and are pari passu in right of entitlement to payment with the related mortgage loan. One (1) mortgage loan, the Five Times Square mortgage loan (loan number 2), is part of a split loan structure where one of the related companion loans that is part of the split loan structure is pari passu in right of entitlement to payment with the related mortgage loan and the other related companion loan that is part of the split loan structure is subordinate to the related mortgage loan and the related pari passu companion loan. The remaining co-lender loans (loan numbers 7, 14, 18, 29, 33, 43, 45, 80, 85, 159, 171 and 218) are part of split loan structures in which the related companion loan(s) is subordinate to the related mortgage loan. In each case, the related companion loan or companion loans will not be part of the trust fund. Each of these mortgage loans and its related companion loans are subject to intercreditor agreements. | |
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![]() | The intercreditor agreement for each of the Peter Cooper Village & Stuyvesant Town mortgage loan, the Five Times Square mortgage loan, the State Street Financial Center mortgage loan and the 485 Lexington Avenue mortgage loan generally allocates collections in respect of each whole loan to the related mortgage loan and its related pari passu companion loan(s), on a pro rata basis. The intercreditor agreements for each of the remaining mortgage loans that are part of a split loan structure that includes one or more subordinate companion loans generally allocate collections in respect of that mortgage loan and its related subordinate companion loan(s), first, to the related mortgage loan, up to amounts due and payable thereon and then to the related subordinate companion loan(s) up to amounts due and payable thereon. However, prepayments will generally be allocated on a pro rata basis prior to default. No companion loan is included in the trust fund. No subordinate companion loan will bear losses or provide credit support in respect of unrelated mortgage loans. | |
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![]() | The master servicer and special servicer will service and administer each of these mortgage loans and its related companion loans (other than the State Street Financial Center mortgage loan and its pari passu companion loan) pursuant to the pooling and servicing agreement and the related intercreditor agreement, for so long as the related mortgage loan is part of the trust fund. | |
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![]() | The State Street Financial Center mortgage loan and its companion loan is being serviced pursuant to the pooling and | |
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![]() | servicing agreement entered into in connection with the issuance of the LB-UBS Commercial Mortgage Trust 2007-C1, Commercial Mortgage Pass-Through Certificates, Series 2007-C1. The master servicer under the LB-UBS 2007-C1 pooling and servicing agreement is KeyCorp Real Estate Capital Markets, Inc., the special servicer under the LB-UBS 2007-C1 pooling and servicing agreement is Midland Loan Services, Inc. and the trustee under the LB-UBS 2007-C1 pooling and servicing agreement is LaSalle Bank, National Association. The terms of the LB-UBS 2007-C1 pooling and servicing agreement are generally similar (but are not identical) to the terms of the pooling and servicing agreement for this transaction. See ‘‘SERVICING OF THE MORTGAGE LOANS—Servicing of the State Street Financial Center Loan’’ in this prospectus supplement. | |
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![]() | In addition, with respect to 1 mortgage loan, the Peter Cooper Village & Stuyvesant Town mortgage loan (loan number 1), the related mortgage loan documents permit the related borrower to obtain up to $300,000,000 of any combination of pari passu mortgage debt secured by a second mortgage on the related mortgaged property and subordinate mezzanine debt at any time between November 2011 and May 2013. No future pari passu companion loans will be included in the trust fund. | |
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![]() | Amounts attributable to any companion loan will not be assets of the trust fund and will be beneficially owned by the holder of such companion loan. See ‘‘DESCRIPTION OF THE MORTGAGE POOL—Co-Lender Loans’’ in this prospectus supplement. | |
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![]() | See ‘‘DESCRIPTION OF THE MORTGAGE POOL—Co-Lender Loans’’ and ‘‘SERVICING OF THE MORTGAGE LOANS’’ in this prospectus supplement for a description of certain rights of the holders of these companion loans to direct or consent to the servicing of the related mortgage loans. | |
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![]() | In addition to the mortgage loans described above, certain of the mortgaged properties or the equity interests in the related borrowers are subject to, or are permitted to become subject to, additional debt. In certain cases, this additional debt is secured by the related mortgaged properties. See ‘‘RISK FACTORS—The Mortgage Loans—Additional Debt on Some Mortgage Loans Creates Additional Risks’’ in this prospectus supplement. | |
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RISK FACTORS
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• | You should carefully consider, among other things, the following risk factors (as well as the risk factors set forth under ‘‘RISK FACTORS’’ in the accompanying prospectus) before making your investment decision. Additional risks are described elsewhere in this prospectus supplement under separate headings in connection with discussions regarding particular aspects of the mortgage loans included in the trust fund or the certificates. |
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• | The risks and uncertainties described below are not the only ones relating to your certificates. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair your investment. |
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• | This prospectus supplement contains forward-looking statements that involve risk and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including risks described below and elsewhere in this prospectus supplement. |
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• | If any of the following risks are realized, your investment could be materially and adversely affected. |
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• | In connection with the risks and uncertainties described below which may relate to certain of the mortgage loans, or the mortgage pool in general, examples are given with respect to particular risks and particular mortgage loans. The fact that examples are given should not be interpreted to mean that the examples reflect all of the mortgage loans in the trust fund to which the risk is applicable. |
The Offered Certificates
Only Mortgage Loans Are Available to Pay You
Neither the offered certificates nor the mortgage loans will be guaranteed or insured by us or any of our affiliates, by any governmental agency or instrumentality or by any other person. If the assets of the trust fund, primarily the mortgage loans, are insufficient to make payments on the offered certificates, no other assets will be available for payment of the deficiency. See ‘‘RISK FACTORS—The Assets of the Trust Fund May Not Be Sufficient to Pay Your Certificates’’ in the accompanying prospectus.
Prepayments Will Affect Your Yield
Prepayments. The yield to maturity on the offered certificates will depend on the rate and timing of principal payments (including both voluntary prepayments, in the case of mortgage loans that permit voluntary prepayment, and involuntary prepayments, such as prepayments resulting from casualty or condemnation, defaults, liquidations or repurchases for breaches of representations or warranties or other sales of defaulted mortgage loans which, in either case, may not require any accompanying prepayment premium or yield maintenance charge) on the mortgage loans included in the trust fund and how such payments are allocated among the offered certificates entitled to distributions of principal.
In addition, upon the occurrence of certain limited events, a party may be required or permitted to repurchase or purchase a mortgage loan from the trust fund and the money paid would be passed through to the holders of the certificates with the same effect as if such mortgage loan had been prepaid in full (except that no prepayment premium or yield maintenance charge would be payable with respect to a purchase or repurchase). In addition, certain mortgage loans may permit prepayment without an accompanying prepayment premium or yield maintenance charge if the mortgagee elects to apply casualty or condemnation proceeds to the mortgage loan. We cannot make any representation as to the anticipated rate of prepayments (voluntary or involuntary) on the mortgage loans or as to the anticipated yield to maturity of any certificate.
With respect to 1 mortgage loan (loan number 1), representing 19.0% of the mortgage pool (65.5% of loan group 2), under certain circumstances, including satisfaction of debt service reserve and loan-to- value tests, the related borrower is permitted to release a portion or portions of the mortgaged property
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in connection with a development rights release. In such an event, amounts paid by the related borrower will be applied pro rata among the mortgage loan and related mezzanine loans.
With respect to 1 mortgage loan (loan number 130), representing 0.1% of the mortgage pool (0.2% of loan group 1), the mortgagee may, in the event the related mortgaged property fails to achieve certain debt service coverage or occupancy thresholds, require the balance of the mortgage loan to be prepaid. In addition, because the amount of principal that will be distributed to the Class A-1, Class A-2, Class A-3, Class A-4, Class A-PB, Class A-5 and Class A-1A certificates will generally be based upon the particular loan group in which the related mortgage loan is deemed to be a part, the yield on the Class A-1, Class A-2, Class A-3, Class A-4, Class A-PB and Class A-5 certificates will be particularly sensitive to prepayments on mortgage loans in loan group 1 and the yield on the Class A-1A certificates will be particularly sensitive to prepayments on mortgage loans in loan group 2.
See ‘‘YIELD AND MATURITY CONSIDERATIONS’’ in this prospectus supplement and ‘‘YIELD CONSIDERATIONS’’ in the accompanying prospectus.
Yield. In general, if you purchase an offered certificate at a premium and principal distributions on that offered certificate occur at a rate faster than you anticipated at the time of purchase, and no prepayment premiums or yield maintenance charges are collected, your actual yield to maturity may be lower than you had predicted at the time of purchase. Conversely, if you purchase an offered certificate at a discount and principal distributions on that offered certificate occur at a rate slower than you anticipated at the time of purchase, your actual yield to maturity may be lower than you had predicted at the time of purchase.
The yield on the Class A-1A, Class A-M, Class A-J, Class B, Class C, Class D, Class E and Class F certificates could be adversely affected if mortgage loans with higher mortgage interest rates pay faster than mortgage loans with lower mortgage interest rates, since those classes bear interest at a rate equal to, based upon or limited by the weighted average net mortgage rate of the mortgage loans. In addition, because there can be no assurances with respect to losses, prepayments and performance of the mortgage loans, there can be no assurance that distributions of principal on the Class A-PB certificates will be made in conformity with the schedule attached on Annex F to this prospectus supplement.
Interest Rate Environment. Mortgagors generally are less likely to prepay if prevailing interest rates are at or above the rates borne by their mortgage loans. On the other hand, mortgagors are generally more likely to prepay if prevailing interest rates fall significantly below the mortgage interest rates of their mortgage loans. Mortgagors are generally less likely to prepay mortgage loans with a lockout period, yield maintenance charge or prepayment premium provision, to the extent enforceable, than similar mortgage loans without such provisions, with shorter lockout periods or with lower yield maintenance charges or prepayment premiums.
Performance Escrows. In connection with the origination of some of the mortgage loans, the related borrowers were required to escrow funds or post a letter of credit related to obtaining certain performance objectives. In general, such funds will be released to the related borrower upon the satisfaction of certain conditions. If the conditions are not satisfied, although the master servicer will be directed in the pooling and servicing agreement (in accordance with the servicing standard) to hold the escrows, letters of credit or proceeds of such letters of credit as additional collateral and not use the funds to reduce the principal balance of the related mortgage loan, in the event such funds are required to be used to reduce the principal balance of such mortgage loans, such amounts will be passed through to the holders of the certificates as principal prepayments.
For example, with respect to 1 mortgage loan (loan number 208), representing approximately 0.1% of the mortgage pool (0.1% of loan group 1), the related mortgage loan documents provide for a reserve in the amount of $94,248, and with respect to another mortgage loan (loan number 130), representing approximately 0.1% of the mortgage pool (0.2% of loan group 1), the related mortgage loan documents provide for a reserve or letter of credit in the amount of $448,000 (and additional letter(s) of credit and reserves under certain circumstances), and in the case of each such mortgage loan the outstanding balance of such reserve or letter of credit may under certain circumstances described in the related mortgage loan documents be applied, in the mortgagee’s sole discretion, to the partial prepayment of the related
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mortgage loan, in which event the related mortgage loan debt service payments will be reduced to reflect the lower principal balance and re-amortization of such principal balance based upon the original amortization period for the related mortgage loan.
See ‘‘YIELD AND MATURITY CONSIDERATIONS—Yield Considerations’’ and the modeling assumptions described in ‘‘YIELD AND MATURITY CONSIDERATIONS—Weighted Average Life’’ in this prospectus supplement.
Premiums. Provisions requiring prepayment premiums and yield maintenance charges may not be enforceable in some states and under federal bankruptcy law, and may constitute interest for usury purposes. Accordingly, we cannot provide assurance that the obligation to pay that premium or charge will be enforceable or, if enforceable, that the foreclosure proceeds will be sufficient to pay such prepayment premium or yield maintenance charge. Additionally, although the collateral substitution provisions related to defeasance are not intended to be, and do not have the same effect on the certificateholders as a prepayment, we cannot provide assurance that a court would not interpret such provisions as requiring a prepayment premium or yield maintenance charge and possibly determine that such provisions are unenforceable or usurious under applicable law. Prepayment premiums and yield maintenance charges are generally not charged for prepayments resulting from casualty or condemnation and would not be paid in connection with repurchases of mortgage loans for breaches of representations or warranties or a material document defect. No prepayment premium or yield maintenance charge will be required for prepayments in connection with a casualty or condemnation unless, in the case of certain of the mortgage loans, an event of default has occurred and is continuing.
Pool Concentrations. Principal payments (including prepayments) on the mortgage loans included in the trust fund or in a particular group will occur at different rates. In addition, mortgaged properties can be released from the trust fund as a result of prepayments, defeasance, repurchases, casualties or condemnations. As a result, the aggregate balance of the mortgage loans concentrated in various property types in the trust fund or in a particular loan group changes over time. You therefore may be exposed to varying concentration risks as the mixture of property types and relative principal balance of the mortgage loans associated with certain property types changes. See the table entitled ‘‘Range of Remaining Terms to Maturity or Anticipated Repayment Date for all Mortgage Loans as of the Cut-Off Date’’ in Annex B to this prospectus supplement for a description of the respective maturity dates of the mortgage loans included in the trust fund and in each loan group. Because principal on the certificates (other than the Class X-P, Class X-C, Class X-W, Class Z, Class R-I and Class R-II certificates) is payable in sequential order to the extent described under ‘‘DESCRIPTION OF THE CERTIFICATES—Distributions’’ in this prospectus supplement, classes that have a lower priority of distributions are more likely to be exposed to the risk of changing concentrations discussed under ‘‘—The Mortgage Loans—Special Risks Associated With High Balance Mortgage Loans’’ below than classes with a higher sequential priority.
Optional Early Termination of the Trust Fund May Result in an Adverse Impact on Your Yield or May Result in a Loss
The offered certificates will be subject to optional early termination by means of the purchase of the mortgage loans in the trust fund. We cannot assure you that the proceeds from a sale of the mortgage loans will be sufficient to distribute the outstanding certificate balance plus accrued interest and any undistributed shortfalls in interest accrued on the certificates that are subject to the termination. Accordingly, the holders of offered certificates affected by such a termination may suffer an adverse impact on the overall yield on their certificates, may experience repayment of their investment at an unpredictable and inopportune time or may even incur a loss on their investment. See ‘‘DESCRIPTION OF THE CERTIFICATES—Termination’’ in this prospectus supplement.
Borrower Defaults May Adversely Affect Your Yield
The aggregate amount of distributions on the offered certificates, the yield to maturity of the offered certificates, the rate of principal payments on the offered certificates and the weighted average life of the offered certificates will be affected by the rate and timing of delinquencies and defaults on the mortgage loans included in the trust fund. Delinquencies on the mortgage loans included in the trust fund, if the
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delinquent amounts are not advanced, may result in shortfalls in distributions of interest and/or principal to the offered certificates for the current month. Any late payments received on or in respect of the mortgage loans will be distributed to the certificates in the priorities described more fully in this prospectus supplement, but no interest will accrue on such shortfall during the period of time such payment is delinquent.
If you calculate your anticipated yield based on an assumed default rate and an assumed amount of losses on the mortgage pool that are lower than the default rate and the amount of losses actually experienced, and if such losses are allocated to your class of certificates, your actual yield to maturity will be lower than the yield so calculated and could, under certain scenarios, be negative. The timing of any loss on a liquidated mortgage loan also will affect the actual yield to maturity of the offered certificates to which all or a portion of such loss is allocable, even if the rate of defaults and severity of losses are consistent with your expectations. In general, the earlier you bear a loss, the greater the effect on your yield to maturity. See ‘‘YIELD AND MATURITY CONSIDERATIONS’’ in this prospectus supplement and ‘‘YIELD CONSIDERATIONS’’ in the accompanying prospectus.
Even if losses on the mortgage loans included in the trust fund are allocated to a particular class of offered certificates, such losses may affect the weighted average life and yield to maturity of other certificates. Losses on the mortgage loans, to the extent not allocated to such class of offered certificates, may result in a higher percentage ownership interest evidenced by such certificates than would otherwise have resulted absent such loss. The consequent effect on the weighted average life and yield to maturity of the offered certificates will depend upon the characteristics of the remaining mortgage loans.
Additional Compensation and Certain Reimbursements to the Servicer Will Affect Your Right to Receive Distributions
To the extent described in this prospectus supplement, the master servicer, the special servicer or the trustee, as applicable, will be entitled to receive interest on unreimbursed advances and unreimbursed servicing expenses. See ‘‘RISK FACTORS—Additional Compensation and Certain Reimbursements to the Servicer Will Affect Your Right to Receive Distributions’’ in the accompanying prospectus.
Subordination of Subordinate Offered Certificates
As described in this prospectus supplement, unless your certificates are Class A-1, Class A-2, Class A-3, Class A-4, Class A-PB, Class A-5 or Class A-1A certificates, your rights to receive distributions of amounts collected or advanced on or in respect of the mortgage loans will be subordinated to those of the holders of the offered certificates with an earlier payment priority. See ‘‘DESCRIPTION OF THE CERTIFICATES—Distributions—Application of the Available Distribution Amount’’ and ‘‘DESCRIPTION OF THE CERTIFICATES—Subordination; Allocation of Losses and Certain Expenses’’ in this prospectus supplement.
Your Lack of Control Over the Trust Fund Can Create Risks
You and other certificateholders generally do not have a right to vote and do not have the right to make decisions with respect to the administration of the trust fund. See ‘‘SERVICING OF THE MORTGAGE LOANS—General’’ in this prospectus supplement. Those decisions are generally made, subject to the express terms of the pooling and servicing agreement, by the master servicer, the trustee or the special servicer, as applicable. Any decision made by one of those parties in respect of the trust fund, even if that decision is determined to be in your best interests by that party, may be contrary to the decision that you or other certificateholders would have made and may negatively affect your interests.
Under certain circumstances, the consent or approval of less than all certificateholders will be required to take, and will bind all certificateholders to, certain actions relating to the trust fund. The interests of those certificateholders may be in conflict with those of the other certificateholders. For example, certificateholders of certain classes that are subordinate in right of payment may direct the actions of the special servicer with respect to troubled mortgage loans and related mortgaged properties. In certain circumstances, the holder of a companion loan, mezzanine loan or subordinate debt may direct
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the actions of the special servicer with respect to the related mortgage loan and the holder of a companion loan, mezzanine loan or subordinate debt will have certain consent rights relating to foreclosure or modification of the related loans. The interests of such holder of a companion loan, mezzanine loan or subordinate debt may be in conflict with those of the certificateholders.
Sixteen (16) of the mortgage loans (loan numbers 1, 2, 4, 5, 7, 14, 18, 29, 33, 43, 45, 80, 85, 159, 171 and 218), representing 41.0% of the mortgage pool (13 mortgage loans in loan group 1 or 30.4% and 3 mortgage loans in group 2 or 67.1%), are each part of a split loan structure in which the related whole loan is evidenced by multiple promissory notes. With respect to the State Street Financial Center mortgage loan, the other pari passu note is included in the trust fund created in connection with the LB-UBS Commercial Mortgage Trust 2007-C1, Commercial Mortgage Pass-Through Certificates, Series 2007-C1 transaction. With respect to 1 mortgage loan, the Five Times Square mortgage loan (loan number 2), is part of a split loan structure where two of the related companion loans that are part of the split loan structure are pari passu in right of entitlement to payment with the related mortgage loan and the other related companion loan that is part of the split loan structure is subordinate to the related mortgage loan and the related pari passu companion loan. The pari passu companion loans and subordinate companion loan are not part of the trust fund and it is expected that the pari passu companion loans will be sold into a commercial mortgage loan securitization in the future. With respect to 12 mortgage loans evidenced by multiple promissory notes, the related mortgage loans are each part of a split loan structure where one or more promissory notes are subordinate in right of payment to the other promissory note. In each case, the trust fund does not include the subordinate companion note(s). In addition, such holders of the pari passu companion note or the subordinate companion notes may have been granted various rights and powers pursuant to the related intercreditor agreement or other similar agreement, including cure rights and purchase options with respect to the related mortgage loans and, in the case of certain subordinate companion loans, the right to direct, approve or disapprove servicing actions involving the related whole loan and to replace the special servicer for the related whole loan. In some cases, the foregoing rights and powers may be assignable or may be exercised through a representative or designee. Accordingly, these rights may potentially conflict with the interests of the certificateholders.
Additionally, less than all of the certificateholders may amend the pooling and servicing agreement in certain circumstances.
See ‘‘SERVICING OF THE MORTGAGE LOANS—The Controlling Class Representative’’ in this prospectus supplement and ‘‘DESCRIPTION OF THE CERTIFICATES—Voting Rights’’ in this prospectus supplement and the accompanying prospectus.
The Mortgage Loan Sellers, the Depositor and the Issuing Entity Are Subject to Bankruptcy or Insolvency Laws That May Affect the Trust Fund’s Ownership of the Mortgage Loans
In the event of the bankruptcy or insolvency of any mortgage loan seller or the depositor, it is possible the trust fund’s right to payment from or ownership of the mortgage loans could be challenged, and if such challenge were successful, delays or reductions in payments on your certificates could occur.
Based upon opinions of counsel that the conveyance of the mortgage loans would generally be respected in the event of a bankruptcy or insolvency of a mortgage loan seller or the depositor, which opinions are subject to various assumptions and qualifications, the depositor and the issuing entity believe that such a challenge will be unsuccessful, but there can be no assurance that a bankruptcy trustee, if applicable, or other interested party will not attempt to assert such a position. Even if actions seeking such results were not successful, it is possible that payments on the certificates would be delayed while a court resolves the claim.
In addition, since the issuing entity is a common law trust, it may not be eligible for relief under the federal bankruptcy laws, unless it can be characterized as a ‘‘business trust’’ for purposes of the federal bankruptcy laws. Bankruptcy courts look at various considerations in making this determination, so it is not possible to predict with any certainty whether or not the issuing entity would be characterized as a ‘‘business trust.’’ Even if a bankruptcy court were to determine that the issuing entity was a ‘‘business trust’’, it is possible that payments on the certificates would be delayed while the court resolved the issue.
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Liquidity for Certificates May Be Limited
There is currently no secondary market for the offered certificates. While each underwriter has advised us that it intends to make a secondary market in one or more classes of the offered certificates, none of them are under any obligation to do so. No secondary market for your certificates may develop. If a secondary market does develop, there can be no assurance that it will be available for the offered certificates or, if it is available, that it will provide holders of the offered certificates with liquidity of investment or continue for the life of your certificates.
Lack of liquidity could result in a substantial decrease in the market value of your certificates. Your certificates will not be listed on any securities exchange at the time of closing and may never be listed on any securities exchange or traded in any automated quotation system of any registered securities association such as NASDAQ.
Potential Conflicts of Interest
The master servicer is one of the mortgage loan sellers, a sponsor and an affiliate of the depositor and one of the underwriters. These affiliations could cause conflicts with the master servicer’s duties to the trust fund under the pooling and servicing agreement. However, the pooling and servicing agreement provides that the mortgage loans shall be administered in accordance with the servicing standard described in this prospectus supplement without regard to an affiliation with a mortgage loan seller, any other party to the pooling and servicing agreement or any of their affiliates. See ‘‘SERVICING OF THE MORTGAGE LOANS—General’’ in this prospectus supplement.
Wachovia Bank, National Association (which is the master servicer, a mortgage loan seller and a sponsor) or one of its affiliates is also the initial holder of certain companion loans with respect to 6 mortgage loans (loan numbers 1, 14, 18, 33, 43 and 45), representing 21.8% of the mortgage pool (4 mortgage loans in loan group 1 or 3.4% and 2 mortgage loans in loan group 2 or 67.0%). Artesia Mortgage Capital Corporation (which is a mortgage loan seller and a sponsor) or one of its affiliates is also the initial holder of certain companion loans with respect to 1 mortgage loan (loan number 7), representing 2.4% of the mortgage pool (3.4% of loan group 1). In addition, Wachovia Bank, National Association is also an equity owner of Capital Lease, LP, the holder of the companion loans with respect to 2 mortgage loans (loan numbers 80 and 85), representing 0.4% of the mortgage pool (0.6% of loan group 1). In addition, Wachovia Bank, National Association is the initial holder of the mezzanine loans related to 18 mortgage loans (loan numbers 1, 2, 9, 13, 18, 19, 23, 42, 46, 47, 51, 55, 60, 61, 70, 82, 88 and 117), representing 34.2% of the mortgage pool (12 mortgage loans in loan group 1 or 19.6% and 6 mortgage loans in loan group 2 or 69.9%). Accordingly, a conflict may arise between Wachovia Bank, National Association’s duties to the trust fund under the pooling and servicing agreement and its or its affiliate’s interest as a holder of a companion loan, mezzanine loan or the holder of certain certificates. See ‘‘DESCRIPTION OF THE MORTGAGE POOL—Co-Lender Loans’’ in this prospectus supplement. In addition, Wachovia Bank, National Association is a partial equity owner of Triple Net Properties, LLC, which is an affiliate of the borrower with respect to 6 mortgage loans (loan numbers 65, 74, 76, 120, 126 and 131), representing 1.1% of the mortgage pool (3 mortgage loans in loan group 1 or 0.7% and 3 mortgage loans in loan group 2 or 2.3%). Wachovia Bank, National Association is also the initial holder of certain subordinate debt which encumbers the mortgaged properties securing 6 mortgage loans (loan numbers 25, 35, 49, 76, 109 and 131), representing 2.0% of the mortgage pool (5 mortgage loans in loan group 1 or 2.6% and 1 mortgage loan in loan group 2 or 0.6%). Accordingly, a conflict may arise between Wachovia Bank, National Association’s duties to the trust fund under the pooling and servicing agreement and its or its affiliate’s interest as a holder of a companion loan, the holder of mezzanine indebtedness or the holder of certain other indebtedness secured by the related mortgaged property. See ‘‘DESCRIPTION OF THE MORTGAGE POOL—Certain Terms and Conditions of the Mortgage Loans—Other Financing’’ in this prospectus supplement.
In addition, with respect to 11 mortgage loans (loan numbers 13, 19, 23, 42, 51, 60, 61, 70, 82, 88 and 117), representing 4.3% of the mortgage pool (6 mortgage loans in loan group 1 or 4.2% and 5 mortgage loans in loan group 2 or 4.4%), Wachovia Development Corporation, an affiliate of Wachovia Bank, National Association, owns a preferred equity interest in the related borrower. As a result, a conflict could
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have arisen during the origination process as a result of Wachovia Bank, National Association being the originator of the related mortgage loan as well as the owner of the equity interests in the related borrower. In addition, a conflict may arise between Wachovia Bank, National Association’s duties to the trust fund under the pooling and servicing agreement and its affiliate’s equity interest in the related borrower. However, the pooling and servicing agreement provides that the mortgage loans shall be administered in accordance with the servicing standard described in this prospectus supplement without regard to any relationship that the master servicer or any affiliate thereof may have with the related borrower. In addition, the special servicer (and any related sub-servicer) will be involved in determining whether to modify or foreclose a defaulted mortgage loan. The special servicer is not affiliated with the master servicer or the related borrower.
Each of the master servicer, special servicer or any of their respective affiliates may, especially if it holds the non-offered certificates or subordinate companion loan(s) related to a mortgage loan, or has financial interests in, or other financial dealings with, a borrower or mortgage loan seller under any of the mortgage loans, have interests when dealing with the mortgage loans that are in conflict with the interests of holders of the offered certificates. For instance, if the special servicer or an affiliate holds non-offered certificates or subordinate companion loan(s) related to a mortgage loan, the special servicer could seek to reduce the potential for losses allocable to those certificates or subordinated companion loans from a troubled mortgage loan by deferring acceleration in the hope of maximizing future proceeds. The special servicer might also seek to reduce the potential for such losses by accelerating the mortgage loan earlier than necessary to avoid advance interest or additional trust fund expenses. Either action could result in less proceeds to the trust fund than would be realized if alternate action had been taken. In general, the master servicer, special servicer or any of their respective affiliates is not required to act in a manner more favorable to the holders of the offered certificates or any particular class of offered certificates than to the holders of the non-offered certificates or subordinated companion loans.
The special servicer will (and any related sub-servicer may) be involved in determining whether to modify or foreclose a defaulted mortgage loan. An affiliate of the special servicer may purchase certain other non-offered certificates. The special servicer or its affiliates may acquire non-performing loans or interests in non-performing loans, which may include REO properties that compete with the mortgaged properties securing mortgage loans in the trust fund. The special servicer or its affiliates own and are in the business of acquiring assets similar in type to the assets of the trust fund. The special servicer or its affiliates may also make loans on properties that may compete with the mortgaged properties and may also advise other clients that own or are in the business of owning properties that compete with the mortgaged properties or that own loans like the mortgage loans included in the trust fund. Accordingly, the assets of the special servicer and its affiliates may, depending upon the particular circumstances including the nature and location of such assets, compete with the mortgaged properties for tenants, purchasers, financing and so forth. See ‘‘SERVICING OF THE MORTGAGE LOANS—Modifications, Waivers and Amendments’’ in this prospectus supplement.
If the holder of a subordinate companion loan exercises its right (if any) to replace the special servicer for purposes of the special servicing of the related whole loan, the circumstances described above would generally apply to the replacement special servicer.
The circumstances described above could cause a conflict between the special servicer’s duties to the trust fund under the pooling and servicing agreement and its interest as a holder of a certificate. However, the pooling and servicing agreement provides that the mortgage loans shall be administered in accordance with the servicing standard without regard to ownership of any certificate by the master servicer, the special servicer or any affiliate of the special servicer. See ‘‘SERVICING OF THE MORTGAGE LOANS—General’’ in this prospectus supplement.
In addition, the related property managers and borrowers may experience conflicts of interest in the management and/or ownership of the mortgaged properties securing the mortgage loans because:
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• | a substantial number of the mortgaged properties are managed by property managers affiliated with the respective borrowers; or |
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• | these property managers also may manage and/or franchise additional properties, including properties that may compete with the mortgaged properties; or |
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• | affiliates of the property manager and/or the borrowers or the property managers and/or the borrowers themselves also may own other properties, including competing properties; or |
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• | the mortgaged property is self-managed. |
For example, with respect to 4 mortgage loans (loan numbers 3, 4, 5, and 10), representing 15.6% of the mortgage pool (22.0% of loan group 1), the property manager for each of the 4 mortgaged properties securing the related mortgage loan is an affiliate of the sponsor. See ‘‘DESCRIPTION OF THE MORTGAGE POOL—Twenty Largest Mortgage Loans’’ and Annex D to this prospectus supplement.
Moreover, with respect to certain of the mortgage loans, no lockbox has been established and the property manager has access to the proceeds from the related mortgaged property prior to such amounts being required to be deposited in the related escrow accounts or being paid to the mortgagee as debt service payments. Accordingly, since certain of these mortgage loans are managed by, or in the future may be managed by an affiliate of the related borrower, a potential conflict of interest could arise when such affiliated property manager receives proceeds from the related mortgaged property in a borrower-controlled account.
In addition, certain mortgage loans included in the trust fund may have been refinancings of debt previously held by (or by an affiliate of) one of the mortgage loan sellers.
The activities of the mortgage loan sellers and their affiliates may involve properties which are in the same markets as the mortgaged properties underlying the certificates. In such case, the interests of each of the mortgage loan sellers or such affiliates may differ from, and compete with, the interests of the trust fund, and decisions made with respect to those assets may adversely affect the amount and timing of distributions with respect to the certificates.
The Mortgage Loans
Future Cash Flow and Property Values Are Not Predictable
A number of factors, many beyond the control of the property owner, may affect the ability of an income-producing real estate project to generate sufficient net operating income to pay debt service and/or to maintain its value.
Certain of the mortgaged properties securing mortgage loans included in the trust fund have leases that expire or may be subject to tenant termination rights prior to the maturity date of the related mortgage loan. In addition, certain of the mortgaged properties securing mortgage loans included in the trust fund are leased to a single tenant which subjects the related borrower to increased risks in the event the tenant vacates and a replacement tenant is not readily available. See ‘‘—Single Tenants and Concentration of Tenants Subject the Trust Fund to Increased Risk’’ in this prospectus supplement.
In addition, with respect to 11 mortgage loans (loan numbers 77, 80, 112, 155, 187, 223, 224, 227, 247, 248 and 261), representing 1.0% of the mortgage pool (1.4% of loan group 1), certain of the major tenants at the related mortgaged property or other persons have rights of first refusal and/or purchase options on the related mortgaged property in accordance with the terms of the related mortgage loan documents. There can be no assurance that if such options are not waived, the mortgagee’s ability to sell the related mortgaged property at or after foreclosure may be impaired or may adversely affect the foreclosure proceeds or sale proceeds in a post-foreclosure sale.
If leases are not renewed or replaced, if tenants default, if rental rates fall, if tenants vacate the related mortgaged property during the terms of their respective leases and/or if operating expenses increase, the borrower’s ability to repay the loan may be impaired and the resale value of the property, which is substantially dependent upon the property’s ability to generate income, may decline. Even if borrowers successfully renew leases or relet vacated space, the costs associated with reletting, including tenant improvements, leasing commissions and free rent, can exceed the amount of any reserves maintained for that purpose and reduce cash from the mortgaged properties. Although some of the mortgage loans included in the trust fund require the borrower to maintain escrows for leasing expenses, there is no guarantee that these reserves will be sufficient. For example, with respect to 1 mortgage loan
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(loan number 1), representing 19.0% of the mortgage pool (65.5% of loan group 2), a borrower’s ability to make debt service payments will be dependent on its ability to convert multifamily units from rent stabilized or controlled units to market rents. Any change in the borrowers ability to accomplish this would significantly impair the future cash flow of the related property and the value of such property. See ‘‘ – Litigation May Have Adverse Effect on Borrowers’’ and the description of the mortgaged loan identified as ‘‘Peter Cooper Village & Stuyvesant Town’’ on Annex D to this prospectus supplement.
In addition, there are other factors, including changes in zoning or tax laws, restrictive covenants, tenant exclusives and rights of first refusal to lease or purchase, the availability of credit for refinancing and changes in interest-rate levels that may adversely affect the value of a project and/or the borrower’s ability to sell or refinance without necessarily affecting the ability to generate current income. In addition, certain of the mortgaged properties may be leased in whole or in part by government-sponsored tenants who may have certain rights to cancel their leases or reduce the rent payable with respect to such leases at any time for, among other reasons, lack of appropriations. For example, with respect to 15 mortgage loans (loan numbers 7, 17, 37, 38, 78, 89, 114, 128, 138, 142, 183, 202, 208, 213 and 222), representing 5.3% of the mortgage pool (7.4% of loan group 1), all or a material portion of the rentable area at the related mortgaged properties is occupied by one or more U.S. government or state government agencies. Although such U.S. government or state government leases generally do not permit the related tenant to terminate its lease due to any lack of appropriations, (loan numbers 183 and 208), representing 0.1% of the mortgage pool (0.2% of loan group 1) permit the tenant to terminate due to lack of appropriations and certain of the U.S. government and state government leases may permit the related tenant to terminate its lease after a specified date contained in the respective lease, some of which may be prior to the maturity date of the related mortgage loan, subject to certain terms and conditions contained therein.
Some Mortgaged Properties May Not Be Readily Convertible to Alternative Uses
Some of the mortgaged properties securing the mortgage loans included in the trust fund may not be readily convertible (or convertible at all) to alternative uses if those properties were to become unprofitable for any reason. For example, a mortgaged property may not be readily convertible (or convertible at all) due to restrictive covenants related to such mortgaged property including, in the case of mortgaged properties that are part of a condominium regime, the use and other restrictions imposed by the condominium declaration and other related documents, especially in a situation where a mortgaged property does not represent the entire condominium regime. In addition, mortgaged properties that have been designated as historic sites, may be difficult to convert to alternative uses and may also require certain governmental approvals to make alterations or modifications to the related mortgaged property. In addition, converting commercial properties to alternate uses generally requires substantial capital expenditures. The liquidation value of any mortgaged property, subject to limitations of the kind described above or other limitations on convertibility of use, may be substantially less than would be the case if the property were readily adaptable to other uses.
See ‘‘—Special Risks Associated with Industrial and Mixed-Use Facilities’’ below.
Borrowers’ Recent Acquisition of the Mortgaged Properties.
The related borrowers under 118 mortgage loans, representing 71.3% of the mortgage pool (96 mortgage loans in loan group 1 or 67.2% and 22 mortgage loans in loan group 2 or 81.4%), acquired all or part of their related mortgaged property contemporaneously with the origination of the related mortgage loan or within the prior 12 months of origination. Accordingly, these borrowers may have limited experience operating the particular mortgaged properties and, therefore, there is a risk that the net operating income and cash flow of such mortgaged properties may vary significantly from the operations, net operating income and cash flow generated by the related mortgaged properties under prior ownership and management.
Risks Relating to Certain Property Types
Particular types of income properties are exposed to particular risks. For instance:
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Special Risks Associated with Office Properties
Office properties secure, in whole or in part, 76 of the mortgage loans included in the trust fund as of the cut-off date, representing 43.1% of the mortgage pool (60.7% of loan group 1). See ‘‘RISK FACTORS—Special Risks of Mortgage Loans Secured by Office Properties’’ in the accompanying prospectus.
Included in the mortgage loans secured in whole or in part by office properties are 7 mortgage loans (loan numbers 86, 124, 128, 129, 130, 167 and 252), representing approximately 0.8% of the mortgage pool (1.1% of loan group 1) that are secured by medical office properties. The performance of a medical office property may depend on (i) the proximity of such property to a hospital or other health care establishment and (ii) reimbursements for patient fees from private or government-sponsored insurers. Issues related to reimbursements (ranging from non-payment to delays in payment) from such insurers could adversely impact cash flow at such mortgaged properties.
Although the 9 West 57th Street mortgage loan is not secured by the office building improving the mortgaged property, the borrower’s ability to make its debt service payments will be solely dependent on the ground lessee’s ability to make its obligations under the ground lease, which is in turn dependent on the underlying tenants occupying the office building meeting their obligations under their individual leases.
Special Risks Associated with Multifamily Properties
Multifamily properties secure, in whole or in part, 51 of the mortgage loans included in the trust fund as of the cut-off date, representing 29.0% of the mortgage pool (100% of loan group 2). See ‘‘RISK FACTORS — Special Risks of Mortgage Loans Secured by Multifamily Properties’’ in the accompanying prospectus.
Special Risks Associated with Retail Properties
Retail properties, including shopping centers, secure, in whole or in part, 73 of the mortgage loans included in the trust fund as of the cut-off date, representing 11.3% of the mortgage pool (16.0% of loan group 1). See ‘‘RISK FACTORS—Special Risks of Mortgage Loans Secured by Retail Properties’’ and ‘‘Special Risks Associated with Shopping Center and Other Retail Properties’’ in the accompanying prospectus.
Special Risks Associated with Industrial and Mixed-Use Facilities
Industrial properties secure, in whole or in part, 21 of the mortgage loans included in the trust fund as of the cut-off date, representing 4.2% of the mortgage pool (5.9% of loan group 1).
Mixed-use properties secure 8 of the mortgage loans included in the trust fund as of the cut-off date, representing 4.3% of the mortgage pool (6.1% of loan group 1). See ‘‘RISK FACTORS — Special Risks of Mortgage Loans Secured by Industrial and Mixed-Use Facilities’’ in the accompanying prospectus.
Mixed use mortgaged properties consist of either (i) office and retail components, (ii) retail and multifamily components, (iii) multifamily and office components, (iv) parking garage, retail and office components and (v) office and industrial components, and as such, mortgage loans secured by mixed use properties will share the risks associated with such underlying components. See ‘‘—Special Risks Associated with Office Properties’’, ‘‘—Special Risks Associated with Multifamily Properties’’ and ‘‘—Special Risks Associated with Retail Properties’’ in this prospectus supplement and ‘‘RISK FACTORS—Special Risks of Mortgage Loans Secured by Office Properties’’, ‘‘—Special Risks of Mortgage Loans Secured by Retail Properties’’, ‘‘—Special Risks of Mortgage Loans Secured by Multifamily Properties’’ and ‘‘—Special Risks of Mortgage Loans Secured by Industrial and Mixed Use Facilities’’ in the accompanying prospectus.
Special Risks Associated with Hospitality Properties
Hospitality properties secure, in whole or in part, 18 of the mortgage loans included in the trust fund as of the cut-off date, representing 5.2% of the mortgage pool (7.3% of loan group 1). See ‘‘RISK
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FACTORS—Special Risks of Mortgage Loans Secured by Hospitality Properties’’ in the accompanying prospectus. Certain mortgage loans included in the trust fund is secured by hospitality properties that are not affiliated with a hotel chain. The lack of a franchise affiliation, or of a nationally known franchise affiliation, may adversely affect the performance of a hotel property.
With respect to mortgage loans included in the trust fund that are secured by hospitality properties that are affiliated with a hotel chain by means of management agreements or franchise or licensing agreements, such agreements generally impose affirmative obligations on the owners, franchisees or licensees with respect to hotel operations. If the owner, franchisee or licensee does not comply with such obligations, it may lose its management agreement, franchise or license. Any provision in a franchise agreement or management agreement providing for termination because of a bankruptcy of a franchisor or manager generally will not be enforceable. Replacement franchise licenses may require significantly higher fees.
The transferability of franchise license agreements is restricted. In the event of a foreclosure, the mortgagee or its agent would not have the right to use the franchise license without the franchisor’s consent. Conversely, in the case of certain mortgage loans, the mortgagee may be unable to terminate a franchise license or remove a hotel management company that it desires to replace following a foreclosure.
Furthermore, the ability of a hotel to attract customers, and some of such hotel’s revenues, may depend in large part on its having a liquor license. Such a license may have restrictions or prohibitions on transfers to third parties, including, for example, in connection with a foreclosure.
Moreover, the hotel and lodging industry is generally seasonal in nature; different seasons affect different hotels depending on type and location. This seasonality can be expected to cause periodic fluctuations in a hospitality property’s room and restaurant revenues, occupancy levels, room rates and operating expenses.
Special Risks Associated with Self Storage Facilities
Self storage facilities secure, in whole or in part, 13 of the mortgage loans included in the trust fund as of the cut-off date, representing 1.8% of the mortgage pool (2.5% of loan group 1). See ‘‘RISK FACTORS—Special Risks of Mortgage Loans Secured by Warehouse and Self Storage Facilities’’ in the accompanying prospectus.
In addition, it is difficult to assess the environmental risks posed by such facilities due to tenant privacy, anonymity and unsupervised access to such facilities. Therefore, such facilities may pose additional environmental risks to investors. The environmental site assessments discussed in this prospectus supplement did not include an inspection of the contents of the self storage units included in the self storage properties. We therefore cannot provide assurance that all of the units included in the self storage properties are free from hazardous substances or other pollutants or contaminants or will remain so in the future. See ‘‘—Environmental Laws May Adversely Affect the Value of and Cash Flow from a Mortgaged Property’’ below.
Special Risks Associated with Parking Facilities
A substantial portion of the improvements at the mortgaged property securing the One Congress Street mortgage loan (loan number 7), which represents security for 2.4% (3.4% of loan group 1) of the Cut-off Date balance of the mortgage pool, consists of an above-ground parking garage, and a substantial portion of the cash flow at the One Congress Street mortgaged property is derived from the operation of that parking garage. See the description of the One Congress Street mortgage loan in Annex D to this prospectus supplement. Accordingly, the ability of the related mortgaged property to generate sufficient cash flow to enable the related borrower to pay debt service on the related mortgage loan and the value of the One Congress Street mortgaged property, will depend to a substantial degree on the performance of that parking garage. Parking garages entail special risks. Parking garages are sensitive to competition not only from other parking garages and parking facilities in the relevant area (on the basis of price and location, among other factors) but also from other transportation alternatives (such as buses, taxis,
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subways, rail service, private van and car services) that may be available to potential customers as an alternative to driving their own private vehicles to their destination. The performance of a parking garage is also likely to be influenced by the extent to which the surrounding area draws potential customers for other purposes (work, shopping and dining, for example). In addition, if the operation of the garage generates cash flow that is insufficient to pay debt service on the related mortgage loan or otherwise becomes unprofitable for any reason, the nature and types of possible alternative uses would be limited by the physical characteristics of the structure and conversion to any alternative uses that are possible would generally require substantial capital expenditures. Consequently, the liquidation value of the parking garage would likely be substantially less, relative to the amount owing on the related mortgage loan, than would be the case if the parking garage were readily adaptable to other uses. In addition, because spaces in parking garages are generally rented on a daily or monthly basis or other short-term periods, parking garage properties are generally more sensitive to adverse changes in economic conditions and any increased competition than many other commercial properties. For example, increases in gasoline prices might cause individuals who frequently drive to their destinations to instead use public transportation to reach those destinations.
Environmental Laws May Adversely Affect the Value of and Cash Flow from a Mortgaged Property
If an adverse environmental condition exists with respect to a mortgaged property securing a mortgage loan included in the trust fund, the trust fund may be subject to certain risks including the following:
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• | a reduction in the value of such mortgaged property which may make it impractical or imprudent to foreclose against such mortgaged property; |
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• | the potential that the related borrower may default on the related mortgage loan due to such borrower’s inability to pay high remediation costs or costs of defending lawsuits due to an environmental impairment or difficulty in bringing its operations into compliance with environmental laws; |
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• | liability for clean-up costs or other remedial actions, which could exceed the value of such mortgaged property or the unpaid balance of the related mortgage loan; and |
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• | the inability to sell the related mortgage loan in the secondary market or to lease such mortgaged property to potential tenants. |
Under certain federal, state and local laws, federal, state and local agencies may impose a statutory lien over affected property to secure the reimbursement of remedial costs incurred by these agencies to correct adverse environmental conditions. This lien may be superior to the lien of an existing mortgage. Any such lien arising with respect to a mortgaged property securing a mortgage loan included in the trust fund would adversely affect the value of such mortgaged property and could make impracticable the foreclosure by the special servicer on such mortgaged property in the event of a default by the related borrower.
Under various federal, state and local laws, ordinances and regulations, a current or previous owner or operator of real property, as well as certain other types of parties, may be liable for the costs of investigation, removal or remediation of hazardous or toxic substances on, under, adjacent to or in such property. The cost of any required investigation, delineation and/or remediation and the owner’s liability is generally not limited under applicable laws. Such liability could exceed the value of the property and/or the aggregate assets of the owner. Under some environmental laws, a secured lender (such as the trust fund) may be found to be an ‘‘owner’’ or ‘‘operator’’ of the related mortgaged property if it is determined that such secured lender actually participated in the hazardous waste management of the borrower, regardless of whether the borrower actually caused the environmental damage. In such cases, a secured lender may be liable for the costs of any required investigation, removal or remediation of hazardous substances. The trust fund’s potential exposure to liability for environmental costs will increase if the trust fund, or an agent of the trust fund, actually takes possession of a mortgaged property or control of its day-to-day operations. See ‘‘DESCRIPTION OF THE MORTGAGE POOL—Assessments of Property Condition—Environmental Assessments’’ in this prospectus supplement, and ‘‘CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS AND LEASES—Environmental Considerations’’ in the accompanying prospectus.
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A third-party environmental consultant conducted an environmental site assessment (or updated a previously conducted environmental site assessment) with respect to each mortgaged property securing a mortgage loan included in the trust fund related to a particular series of certificates. Such assessments do not generally include invasive environmental testing. In each case where the environmental site assessment or update revealed a material adverse environmental condition or circumstance at any mortgaged property, then (depending on the nature of the condition or circumstance) one or more of the following actions has been or is expected to be taken:
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• | an environmental consultant investigated those conditions and recommended no further investigations or remediation; |
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• | an environmental insurance policy was obtained from a third-party insurer; |
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• | either (i) an operations and maintenance program, including, in several cases, with respect to asbestos containing materials, lead-based paint, microbial matter and/or radon, or periodic monitoring of nearby properties, has been or is expected to be implemented in the manner and within the time frames specified in the related loan documents, or (ii) remediation in accordance with applicable law or regulations has been performed, is currently being performed or is expected to be performed either by the borrower or by the party responsible for the contamination; |
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• | an escrow or reserve was established to cover the estimated cost of remediation, with each remediation required to be completed within a reasonable time frame in accordance with the related mortgage loan documents; or |
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• | the related borrower or other responsible party having financial resources reasonably estimated to be adequate address the related condition or circumstance is required to take (or is liable for the failure to take) actions, if any, with respect to those circumstances or conditions that have been required by the applicable governmental regulatory authority or any environmental law or regulation. |
We cannot provide assurance, however, that the environmental assessments identified all environmental conditions and risks, that the related borrowers will implement all recommended operations and maintenance plans, that such plans will adequately remediate the environmental condition, or that any environmental indemnity, insurance or escrow will fully cover all potential environmental conditions and risks. In addition, the environmental condition of the underlying real properties could be adversely affected by tenants or by the condition of land or operations in the vicinity of the properties, such as underground storage tanks.
With respect to 1 mortgage loan (loan number 1), representing 19.0% of the mortgage pool (65.5% of loan group 2), the Phase I environmental assessment conducted with respect to the related mortgaged property noted that Consolidated Edison of New York, Inc. had owned and operated Manufactured Gas Plant facilities (primarily gas holder stations) at the related mortgaged property from 1853 through 1944 and that investigations conducted by Consolidated Edison of New York, Inc. from 2003 through 2006 pursuant to a Voluntary Cleanup Agreement it entered into in 2002 with the New York State Department of Environmental Conservation and also by the previous property owner found soil and groundwater contamination at certain of the previous Manufactured Gas Plant sites marked by concentrations of some volatile organic compounds and semi-volatile organic compounds, arsenic, lead and cyanide above the acceptable levels set by the New York State Department of Environmental Conservation. Some studies also reveal possible impact on air quality at the related mortgaged property. Consolidated Edison of New York, Inc. is the responsible party identified by the United States Environmental Protection Agency and the New York State Department of Environmental Conservation with respect to such contamination, and under the Voluntary Cleanup Agreement, Consolidated Edison of New York, Inc. has agreed to fund the investigation and, if necessary, the remediation of Manufactured Gas Plant-related environmental impacts at the former gas holder locations at the mortgaged property. A remedial action plan is expected in mid to late 2007. The related borrowers, nonetheless, have procured Environmental Impairment Liability insurance in an amount of not less than $50 million with the related mortgagee named as insureds under the policy. In addition, the Phase I assessment noted that a previous Phase I assessment had identified the
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presence of chlorinated solvents above the New York State Department of Environmental Conservation standards in the groundwater near the location of a dry cleaning facility at the related mortgaged property. According to the Phase I assessment, however, any proposed groundwater remediation systems installed at the related mortgaged property to address the contamination from the prior site usage by Consolidated Edison of New York, Inc. would also likely capture groundwater contamination from the dry cleaning facility, and thus no other specific action would be required.
Problems associated with mold, fungi or decay may pose risks to the mortgaged properties that are part of the trust fund and may also be the basis for personal injury claims against a borrower. Although the mortgaged properties are required to be inspected periodically, there is no generally accepted standard for the assessment of mold, fungi or decay problems. If left unchecked, the growth of such problems could result in the interruption of cash flow, litigation and remediation expenses that could adversely impact collections from a mortgaged property.
We cannot provide assurance, however, that should environmental insurance coverage be needed, such coverage would be available or uncontested, that the terms and conditions of such coverage would be met, that coverage would be sufficient for the claims at issue or that coverage would not be subject to certain deductibles.
The pooling and servicing agreement will require that the special servicer obtain an environmental site assessment of a mortgaged property securing a mortgage loan included in the trust fund prior to taking possession of the property through foreclosure or otherwise assuming control of its operation. Such requirement effectively precludes enforcement of the security for the related mortgage note until a satisfactory environmental site assessment is obtained (or until any required remedial action is thereafter taken), but will decrease the likelihood that the trust fund will become liable for a material adverse environmental condition at the mortgaged property. However, we cannot give assurance that the requirements of the pooling and servicing agreement will effectively insulate the trust fund from potential liability for a materially adverse environmental condition at any mortgaged property. See ‘‘DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS—Realization Upon Defaulted Mortgage Loans’’, ‘‘RISK FACTORS—Environmental Liability May Affect the Lien on a Mortgaged Property and Expose the Lender to Costs’’ and ‘‘CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS AND LEASES—Environmental Considerations’’ in the accompanying prospectus.
Special Risks Associated with Balloon Loans and Anticipated Repayment Date Loans
Two hundred and sixty-one (261) of the mortgage loans, representing 99.9% of the mortgage pool (210 mortgage loans in loan group 1 or 99.9% and 51 mortgage loans in loan group 2 or 100%), provide for scheduled payments of principal and/or interest based on amortization schedules significantly longer than their respective remaining terms to maturity or provide for payments of interest only until their respective maturity date and, in each case, a balloon payment on their respective maturity date. Eighteen (18) of these mortgage loans, representing 1.8% of the mortgage pool (15 mortgage loans in loan group 1 or 1.5% and 3 mortgage loans in loan group 2 or 2.5%), are anticipated repayment date loans, which provide that if the principal balance of the loan is not repaid on a date specified in the related mortgage note, the loan will accrue interest at an increased rate.
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• | A borrower’s ability to make a balloon payment or repay its anticipated repayment date loan on the anticipated repayment date typically will depend upon its ability either to refinance fully the loan or to sell the related mortgaged property at a price sufficient to permit the borrower to make such payment. |
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• | Whether or not losses are ultimately sustained, any delay in the collection of a balloon payment on the maturity date or repayment on the anticipated repayment date that would otherwise be distributable on your certificates will likely extend the weighted average life of your certificates. |
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• | The ability of a borrower to effect a refinancing or sale will be affected by a number of factors, including (but not limited to) the value of the related mortgaged property, the level of available mortgage rates at the time of sale or refinancing, the borrower’s equity in the mortgaged |
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property, the financial condition and operating history of the borrower and the mortgaged property, rent rolling status, rent control laws with respect to certain residential properties, tax laws, prevailing general and regional economic conditions and the availability of credit for loans secured by multifamily or commercial properties, as the case may be. |
We cannot assure you that each borrower under a balloon loan or an anticipated repayment date loan will have the ability to repay the principal balance of such mortgage loan on the related maturity date or anticipated repayment date, as applicable. Generally, even fully amortizing mortgage loans which pay interest on an ‘‘actual/360’’ basis but have fixed monthly payments may, in fact, have a small ‘‘balloon payment’’ due at maturity. For additional description of risks associated with balloon loans, see ‘‘RISK FACTORS—Balloon Payments on Mortgage Loans Result in Heightened Risk of Borrower Default’’ in the accompanying prospectus.
In order to maximize recoveries on defaulted mortgage loans, the pooling and servicing agreement permits the special servicer to extend and modify mortgage loans that are in material default or as to which a payment default (including the failure to make a balloon payment) is imminent; subject, however, to the limitations described under ‘‘SERVICING OF THE MORTGAGE LOANS—Modifications, Waivers and Amendments’’ in this prospectus supplement. We cannot provide assurance, however, that any such extension or modification will increase the present value of recoveries in a given case. Any delay in collection of a balloon payment that would otherwise be distributable on your certificates, whether such delay is due to borrower default or to modification of the related mortgage loan, will likely extend the weighted average life of your certificates. See ‘‘YIELD AND MATURITY CONSIDERATIONS’’ in this prospectus supplement and ‘‘YIELD CONSIDERATIONS’’ in the accompanying prospectus.
Adverse Consequences Associated with Borrower Concentration, Borrowers under Common Control and Related Borrowers
Certain borrowers under the mortgage loans included in the trust fund are affiliated or under common control with one another. In such circumstances, any adverse circumstances relating to a borrower or an affiliate thereof and affecting one of the related mortgage loans or mortgaged properties could also affect other mortgage loans or mortgaged properties of the related borrower. In particular, the bankruptcy or insolvency of any such borrower or affiliate could have an adverse effect on the operation of all of the mortgaged properties of that borrower and its affiliates and on the ability of such related mortgaged properties to produce sufficient cash flow to make required payments on the mortgage loans. For example, if a person that owns or directly or indirectly controls several mortgaged properties experiences financial difficulty at one mortgaged property, they could defer maintenance at one or more other mortgaged properties in order to satisfy current expenses with respect to the mortgaged property experiencing financial difficulty, or they could attempt to avert foreclosure by filing a bankruptcy petition that might have the effect of interrupting payments for an indefinite period on all the related mortgage loans. In particular, such person experiencing financial difficulty or becoming subject to a bankruptcy proceeding may have an adverse effect on the funds available to make distributions on the certificates and may lead to a downgrade, withdrawal or qualification (if applicable) of the ratings of the certificates.
Mortgaged properties owned by related borrowers are likely to:
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• | have common management, increasing the risk that financial or other difficulties experienced by the property manager could have a greater impact on the pool of mortgage loans included in the trust fund; and |
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• | have common general partners or managing members which would increase the risk that a financial failure or bankruptcy filing would have a greater impact on the pool of mortgage loans included in the trust fund. |
For example, 7 groups of mortgage loans consisting of (a) 3 cross-collateralized and cross-defaulted mortgage loans ((loan numbers 63, 163 and 166), representing in the aggregate 0.5% of the mortgage pool (0.7% of loan group 1)), (b) 2 cross-collateralized and cross-defaulted mortgage loans ((loan numbers 66 and 108), representing in the aggregate 0.4% of the mortgage pool (0.6% of loan group 1)), (c) 7 cross-collateralized and cross-defaulted mortgage loans (loan numbers 116, 173, 197, 230, 241, 255 and
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257), representing in the aggregate 0.4% of the mortgage pool (0.6% of loan group 1)), (d) 2 cross-collateralized and cross-defaulted mortgage loans ((loan numbers 134 and 191), representing in the aggregate 0.2% of the mortgage pool (0.2% of loan group 1)), (e) 2 cross-collateralized and cross-defaulted mortgage loans (loan numbers 161 and 184), representing in the aggregate 0.2% of the mortgage pool (0.2% of loan group 1)), (f) 2 cross-collateralized and cross-defaulted mortgage loans ((loan numbers 180 and 219), representing in the aggregate 0.1% of the mortgage pool (0.2% of loan group 1)) and (g) 3 cross-collateralized and cross-defaulted mortgage loans ((loan numbers 226, 248 and 258), representing in the aggregate 0.1% of the mortgage pool (0.1% of loan group 1)), respectively, have sponsors that are affiliated. Although the mortgage loans within each group are cross-collateralized and cross-defaulted, the groups of mortgage loans are not cross-collateralized or cross-defaulted with each other.
In addition, 2 mortgage loans (loan numbers 8 and 68), representing 2.6% of the mortgage pool (3.7% of loan group 1), are not cross-collateralized or cross-defaulted but the sponsors of two or more of the related borrowers under two or more of such mortgage loans are affiliated.
No group, individual borrower, sponsor or borrower concentration represents more than 19.0% of the mortgage pool (65.5% of loan group 2).
The Geographic Concentration of Mortgaged Properties Subjects the Trust Fund to a Greater Extent to State and Regional Conditions
Except as indicated in the following tables, less than 5.0% of the mortgage loans, by cut-off date pool or loan group balance, are secured by mortgaged properties in any one state and the District of Columbia.
Mortgaged Properties by Geographic Concentration(1)
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State | ![]() | ![]() | Number of Mortgaged Properties | ![]() | ![]() | Aggregate Cut-Off Date Balance | ![]() | ![]() | Percentage of Cut-Off Date Pool Balance | |||||||||
NY | ![]() | ![]() | ![]() | ![]() | 19 | ![]() | ![]() | ![]() | ![]() | ![]() | $3,215,543,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 40.7 | % |
CA | ![]() | ![]() | ![]() | ![]() | 38 | ![]() | ![]() | ![]() | ![]() | ![]() | 821,461,405 | ![]() | ![]() | ![]() | ![]() | ![]() | 10.4 | ![]() |
CA - Southern(2) | ![]() | ![]() | ![]() | ![]() | 31 | ![]() | ![]() | ![]() | ![]() | ![]() | 743,251,405 | ![]() | ![]() | ![]() | ![]() | ![]() | 9.4 | ![]() |
CA - Northern(2) | ![]() | ![]() | ![]() | ![]() | 7 | ![]() | ![]() | ![]() | ![]() | ![]() | 78,210,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.0 | ![]() |
MA | ![]() | ![]() | ![]() | ![]() | 10 | ![]() | ![]() | ![]() | ![]() | ![]() | 655,704,758 | ![]() | ![]() | ![]() | ![]() | ![]() | 8.3 | ![]() |
TX | ![]() | ![]() | ![]() | ![]() | 40 | ![]() | ![]() | ![]() | ![]() | ![]() | 521,860,500 | ![]() | ![]() | ![]() | ![]() | ![]() | 6.6 | ![]() |
Other | ![]() | ![]() | ![]() | ![]() | 221 | ![]() | ![]() | ![]() | ![]() | ![]() | 2,688,929,074 | ![]() | ![]() | ![]() | ![]() | ![]() | 34.0 | ![]() |
![]() | ![]() | ![]() | ![]() | 328 | ![]() | ![]() | ![]() | ![]() | ![]() | $7,903,498,737 | ![]() | ![]() | ![]() | ![]() | ![]() | 100.0 | % | |
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(1) | Because this table presents information relating to the mortgaged properties and not the mortgage loans, the information for mortgage loans secured by more than one mortgaged property is based on allocated loan amounts (allocating the mortgage loan principal balance to each of those properties by the appraised values of the mortgaged properties or the allocated loan amount (or specific release prices) as described in the related mortgage loan documents). |
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(2) | For purposes of determining whether a mortgaged property is located in Northern California or Southern California, mortgaged properties located north of San Luis Obispo County, Kern County and San Bernardino County were included in Northern California and mortgaged properties located in and south of such counties were included in Southern California. |
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Loan Group 1
Mortgaged Properties by Geographic Concentration(1)
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State | ![]() | ![]() | Number of Mortgaged Properties | ![]() | ![]() | Aggregate Cut-Off Date Balance | ![]() | ![]() | Percentage of Cut-Off Date Group 1 Balance | |||||||||
NY | ![]() | ![]() | ![]() | ![]() | 16 | ![]() | ![]() | ![]() | ![]() | ![]() | $1,704,343,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 30.4 | % |
CA | ![]() | ![]() | ![]() | ![]() | 30 | ![]() | ![]() | ![]() | ![]() | ![]() | 639,761,405 | ![]() | ![]() | ![]() | ![]() | ![]() | 11.4 | ![]() |
CA - Southern(2) | ![]() | ![]() | ![]() | ![]() | 24 | ![]() | ![]() | ![]() | ![]() | ![]() | 565,551,405 | ![]() | ![]() | ![]() | ![]() | ![]() | 10.1 | ![]() |
CA - Northern(2) | ![]() | ![]() | ![]() | ![]() | 6 | ![]() | ![]() | ![]() | ![]() | ![]() | 74,210,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.3 | ![]() |
MA | ![]() | ![]() | ![]() | ![]() | 7 | ![]() | ![]() | ![]() | ![]() | ![]() | 637,710,218 | ![]() | ![]() | ![]() | ![]() | ![]() | 11.4 | ![]() |
TX | ![]() | ![]() | ![]() | ![]() | 31 | ![]() | ![]() | ![]() | ![]() | ![]() | 397,496,288 | ![]() | ![]() | ![]() | ![]() | ![]() | 7.1 | ![]() |
IL | ![]() | ![]() | ![]() | ![]() | 2 | ![]() | ![]() | ![]() | ![]() | ![]() | 283,650,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.1 | ![]() |
Other | ![]() | ![]() | ![]() | ![]() | 188 | ![]() | ![]() | ![]() | ![]() | ![]() | 1,950,858,201 | ![]() | ![]() | ![]() | ![]() | ![]() | 34.8 | ![]() |
![]() | ![]() | ![]() | ![]() | 274 | ![]() | ![]() | ![]() | ![]() | ![]() | $5,613,819,111 | ![]() | ![]() | ![]() | ![]() | ![]() | 100.0 | % | |
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(1) | Because this table presents information relating to the mortgaged properties and not the mortgage loans, the information for mortgage loans secured by more than one mortgaged property is based on allocated loan amounts (allocating the mortgage loan principal balance to each of those properties by the appraised values of the mortgaged properties or the allocated loan amount (or specific release prices) as described in the related mortgage loan documents). |
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(2) | For purposes of determining whether a mortgaged property is located in Northern California or Southern California, mortgaged properties located north of San Luis Obispo County, Kern County and San Bernardino County were included in Northern California and mortgaged properties located in and south of such counties were included in Southern California. |
Loan Group 2
Mortgaged Properties by Geographic Concentration(1)
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State | ![]() | ![]() | Number of Mortgaged Properties | ![]() | ![]() | Aggregate Cut-Off Date Balance | ![]() | ![]() | Percentage of Cut-Off Date Group 2 Balance | |||||||||
NY | ![]() | ![]() | ![]() | ![]() | 3 | ![]() | ![]() | ![]() | ![]() | ![]() | $1,511,200,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 66.0 | % |
CA | ![]() | ![]() | ![]() | ![]() | 8 | ![]() | ![]() | ![]() | ![]() | ![]() | 181,700,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 7.9 | ![]() |
CA - Southern(2) | ![]() | ![]() | ![]() | ![]() | 7 | ![]() | ![]() | ![]() | ![]() | ![]() | 177,700,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 7.8 | ![]() |
CA - Northern(2) | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 4,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.2 | ![]() |
TX | ![]() | ![]() | ![]() | ![]() | 9 | ![]() | ![]() | ![]() | ![]() | ![]() | 124,364,213 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.4 | ![]() |
Other | ![]() | ![]() | ![]() | ![]() | 34 | ![]() | ![]() | ![]() | ![]() | ![]() | 472,415,413 | ![]() | ![]() | ![]() | ![]() | ![]() | 20.6 | ![]() |
![]() | ![]() | ![]() | ![]() | 54 | ![]() | ![]() | ![]() | ![]() | ![]() | $2,289,679,626 | ![]() | ![]() | ![]() | ![]() | ![]() | 100.0 | % | |
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(1) | Because this table presents information relating to the mortgaged properties and not the mortgage loans, the information for mortgage loans secured by more than one mortgaged property is based on allocated loan amounts (allocating the mortgage loan principal balance to each of those properties by the appraised values of the mortgaged properties or the allocated loan amount (or specific release prices) as described in the related mortgage loan documents). |
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(2) | For purposes of determining whether a mortgaged property is located in Northern California or Southern California, mortgaged properties located north of San Luis Obispo County, Kern County and San Bernardino County were included in Northern California and mortgaged properties located in and south of such counties were included in Southern California. |
The concentration of mortgaged properties in a specific state or region will make the performance of the trust fund as a whole more sensitive to the following in the state or region where the mortgagors and the mortgaged properties are located:
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• | economic conditions; |
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• | conditions in the real estate market; |
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• | changes in governmental rules and fiscal policies; |
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• | acts of God or terrorism (which may result in uninsured losses); and |
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• | other factors which are beyond the control of the mortgagors. |
For example, 19 of the mortgaged properties, representing 40.7% of the mortgage pool (16 mortgaged properties in loan group 1 or 30.4% and 3 mortgaged properties in loan group 2 or 66.0%) are located in
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New York. As a result of this concentration, any adverse economic impact on the New York area may have a more pronounced effect on certificateholders as compared with a similar economic impact on other geographical areas.
In addition, 38 of the mortgaged properties, representing, by allocated loan amount, approximately 10.4% of the mortgage pool (30 mortgaged properties in loan group 1 or 11.4% and 8 mortgaged properties in loan group 2 or 7.9%), are located in the state of California. Thirty-one (31) of these mortgaged properties, representing, by allocated loan amount, approximately 9.4% of the mortgage pool (24 mortgaged properties in loan group 1 or 10.1% and 7 mortgaged properties in loan group 2 or 7.8%), are located in southern California. During the past several years, California’s economy has benefited from a continued rise in residential home prices, increased investment in technology and software equipment and a strong office leasing market. There can be no assurances, however, that such economic growth will continue. Additionally, rising energy prices, increasing consumer debt and decreasing prices of residential homes could slow the growth of the southern California economy. Further, a weakening of the southern California office leasing market in particular, may adversely affect the related mortgaged properties’ operation and could lessen their market value. Conversely, a strong market could lead to increased building and increased competition for tenants. In either case, there could be an adverse effect on the operation of the mortgage loans and consequently the amount and timing of distributions on the certificates.
Special Risks Associated with High Balance Mortgage Loans
Several of the mortgage loans included in the trust fund, individually or together with other such mortgage loans with which they are cross-collateralized, have principal balances as of the cut-off date that are substantially higher than the average principal balance of the mortgage loans in the trust fund as of the cut-off date.
In general, concentrations in a mortgage pool of loans with larger-than-average balances can result in losses that are more severe, relative to the size of the pool, than would be the case if the aggregate balance of the pool were more evenly distributed.
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• | The largest single mortgage loan included in the trust fund as of the cut-off date represents 19.0% of the mortgage pool (65.5% of loan group 2). |
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• | The largest group of cross-collateralized mortgage loans included in the trust fund as of the cut-off date represents in the aggregate 0.5% of the mortgage pool (0.7% of loan group 1). |
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• | The 2 largest mortgage loans or groups of cross-collateralized mortgage loans included in the trust fund as of the cut-off date represent in the aggregate 25.8% of the mortgage pool (1 mortgage loan in loan group 1 or 9.5% and 1 mortgage loan in loan group 2 or 65.5%). |
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• | The 5 largest mortgage loans or groups of cross-collateralized mortgage loans included in the trust fund as of the cut-off date represent, in the aggregate, 40.1% of the mortgage pool (4 mortgage loans in loan group 1 or 29.7% and 1 mortgage loan in loan group 2 or 65.5%). |
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• | The 10 largest mortgage loans or groups of cross-collateralized mortgage loans included in the trust fund as of the cut-off date represent, in the aggregate, 51.9% of the mortgage pool (9 mortgage loans in loan group 1 or 46.4% and 1 mortgage loan in loan group 2 or 65.5%). |
Concentrations of Mortgaged Property Types Subject the Trust Fund to Increased Risk of Decline in Particular Industries
A concentration of mortgaged property types can increase the risk that a decline in a particular industry or business would have a disproportionately large impact on a pool of mortgage loans. For example, if there is a decline in tourism, the hotel industry might be adversely affected, leading to increased losses on loans secured by hospitality properties as compared to the mortgage loans secured by other property types.
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In that regard, by allocated loan amount:
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• | mortgage loans included in the trust fund and secured by office properties represent, as of the cut-off date, 43.0% of the mortgage pool (60.5% of loan group 1); |
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• | mortgage loans included in the trust fund and secured by multifamily properties represent, as of the cut-off date, 29.0% of the mortgage pool (100% of loan group 2); |
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• | mortgage loans included in the trust fund and secured by retail properties represent, as of the cut-off date, 11.3% of the mortgage pool (16.0% of loan group 1); |
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• | mortgage loans included in the trust fund and secured by industrial and mixed-use facilities represent, as of the cut-off date, 8.0% of the mortgage pool (11.3% of loan group 1); |
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• | mortgage loans included in the trust fund and secured by hospitality properties represent, as of the cut-off date, 5.2% of the mortgage pool (7.3% of loan group 1); |
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• | mortgage loans included in the trust fund and secured by mobile home park properties represent, as of the cut-off date, 0.0% of the mortgage pool (0.1% of loan group 1); and |
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• | mortgage loans included in the trust fund and secured by self storage facilities represent, as of the cut-off date, 1.8% of the mortgage pool (2.5% of loan group 1). |
Insurance Coverage on Mortgaged Properties May Not Cover Special Hazard Losses
In light of the September 11, 2001 terrorist attacks in New York City, the Washington, D.C. area and Pennsylvania, the comprehensive general liability and business interruption or rent loss insurance policies required by typical mortgage loans (which are generally subject to periodic renewals during the term of the related mortgage loans) have been affected. To give time for private markets to develop a pricing mechanism and to build capacity to absorb future losses that may occur due to terrorism, on November 26, 2002 the Terrorism Risk Insurance Act of 2002 was enacted, which established the Terrorism Insurance Program. Under the Terrorism Insurance Program, the federal government shares in the risk of loss associated with certain future terrorist acts. See ‘‘RISK FACTORS—Insurance Coverage on Mortgaged Properties May Not Cover Special Hazard Losses’’ in the accompanying prospectus.
The Terrorism Insurance Program was originally scheduled to expire on December 31, 2005. However, on December 22, 2005, the Terrorism Risk Insurance Extension Act of 2005 was enacted, which extended the duration of the Terrorism Insurance Program until December 31, 2007.
The Terrorism Insurance Program is administered by the Secretary of the Treasury and, through December 31, 2007, will provide some financial assistance from the United States government to insurers in the event of another terrorist attack that results in an insurance claim. The program applies to United States risks only and to acts that are committed by an individual or individuals acting on behalf of a foreign person or foreign interest as an effort to influence or coerce United States civilians or the United States government.
In addition, with respect to any act of terrorism occurring after March 31, 2006, no compensation is paid under the Terrorism Insurance Program unless the aggregate industry losses relating to such act of terror exceed $50 million (or, if such insured losses occur in 2007, $100 million). As a result, unless the borrowers obtain separate coverage for events that do not meet that threshold (which coverage may not be required by the respective loan documents and may not otherwise be obtainable), such events would not be covered.
The Treasury Department has established procedures for the program under which the federal share of compensation equals 90 percent (or, in 2007, 85 percent) of that portion of insured losses that exceeds an applicable insurer deductible required to be paid during each program year. The federal share in the aggregate in any program year may not exceed $100 billion (and the insurers will not be liable for any amount that exceeds this cap).
Through December 2007, insurance carriers are required under the program to provide terrorism coverage in their basic ‘‘all-risk’’ policies. Any commercial property and casualty terrorism insurance
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exclusion that was in force on November 26, 2002 is automatically voided to the extent that it excludes losses that would otherwise be insured losses. Any state approval of such types of exclusions in force on November 26, 2002, is also voided.
The Terrorism Insurance Program is temporary legislation and there can be no assurance that it will create any long-term changes in the availability and cost of such insurance. Moreover, there can be no assurance that subsequent terrorism insurance legislation will be passed upon its expiration.
No assurance can be given that the mortgaged properties will continue to have the benefit of insurance against terrorist acts. In addition, no assurance can be given that the coverage for such acts, if obtained or maintained, will be broad enough to cover the particular act of terrorism that may be committed or that the amount of coverage will be sufficient to repair and restore the mortgaged property or to repay the mortgage loan in full. The insufficiency of insurance coverage in any respect could have a material and adverse affect on an investor’s certificates.
Pursuant to the terms of the pooling and servicing agreement, the master servicer or the special servicer may not be required to maintain insurance covering terrorist or similar acts, nor will it be required to call a default under a mortgage loan, if the related borrower fails to maintain such insurance (even if required to do so under the related mortgage loan documents) if the special servicer has determined, in consultation with the controlling class representative, in accordance with the servicing standard that either:
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• | such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the mortgaged property and located in or around the region in which such mortgaged property is located; or |
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• | such insurance is not available at any rate. |
In addition, with respect to certain mortgage loans, the mortgagee may have waived the right to require terrorism insurance or may have limited the circumstances under which terrorism insurance is required. For example, terrorism insurance is generally required only with respect to ‘‘certified acts of terrorism’’, as defined under the Terrorism Insurance Act of 2002. Further, such insurance may be required only to the extent it can be obtained for premiums less than or equal to a ‘‘cap’’ amount specified in the related mortgage loan documents, only if it can be purchased at commercially reasonable rates and/or only with a deductible at a certain threshold. There can be no assurances that the terrorism insurance maintained at these mortgaged properties, or the other mortgaged properties in the mortgage pool, will be sufficient to offset any potential losses in the event of damages due to a terrorist act.
For example, with respect to 1 mortgage loan (loan number 4), representing approximately 4.9% of the mortgage pool (6.9% of loan group 1), the related borrower is required to obtain an endorsement to its ‘‘all-risk’’ policy, or a separate policy insuring against all ‘‘certified acts of terrorism’’ as defined by TRIA and ‘‘fire following’’, each in an amount equal to 100% of the actual replacement value (exclusive of the premises, footings and foundations) with a waiver of depreciation. During any period that TRIA is not in effect, if ‘‘acts of terrorism’’ or other similar acts or events or ‘‘fire following’’ are excluded from the related borrower’s comprehensive all risk insurance policy or business interruption insurance coverge, the related borrower is required to obtain an endorsement to such policy, or a separate policy insuring against all such excluded acts or events, to the extent such policy or endorsement is available in an amount determined by lender but in no event greater than the total insurable value plus the required business interruption coverage amount; provided, however, the related borrower will not be required to pay annual premiums in excess of three times the premium in effect as of the origination of the State Street Financial Center mortgage loan for the required (i) comprehensive all risk insurance coverage, (ii) general liability insurance coverage and (iii) business interruption insurance coverage.
As an additional example, in the case of 1 mortgage loan (loan number 5), representing 4.0% of the mortgage pool (5.6% of loan group 1), the maximum amount of terrorism coverage the borrower is required to maintain is that which can be purchased for a premium equal to 150% of the premium cost of a stand-alone terrorism policy as of the origination date of the related mortgage loan.
In addition, certain of the mortgaged properties may contain pad sites that are ground leased to the related tenant(s). The related borrower may not be required to obtain insurance on the related improvements.
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Any losses incurred with respect to mortgage loans included in the trust fund due to uninsured risks or insufficient hazard insurance proceeds could adversely affect distributions on your certificates.
Additional Debt on Some Mortgage Loans Creates Additional Risks
In general, the borrowers are:
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• | required to satisfy any existing indebtedness encumbering the related mortgaged property as of the closing of the related mortgage loan; and |
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• | prohibited from encumbering the related mortgaged property with additional secured debt without the mortgagee’s prior approval. |
With respect to 1 mortgage loan (loan number 2), representing 6.8% of the mortgage pool (9.5% of loan group 1), the related borrower established a debt service reserve because, during the first 5 years of the term of the related mortgage loan, there is a projected shortfall in the cashflow needed to fully cover the debt service payments for the mortgage loan including its related subordinate companion loan. There can be no assurance that the debt services reserve will be sufficient to offset any actual shortfall.
Except as provided below, none of the mortgage loans included in the trust fund, other than the mortgage loans with companion loans, are secured by mortgaged properties that secure other loans outside the trust fund, and, except as provided below, none of the related entities with a controlling ownership interest in the borrower may pledge or has pledged its interest in that borrower as security for mezzanine debt.
With respect to 1 mortgage loan (loan number 1), representing approximately 19.0% of the mortgage pool (65.5% of loan group 2), the related borrower is permitted to obtain up to $300,000,000 of any combination of pari passu mortgage debt secured by a second mortgage on the related mortgaged property and/or subordinate mezzanine debt at any time between November 2011 and May 2013, subject to certain conditions, including, among other things, that such additional financing will not result in a debt service coverage ratio of less than 1.30x or loan-to-value ratio of greater than 70%, and the receipt of confirmation from each rating agency that such additional indebtedness will not cause a withdrawal, downgrade or qualification to any certificates. The related borrower will also be required to enter into an intercreditor agreement in the form set forth in the related mortgage loan documents, which does not entitle such new pari passu mortgage lender to any consultation or consent rights with respect to servicing of the related mortgage loan.
With respect to 11 mortgage loans (loan numbers 13, 19, 23, 42, 51, 60, 61, 70, 82, 88 and 117), representing 4.3% of the mortgage pool (6 mortgage loans in loan group 1 or 4.2% and 5 mortgage loans in loan group 2 or 4.4%), Wachovia Development Corporation, an affiliate of Wachovia Bank, National Association, has an equity interest in the related borrower. See ‘‘RISK FACTORS—Potential Conflicts of Interest’’ in this prospectus supplement.
With respect to 6 mortgage loans (loan numbers 25, 35, 49, 76, 109 and 131), representing approximately 2.0% of the mortgage pool (5 mortgage loans in loan group 1 or 2.6% and 1 mortgage loan in loan group 2 or 0.6%), the related borrower has encumbered the related mortgaged property with subordinate debt secured by the related mortgaged property.
With respect to 18 mortgage loans (loan numbers 1, 2, 9, 13, 18, 19, 23, 42, 46, 47, 51, 55, 60, 61, 70, 82, 88 and 117), representing approximately 34.2% of the mortgage pool (12 mortgage loans in loan group 1 or 19.6% and 6 mortgage loans in loan group 2 or 69.9%), the ownership interests of the direct or indirect owners of the related borrower have been pledged as security for mezzanine debt subject to the terms of an intercreditor agreement entered into in favor of the mortgagee.
With respect to 2 mortgage loans (loan numbers 207 and 256), representing approximately 0.1% of the mortgage pool (0.1% of loan group 1), the related borrower has incurred additional unsecured debt other than in the ordinary course of business and the related promissory notes contain subordination and standstill provisions or there is a separate subordination and standstill agreement. In the case of loan number 207, the related borrower incurred purchase money debt in the amount of $600,000 that is secured by rents from the mortgaged property, subject to a subordination agreement.
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With respect to 3 mortgage loans (loan numbers 59, 101 and 198), representing approximately 0.5% of the mortgage pool (2 mortgage loans in loan group 1 or 0.3% and 1 mortgage loan in loan group 2 or 1.1%), the related mortgage loan documents provide that under certain circumstances the related borrower may encumber the related mortgaged property with subordinate debt in the future.
With respect to 49 mortgage loans (loan numbers 8, 12, 14, 17, 19, 24, 25, 44, 46, 48, 49, 50, 54, 58, 61, 63, 71, 86, 92, 96, 103, 104, 107, 119, 124, 132, 133, 134, 138, 143, 148, 154, 156, 160, 163, 166, 168, 171, 174, 178, 179, 191, 193, 223, 225, 226, 240, 248 and 263), representing approximately 13.3% of the mortgage pool (36 mortgage loans in loan group 1 or 15.7% and 13 mortgage loans in loan group 2 or 7.7%), the related mortgage loan documents provide that, under certain circumstances (which may include satisfaction of debt service coverage ratio and loan-to-value tests) and in some cases with the consent of the mortgagee, ownership interests in the related borrowers may be pledged as security for mezzanine debt in the future, subject to the terms of a subordination and standstill agreement or intercreditor agreement to be entered into in favor of the mortgagee.
With respect to 4 mortgage loans (loan numbers 105, 114, 204 and 208), representing approximately 0.4% of the mortgage pool (0.6% of loan group 1), the related mortgage loan documents provide that, under certain circumstances, the related borrowers may incur additional unsecured debt (in addition to unsecured trade payables in customary amounts incurred in the ordinary course of business).
With respect to 1 mortgage loan (loan number 1), representing approximately 19.0% of the mortgage pool (65.5% of loan group 2), the related mortgage loan documents provide that, under certain circumstances, either (a) the related borrower may encumber the related Mortgaged Property with additional pari passu debt in the future, or (b) the entity owning an interest in the related borrower may pledge their interests in the borrower as security for mezzanine debt in the future, with the consent of the mortgagee and subject to the terms of a subordination and standstill agreement to be entered into in favor of the mortgagee. See ‘‘Peter Cooper Village & Stuyvesant Town’’ in Annex D to this prospectus supplement.
With respect to 1 mortgage loan (loan number 142) representing approximately 0.1% of the mortgage pool (0.2% of loan group 1), the related mortgage loan documents provide that under certain circumstances the related borrower may incur additional debt (a) secured by an interest in the related mortgaged property and (b) secured by ownership interests in the related borrower pledged as security for such loan.
With respect to 1 mortgage loan (loan number 211), representing approximately 0.1% of the mortgage pool (0.2% of loan group 2), the related mortgage loan documents provide that, under certain circumstances (a) the related borrower may incur additional unsecured debt and (b) the related borrower may encumber the related mortgaged property with subordinate debt in the future, with the consent of the mortgagee and subject to the terms of a subordination and standstill agreement to be entered into in favor of the mortgagee and the satisfaction of certain financial conditions.
With respect to 3 mortgage loans (loan numbers 13, 23 and 189), representing approximately 1.5% of the mortgage pool (2.1% of loan group 1), the related mortgage loan documents provide that, under certain circumstances (a) the related borrower may incur additional unsecured debt and (b) the entity owning an interest in the related borrower may pledge their interests in the borrower as security for mezzanine debt in the future, with the consent of the mortgagee and subject to the terms of a subordination and standstill agreement to be entered into in favor of the mortgagee and the satisfaction of certain financial conditions.
Secured subordinated debt encumbering any mortgaged property may increase the difficulty of refinancing the related mortgage loan at maturity and the possibility that reduced cash flow could result in deferred maintenance. Also, in the event that the holder of the subordinated debt has filed for bankruptcy or been placed in involuntary receivership, foreclosure by any senior lienholder (including the trust fund) on the mortgaged property could be delayed. In addition, substantially all of the mortgage loans permit the related borrower to incur limited indebtedness in the ordinary course of business or for capital improvements that is not secured by the related mortgaged property which is generally limited to a specified percentage of the outstanding principal balance of the related mortgage loan. Further, certain
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of the mortgage loans included in the trust fund do not prohibit limited partners or other owners of non-controlling interests in the related borrower from pledging their interests in the borrower as security for mezzanine debt.
In addition, certain mortgage loans, which may include the mortgage loans previously described in this risk factor, permit the related borrower to incur, or do not prohibit the related borrower from incurring, unsecured debt to an affiliate of, or owner of an interest in, the borrower or to an affiliate of such an owner, subject to certain conditions under the related mortgage loan documents. Further, certain of the mortgage loans permit additional liens on the related mortgaged properties for (1) assessments, taxes or other similar charges or (2) liens which in the aggregate constitute an immaterial and insignificant monetary amount with respect to the net value of the related borrower’s assets. A default by the borrower on such additional indebtedness could impair the borrower’s financial condition and result in the bankruptcy or receivership of the borrower which would cause a delay in the foreclosure by the trust fund on the mortgaged property. It may not be evident that a borrower has incurred any such future subordinate second lien debt until the related mortgage loan otherwise defaults. In cases in which one or more subordinate liens are imposed on a mortgaged property or the borrower incurs other indebtedness, the trust fund is subject to additional risks, including, without limitation, the following:
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• | the risk that the necessary maintenance of the mortgaged property could be deferred to allow the borrower to pay the required debt service on the subordinate financing and that the value of the mortgaged property may fall as a result; |
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• | the risk that the borrower may have a greater incentive to repay the subordinate or unsecured indebtedness first; |
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• | the risk that it may be more difficult for the borrower to refinance the mortgage loan or to sell the mortgaged property for purposes of making any balloon payment upon the maturity of the mortgage loan; |
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• | the existence of subordinated debt encumbering any mortgaged property may increase the difficulty of refinancing the related mortgage loan at maturity and the possibility that reduced cash flow could result in deferred maintenance; and |
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• | the risk that, in the event that the holder of the subordinated debt has filed for bankruptcy or been placed in involuntary receivership, foreclosing on the mortgaged property could be delayed and the trust fund may be subjected to the costs and administrative burdens of involvement in foreclosure or bankruptcy proceedings or related litigation. |
See ‘‘CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS AND LEASES—Subordinate Financing’’ and ‘‘—Due-on-Sale and Due-on-Encumbrance’’ in the accompanying prospectus and ‘‘DESCRIPTION OF THE MORTGAGE POOL—Certain Terms and Conditions of the Mortgage Loans—Other Financing’’ and ‘‘—Due-on-Sale and Due-on-Encumbrance Provisions’’ in this prospectus supplement.
Mezzanine debt is debt that is incurred by the owner of equity in one or more borrowers and is secured by a pledge of the equity ownership interests in such borrowers. Because mezzanine debt is secured by the obligor’s equity interest in the related borrowers, such financing effectively reduces the obligor’s economic stake in the related mortgaged property. The existence of mezzanine debt may reduce cash flow on the borrower’s mortgaged property after the payment of debt service and may increase the likelihood that the owner of a borrower will permit the value or income producing potential of a mortgaged property to fall and may create a greater risk that a borrower will default on the mortgage loan secured by a mortgaged property whose value or income is relatively weak.
Generally, upon a default under mezzanine debt, the holder of such mezzanine debt would be entitled to foreclose upon the equity in the related mortgagor, which has been pledged to secure payment of such mezzanine debt. Although such transfer of equity may not trigger the due on sale clause under the related mortgage loan, it could cause the obligor under such mezzanine debt to file for bankruptcy, which could negatively affect the operation of the related mortgaged property and such borrower’s ability to make payments on the related mortgage loan in a timely manner.
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Additionally, some intercreditor agreements with respect to certain mezzanine debt may give the holder of the mezzanine debt the right to cure certain defaults and, upon a default, to purchase the related mortgage loan for an amount equal to the then current outstanding balance of such mortgage loan. Some intercreditor agreements relating to mezzanine debt may also limit the special servicer’s ability to enter into certain modifications of the mortgage loan without the consent of the related mezzanine lender.
See ‘‘CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS AND LEASES—Due-on-Sale and Due-on-Encumbrance’’ in the accompanying prospectus and ‘‘DESCRIPTION OF THE MORTGAGE POOL—Certain Terms and Conditions of the Mortgage Loans—Other Financing’’ and ‘‘—Due-on-Sale and Due-on-Encumbrance Provisions’’ in this prospectus supplement.
Thirteen (13) of the mortgage loans (loan numbers 2, 7, 14, 18, 29, 33, 43, 45, 80, 85, 159, 171 and 218), representing 13.2% of the mortgage pool (11 mortgage loans in loan group 1 or 17.9% and 2 mortgage loans in loan group 2 or 1.6%), have companion loans that are subordinate to the related mortgage loan. See ‘‘DESCRIPTION OF THE MORTGAGE POOL— Co-Lender Loans’’ in this prospectus supplement and ‘‘One Congress Street’’, ‘‘Spring Mill Corporate Center’’, and ‘‘PNC Corporate Plaza’’ in Annex D to this prospectus supplement.
Three (3) of the mortgage loans, (loan numbers 1, 4, and 5), representing 27.9% of the mortgage pool (2 mortgage loans in loan group 1 or 12.5% and 1 mortgage loan in loan group 2 or 65.5%), has 1 or more companion loans that are pari passu in right of entitlement with the related mortgage loan. See ‘‘DESCRIPTION OF THE MORTGAGE POOL—Co-Lender Loans’’ in this prospectus supplement and the description of the Peter Cooper Village & Stuyvesant Town mortgage loan, the State Street Financial Center mortgage loan and the 485 Lexington Avenue mortgage loan in Annex D to this prospectus supplement.
One (1) mortgage loan, (loan number 2), representing 6.8% of the mortgage pool (9.5% of loan group 1) has 1 companion loan that is pari passu in right of entitlement with the related mortgage loan and 1 companion loan that is subordinate in right of entitlement to each of the mortgage loan and the pari passu companion loan. See ‘‘DESCRIPTION OF THE MORTGAGE POOL-Co-Lender Loans’’ in this prospectus supplement and the description of the Five Times Square mortgage loan in Annex D to this prospectus supplement.
Although the assets of the trust fund do not include the companion loans related to the mortgage loans which have companion loans, the related borrower is still obligated to make interest and principal payments on those additional obligations. As a result, the trust fund is subject to additional risks, including:
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• | the risk that the necessary maintenance of the related mortgaged property could be deferred to allow the borrower to pay the required debt service on the subordinate or pari passu obligations and that the value of the mortgaged property may fall as a result; and |
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• | the risk that it may be more difficult for the borrower to refinance the mortgage loan or to sell the mortgaged property for purposes of making any balloon payment on the entire balance of both the loans contained in the loan pair upon the maturity of the mortgage loans. |
The holders of the pari passu companion loans have certain control, consultation and/or consent rights with respect to the servicing and/or administration of the subject split loan structures. See ‘‘DESCRIPTION OF THE MORTGAGE POOL—Co-Lender Loans’’ in this prospectus supplement.
Bankruptcy and other Proceedings Relating to Sponsors Entail Certain Risks
Certain of the mortgage loans have a sponsor or sponsors that have, or that have affiliates that have, previously filed bankruptcy, been involved in foreclosures, deeds-in-lieu of foreclosures or workouts pertaining to other loans secured by properties of such sponsor(s) or sponsor affiliates, or have been involved in evictions or other proceedings. We cannot assure you that such sponsors will not utilize their rights in bankruptcy in the event of any threatened action by the mortgagee to enforce its rights under the related mortgage loan documents or otherwise assert defenses or dispute or prolong any foreclosure actions or other exercise of rights by the mortgagee. For example, with respect to 1 mortgage loan (loan number 6), representing 3.5% of the mortgage pool (5.0% of loan group 1), the sponsor of the borrower has been affiliated with several actions in bankruptcy.
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See ‘‘RISK FACTORS—Bankruptcy Proceedings Entail Certain Risks’’ in the accompanying prospectus.
The Borrower’s Form of Entity May Cause Special Risks
Most of the borrowers are legal entities rather than individuals. Mortgage loans made to legal entities may entail risks of loss greater than those of mortgage loans made to individuals. For example, a legal entity, as opposed to an individual, may be more inclined to seek legal protection from its creditors under the bankruptcy laws. Unlike individuals involved in bankruptcies, most of the entities generally do not have personal assets and creditworthiness at stake. The bankruptcy of a borrower, or a general partner or managing member of a borrower, may impair the ability of the mortgagee to enforce its rights and remedies under the related mortgage.
Certain of the borrowers are not special purpose entities structured to limit the possibility of becoming insolvent or bankrupt, and therefore may be more likely to become insolvent or the subject of a voluntary or involuntary bankruptcy proceeding because such borrowers may be:
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• | operating entities with businesses distinct from the operation of the related mortgaged property with the associated liabilities and risks of operating an ongoing business; or |
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• | individuals or entities that have personal liabilities unrelated to the related mortgaged property. |
However, any borrower, even a special purpose entity structured to be bankruptcy remote, as an owner of real estate will be subject to certain potential liabilities and risks. We cannot provide assurances that any borrower will not file for bankruptcy protection or that creditors of a borrower of a corporate or individual general partner or managing member of a borrower will not initiate a bankruptcy or similar proceeding against such borrower or corporate or individual general partner or managing member.
Furthermore, with respect to any related borrowers, creditors of a common parent in bankruptcy may seek to consolidate the assets of such borrowers with those of the parent. Consolidation of the assets of such borrowers would likely have an adverse effect on the funds available to make distributions on your certificates, and may lead to a downgrade, withdrawal or qualification of the ratings of your certificates. See ‘‘CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS AND LEASES—Bankruptcy Laws’’ in the accompanying prospectus.
With respect to 36 mortgage loans (loan numbers 5, 14, 18, 35, 42, 51, 56, 59, 60, 61, 65, 66, 70, 76, 88, 103, 108, 109, 117, 120, 122, 125, 126, 128, 131, 142, 146, 151, 178, 188, 192, 199, 200, 212, 246 and 252), representing 11.4% of the mortgage pool (25 mortgage loans in loan group 1 or 12.7% and 11 mortgage loans in loan group 2 or 8.4%), the borrowers own the related mortgaged property as tenants-in-common. See ‘‘DESCRIPTION OF THE MORTGAGE POOL—Twenty Largest Mortgage Loans’’ and Annex D in this prospectus supplement. As a result, the related mortgage loans may be subject to prepayment, including during periods when prepayment might otherwise be prohibited, as a result of partition. Although some of the related borrowers have purported to waive any right of partition, we cannot assure you that any such waiver would be enforced by a court of competent jurisdiction. In addition, enforcement of remedies against tenant-in-common borrowers may be prolonged if the tenant-in-common borrowers become insolvent or bankrupt at different times because each time a tenant-in-common borrower files for bankruptcy, the bankruptcy court stay is reinstated.
Condominium Agreements Entail Certain Risks
Five (5) mortgaged properties securing 5 mortgage loans (loan numbers 11, 43, 50, 181 and 229), representing, by allocated loan amount, 2.1% of the mortgage pool (2 mortgaged properties in loan group 1 or 1.8% and 3 mortgaged properties in loan group 2 or 3.0%), are subject to the terms of one or more condominium agreements. In certain of these cases, the related mortgaged property does not represent the entire condominium regime, and as a result the risks associated with this form of property ownership may be greater because the related borrower does not control 100% of the condominium board. In addition, certain of the mortgage loans, subject to the terms and conditions in the related mortgage loan documents, allow or do not prohibit the related mortgaged property to become subject to
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a condominium regime in the future. Due to the nature of condominiums, a default on the part of the related borrower will not allow the mortgagee the same flexibility in realizing on the collateral as is generally available with respect to commercial properties that are not condominiums. The rights of other unit owners, the condominium documents and the state and local laws applicable to condominium units must be considered and respected. Consequently, servicing and realizing upon the collateral could subject the certificateholders to greater delay, expense and risk than a loan secured by a commercial property that is not a condominium.
Inspections and Appraisals May Not Accurately Reflect Value or Condition of Mortgaged Property
In general, appraisals represent only the analysis and opinion of qualified experts and are not guaranties of present or future value, and may determine a value of a property that is significantly higher than the amount that can be obtained from the sale of a mortgaged property under a distress or liquidation sale. In certain cases, appraisals may reflect ‘‘as-stabilized’’ values reflecting certain assumptions, such as future construction completion, projected re-tenanting or increased tenant occupancies. For example, with respect to 20 mortgaged properties (loan numbers 9, 19.01, 21, 27, 32, 33, 36, 37, 38, 43, 67, 109, 123, 124, 125, 130, 133, 145, 184 and 190), representing, by allocated loan amount, approximately 7.8% of the mortgage pool (14 mortgaged properties in loan group 1 or 8.4% and 6 mortgaged properties in loan group 2 or 6.3%), the appraised value represented is the ‘‘as-stabilized’’ value. See ‘‘DESCRIPTION OF THE MORTGAGE POOL—Twenty Largest Mortgage Loans’’ in this prospectus supplement. In addition, with respect to certain of the appraisals reflecting ‘‘as-stabilized’’ values, the corresponding ‘‘as-is’’ value is less than the principal balance of the related mortgage loan. Information regarding the values of the mortgaged properties at the date of such report is presented under ‘‘DESCRIPTION OF THE MORTGAGE POOL—Additional Mortgage Loan Information’’ in this prospectus supplement for illustrative purposes only. Any engineering reports or site inspections obtained in connection with this offering represent only the analysis of the individual engineers or site inspectors preparing such reports at the time of such report, and may not reveal all necessary or desirable repairs, maintenance or capital improvement items.
Risks Relating to Net Cash Flow
As described under ‘‘DESCRIPTION OF THE MORTGAGE POOL—Additional Mortgage Loan Information’’, ‘‘net cash flow’’ means cash flow as adjusted based on a number of assumptions used by the mortgage loan sellers. No representation is made that the net cash flow set forth herein as of the cut-off date or any other date represents future net cash flows. In certain cases, co-tenancy provisions were assumed to be satisfied and vacant space was assumed to be occupied and space that was due to expire was assumed to have been re-let at market rates that may have exceeded current rent. Each originator of commercial mortgage loans has its own underwriting criteria and no assurance can be given that adjustments or calculations made by one originator would be made by other lenders.
In addition, net cash flow reflects calculations and assumptions used by the mortgage loan sellers and should not be used as a substitute for, and may vary (perhaps substantially) from, cash flow as determined in accordance with GAAP as a measure of the results of a mortgaged property’s operation or for cash flow from operating activities determined in accordance with GAAP as a measure of liquidity. For example, with respect to the 7 mortgage loans (loan numbers 67, 72, 106, 125, 130, 195 and 208), representing 1.1% of the mortgage pool (1.5% of loan group 1), net cash flow includes amounts received under a master lease entered into with the related borrowers, sponsors or other affiliates of the related borrowers, as lessees, pursuant to which the lessees are required to make monthly rental payments which in some cases may cease at such time as the net cash flow at the related mortgaged property reaches a certain level, as more particularly described in the related mortgage loan documents.
The debt service coverage ratios set forth herein for the mortgage loans and the mortgaged properties vary, and may vary substantially, from the debt service coverage ratios for the mortgage loans and the mortgaged properties as calculated pursuant to the definition of such ratios as set forth in the related loan documents. For example, with respect to 1 mortgage loan (loan number 1), representing 19.0% of the mortgage pool (65.5% of loan group 2), the underwritten net cash flow used to calculate the
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DSC Ratio set forth in this prospectus supplement was determined using future cash flow projections that include various assumptions including an assumed annual rate of conversion of units from rent-stabilized units to deregulated units. There can be no assurance that conversion of units from rent-stabilized units to deregulated units will occur at the related mortgaged property at the assumed rate. Conversion of units from rent-stabilized units to deregulated units at a rate lower than the assumed rate would have a negative impact on the debt service coverage ratio. Moreover, certain tenants at the related mortgaged property have brought legal actions against the related borrower, among others, seeking, among other things, a declaration that certain deregulated units at the related mortgaged property remain subject to rent-stabilization. See ‘‘RISK FACTORS—Litigation May Have Adverse Effect on Borrowers.’’ The debt service coverage ratio for the related mortgaged property calculated based on the net operating income for year 2006 is 0.58x. A general reserve of $590,000,000 was established at origination of the related mortgage loan, $400,000,000 of which can be used for debt service on the related mortgage loan and the related mezzanine loans. See ‘‘DESCRIPTION OF THE MORTGAGE POOL— Twenty Largest Mortgage Loans’’ and the description of the Peter Cooper Village & Stuyvesant Town mortgage loan in Annex D to this prospectus supplement. See ‘‘DESCRIPTION OF THE MORTGAGE POOL—Additional Mortgage Loan Information’’ for a discussion of the assumptions used in determining Net Cash Flow. The underwriters express no opinion as to the accuracy of the determination of, or the appropriateness or reasonableness of the assumptions used in determining, Net Cash Flow.
The Mortgaged Properties May Not Be in Compliance with Current Zoning Laws
The mortgaged properties securing the mortgage loans included in the trust fund are typically subject to building and zoning ordinances and codes affecting the construction and use of real property. Since the zoning laws applicable to a mortgaged property (including, without limitation, density, use, parking and set-back requirements) are usually subject to change by the applicable regulatory authority at any time, the improvements upon the mortgaged properties may not, currently or in the future, comply fully with all applicable current and future zoning laws. Such changes may limit the ability of the related borrower to rehabilitate, renovate and update the premises, and to rebuild or utilize the premises ‘‘as is’’ in the event of a casualty loss with respect thereto. Such limitations may adversely affect the cash flow of the mortgaged property following such loss. Insurance proceeds may not be sufficient to pay off such mortgage loan in full. In addition, if the mortgaged property were to be repaired or restored in conformity with then current law, its value could be less than the remaining balance on the mortgage loan and it may produce less revenue than before such repair or restoration. In many instances, if a mortgaged property was not in material compliance with current zoning requirements, the borrower was required to obtain law and ordinance insurance coverage and/or have such violation insured over by the lender’s title insurance policy to offset these risks. However, with respect to 9 mortgaged properties (loan numbers 84, 154, 180, 189, 196, 215, 227, 238 and 260), representing, by allocated loan amount, 0.7% of the mortgage pool (8 mortgaged properties in loan group 1 or 0.8% and 1 mortgaged property in loan group 2 or 0.3%), law and ordinance insurance or title insurance was not obtained with respect to such violations. In the event the applicable regulatory authorities wish to take action against the related borrowers for these violations, the actions required to be taken by the borrower may have a material adverse effect on its ability to meet its obligations under the related mortgage loan documents.
Certain Mortgaged Properties May be Redeveloped or Renovated
Certain of the mortgaged properties are currently undergoing or are expected to undergo redevelopment or renovation.
In the event the related borrower fails to pay the costs of work completed or material delivered in connection with such on-going redevelopment or renovation, the portion of the mortgaged property on which there are renovations may be subject to mechanics’ or materialmen’s liens that may be senior to the lien on the related mortgage loans.
The existence of construction or renovation at a mortgaged property may make such mortgaged property less attractive to tenants or their customers or, in the case of hospitality properties may require that a portion of the mortgaged property not be used during that renovation and, accordingly, could have a negative effect on net operating income.
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Restrictions on Certain of the Mortgaged Properties May Limit Their Use
Certain of the mortgaged properties securing mortgage loans included in the trust fund which are non-conforming may not be ‘‘legal non-conforming’’ uses. Further, even if a non-conforming mortgaged property is considered to be ‘‘legal non-conforming’’, certain jurisdictions have laws which state that in the event of a casualty where the damage to such mortgaged property exceeds certain specified thresholds, the improvements may only be rebuilt in conformity with the current zoning laws at the time of such casualty. The failure of a mortgaged property to comply with zoning laws or to be a ‘‘legal non-conforming’’ use or the existence of any threshold laws impacting the ability to rebuild the improvements may adversely affect the market value of the mortgaged property or the borrower’s ability to continue to use it in the manner it is currently being used or to rebuild the mortgaged property following a casualty event.
In addition, certain of the mortgaged properties are subject to certain use restrictions imposed pursuant to restrictive covenants, covenants and agreements requiring the related mortgaged property or portions thereof to be made available for low income housing or other affordable housing (under affordable housing tax credit programs or otherwise), governmental requirements, reciprocal easement agreements or operating agreements or, in the case of those mortgaged properties that are condominiums, condominium declarations or other condominium use restrictions or regulations, which, especially in a situation where the related mortgaged property does not represent the entire condominium building (for example, 5 mortgage loans (loan numbers 11, 43, 50, 181 and 229), representing 2.1% of the mortgage pool (2 mortgage loans in loan group 1 or 1.8% and 3 mortgage loans in loan group 2 or 3.0%), may adversely affect the ability of the related borrower to lease the related mortgaged property on favorable terms, thus adversely affecting the related borrower’s ability to fulfill its obligations under the related mortgage loan documents. Such use restrictions include, for example, limitations on the character of the improvements or the properties, limitations affecting noise and parking requirements, among other things, and limitations on the borrowers’ right to operate certain types of facilities within a prescribed radius. These limitations could adversely affect the ability of the related borrower to lease the related mortgaged property on favorable terms, thus adversely affecting the borrower’s ability to fulfill its obligations under the related mortgage loan. In the case of 1 mortgage loan (loan number 30), representing approximately 0.5% of the mortgage pool (1.8% of loan group 2), the related mortgaged property, an apartment complex, is subject to an agreement and restrictive covenant that requires, in order to avoid substantial penalties and other consequences of default, that the owner of the mortgaged property among other things cause each tenant to execute a disclosure statement acknowledging that he/she is aware of an existing automobile sales and service facility immediately adjacent to the mortgaged property, and if any tenant of any apartment in an adjacent building at the mortgaged property (which includes any building any portion of which is within 100 feet of the adjacent automobile sales and service facility) objects at any time to any aspect of the use of or business conducted at the adjacent automobile sales and service facility, the owner and manager of the mortgaged property must offer in good faith to allow such apartment tenant to relocate to the first available apartment with the same floor plan that is not within such adjacent building. See ‘‘RISK FACTORS—The Mortgage Loans—Condominium Agreements Entail Certain Risks’’ in this prospectus supplement.
If the special servicer forecloses on behalf of the trust fund or a mortgaged property that is being redeveloped or renovated, the special servicer will only be permitted to arrange for completion of the redevelopment or renovation if at least 10% of the costs of construction were incurred at the time default on the related mortgage loan became imminent.
Compliance With Applicable Laws and Regulations May Result in Losses
A borrower may be required to incur costs to comply with various existing and future federal, state or local laws and regulations applicable to the related mortgaged property securing a mortgage loan included in the trust fund. Examples of these laws and regulations include, among others, rent control and rent stabilization laws, zoning laws and the Americans with Disabilities Act of 1990, which requires all public accommodations to meet certain federal requirements related to access and use by disabled persons. See ‘‘CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS AND LEASES—Americans with Disabilities Act’’ in the accompanying prospectus. The expenditure of such costs or the imposition
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of injunctive relief, penalties or fines in connection with the borrower’s noncompliance could negatively impact the borrower’s cash flow and, consequently, its ability to pay its mortgage loan.
Limitations on the Benefits of Cross-Collateralized and Cross-Defaulted Properties
Seven (7) groups of mortgage loans, representing 1.9% of the mortgage pool (2.6% of loan group 1) are groups of mortgage loans that are cross-collateralized and/or cross-defaulted with each of the other mortgage loans in their respective groups, as indicated in Annex A-5 to this prospectus supplement.
Certain of the mortgage loans referred to in the prior paragraph may entitle the related borrower(s) to obtain a release of one or more of the corresponding mortgaged properties and/or a termination of any applicable cross-collateralization and cross-default provisions, subject, in each case, to the fulfillment of one or more of the following conditions—
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• | the satisfaction of certain criteria set forth in the related mortgage loan documents; |
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• | the satisfaction of certain leasing goals or other performance tests; |
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• | the satisfaction of debt service coverage and/or loan-to-value tests for the property or properties that will remain as collateral; and/or |
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• | receipt by the mortgagee of confirmation from each applicable rating agency that the action will not result in a qualification, downgrade or withdrawal of any of the then-current ratings of the offered certificates. |
In addition, some mortgage loans are secured by first lien deeds of trust or mortgages, as applicable, on multiple mortgaged properties securing obligations of one borrower or the joint and several obligations of multiple borrowers. For example, the Wildcat Self Storage Pool mortgage loan (loan number 19), representing 0.7% of the mortgage pool (0.9% of loan group 1), is secured by 9 mortgaged properties located in 2 states. See ‘‘Wildcat Self Storage Pool’’ in Annex D to this prospectus supplement. In addition, the Sealy C Pool mortgage loan (loan number 20), representing 0.7% of the mortgage pool (0.9% of loan group 1), is secured by 14 mortgaged properties located in 2 states. See ‘‘Sealy C Pool’’ in Annex D to this prospectus supplement. However, some of these mortgage loans permit the release of individual mortgaged properties from the related mortgage lien through partial defeasance or otherwise. Furthermore, such arrangements could be challenged as fraudulent conveyances by creditors of any of the related borrowers or by the representative of the bankruptcy estate of any related borrower if one or more of such borrowers becomes a debtor in a bankruptcy case. Generally, under federal and most state fraudulent conveyance statutes, a lien granted by any such borrower could be voided if a court determines that:
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• | such borrower was insolvent at the time of granting the lien, was rendered insolvent by the granting of the lien, was left with inadequate capital or was not able to pay its debts as they matured; and |
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• | such borrower did not, when it allowed its mortgaged property to be encumbered by the liens securing the indebtedness represented by the other cross-collateralized loans, receive ‘‘fair consideration’’ or ‘‘reasonably equivalent value’’ for pledging such mortgaged property for the equal benefit of the other related borrowers. |
We cannot provide assurances that a lien granted by a borrower on a cross-collateralized loan to secure the mortgage loan of another borrower, or any payment thereon, would not be avoided as a fraudulent conveyance. See ‘‘DESCRIPTION OF THE MORTGAGE POOL—Certain Terms and Conditions of the Mortgage Loans—Cross-Default and Cross-Collateralization of Certain Mortgage Loans; Certain Multi-Property Mortgage Loans’’ in this prospectus supplement and Annex A-5 to this prospectus supplement for more information regarding the cross-collateralized loans. No mortgage loan included in the trust fund (other than the mortgage loans with companion loans) is cross-collateralized with a mortgage loan not included in the trust fund.
Substitution of Mortgaged Properties May Lead to Increased Risks
Thirteen (13) mortgage loans (loan numbers 13, 23, 63, 73, 84, 163, 166, 223, 226, 228, 248, 258 and 263) representing 2.5% of the mortgage pool (3.6% of loan group 1), permit the related borrowers the
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right to substitute mortgaged properties of like kind and quality for the properties currently securing the related mortgage loans. As a result, it is possible that one or more (and possibly all) mortgaged properties that secure the mortgage loans may not secure such mortgage loans for their entire term. Any substitution will require mortgagee consent and will have to meet certain conditions, including loan-to-value tests and debt service coverage tests, and, in certain cases, the related borrower will also be required to obtain written confirmation from the rating agencies that any ratings of the certificates will not, as a result of the proposed substitution, be downgraded, qualified or withdrawn and the related borrower will provide an opinion of counsel that the REMIC status of the trust fund will not be adversely impacted by the proposed substitution. Nevertheless, the replacement property may differ from the substituted property with respect to certain characteristics.
Single Tenants and Concentration of Tenants Subject the Trust Fund to Increased Risk
Fifty-two (52) of the mortgaged properties securing mortgage loans included in the trust fund, representing 10.6% of the mortgage pool by allocated loan amount (14.9% of loan group 1), are leased wholly to a single tenant or are wholly owner occupied. For example, the mortgaged property securing the 1 mortgage loan (loan number 4), representing 4.9% of the mortgage pool (6.9% of loan group 1), is leased entirely to one tenant, an affiliate of State Street Corporation. In addition, the mortgaged property securing 1 mortgage loan (loan number 2), representing 6.8% of the mortgage pool (9.5% of loan group 1) is predominantly leased to one tenant, Ernst & Young, LLP. See Annex D to this prospectus supplement. Certain other of the mortgaged properties are leased in large part to a single tenant or are in large part owner occupied. Any default by a major tenant could adversely affect the related borrower’s ability to make payments on the related mortgage loan. We cannot provide assurances that any major tenant will continue to perform its obligations under its lease (or, in the case of an owner-occupied mortgaged property, under the related mortgage loan documents).
In addition, certain of the mortgaged properties that are leased to a single tenant or a major tenant may have leases that terminate or grant the tenant early termination rights prior to the maturity date of the related mortgage loan. For example, with respect to the 485 Lexington Avenue mortgage loan (loan number 5), representing approximately 4.0% of the mortgage pool (5.6% of loan group 1), Citibank, N.A. and Travelers Insurance, the two largest tenants, representing in the aggregate approximately 56.0% of the net rentable area, expire on or near the maturity date of the mortgage loan. With respect to the One Congress Street Mortgage Loan (loan number 7), representing approximately 2.4% of the mortgage pool, and 3.4% of loan group 1, the lease with the largest tenant, the General Services Administration, representing approximately 76.2% of the net rentable area of the commercial space at the related Mortgaged Property, expires in January 2010. If the borrower is not able to relet the space or is unable to relet the space at favorable rents, this may adversely impact the ability of the borrower to successfully refinance the related mortgaged property. In addition, mortgaged properties leased to a single tenant, or a small number of tenants, are more likely to experience interruptions of cash flow if a tenant fails to renew its lease because there may be less or no rental income until new tenants are found, and it may be necessary to expend substantial amounts of capital to make the space acceptable to new tenants.
In addition, certain of the mortgaged properties may be leased in whole or in part by government-sponsored tenants who may have certain rights to cancel their leases or reduce the rent payable with respect to such leases at any time for, among other things, lack of appropriations. See ‘‘—Future Cash Flow and Property Values are Not Predictable’’ in this prospectus supplement.
The Failure of a Tenant Will Have a Negative Impact on Single Tenant and Tenant Concentration Properties
The bankruptcy or insolvency of a major tenant or sole tenant, or a number of smaller tenants, in retail, industrial and office properties may adversely affect the income produced by a mortgaged property. Under the Bankruptcy Code, a tenant has the option of assuming or rejecting any unexpired lease. If the tenant rejects the lease, the landlord’s claim for breach of the lease would be a general unsecured claim against the tenant (absent collateral securing the claim) and the amounts the landlord could claim would be limited.
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In addition, certain of the mortgaged properties may have tenants that are paying rent but are not in occupancy or may have vacant space that is not leased or major tenants or retail anchors at properties adjacent to the related mortgaged property that have ‘‘gone dark’’. Any ‘‘dark’’ space may cause the property to be less desirable to other potential tenants or the related tenant may be more likely to default in its obligations under the lease. We cannot assure you that those tenants will continue to fulfill their lease obligations or that the space will be relet. Additionally, certain tenants may have a right to a rent abatement or the right to cancel their lease if certain major tenants at the mortgaged property vacate or ‘‘go dark’’.
In addition, with respect to 2 mortgage loans (loan numbers 10 and 261), representing approximately 1.3% of the mortgage pool (1.8% of loan group 1), the related borrower is the lessor under a ground lease and the ground lease payments are the borrowers only source of income available to satisfy its obligations under the related mortgage loan documents. See the mortgage loan referred to as ‘‘9 West 57th Street’’ in Annex D to this prospectus supplement.
Litigation May Have Adverse Effect on Borrowers
From time to time, there may be legal proceedings pending, threatened or ongoing against the borrowers, managers, sponsors and their respective affiliates relating to the business of, or arising out of the ordinary course of business of, or outside of the ordinary course of business of, the borrowers, managers, sponsors and their respective affiliates, and certain of the borrowers, managers, sponsors and their respective affiliates are currently subject to legal proceedings relating to the business of, or arising out of the ordinary course of business of, or outside of the ordinary course of business, the borrowers, managers, sponsors or their respective affiliates. In addition, certain borrowers, managers and their respective affiliates may be or have been subject to investigation, civil penalty, criminal penalty or enforcement. It is possible that such proceedings may have a material adverse effect on any borrower’s ability to meet its obligations under the related mortgage loan and, thus, on distributions on your certificates.
For example, 1 mortgage loan (loan number 1), which is secured by the mortgaged property identified on Annex A-1 as Peter Cooper Village & Stuyvesant Town, representing 19.0% of the mortgage pool (65.5% of loan group 2), is the subject of litigation. On January 22, 2007, a lawsuit was commenced in New York State Supreme Court (New York County) by four persons claiming to be current or former tenants of the related mortgaged property (the ‘‘January Action’’). The plaintiffs are seeking to assert their claims as a class action on behalf of themselves and other current and former tenants of the mortgaged property, who, the plaintiffs allege, have been and continue to be charged market-rate rents for their rental units, although they were and are legally entitled to pay considerably lower stabilized rents. The plaintiffs’ complaint names as defendants, among others, the related borrower and certain subsidiaries of the prior owner that were title holders to the related mortgaged property prior to its sale in November 2006. Among other things, the complaint alleges that from 1992 through the present, the owners of the related mortgaged property applied for and received from New York City approximately $24.5 million in real estate tax abatements and exemptions under a program known as the ‘‘J-51 program,’’ and that the most recent such benefits are scheduled to expire in or about 2017 or 2018. The complaint further alleges that, under the Rent Stabilization Law of 1969, as a condition to receiving such tax benefits, the units in the premises receiving the benefits must be rent stabilized for the period during which the premises receive the benefits, and until they may thereafter be properly deregulated. The plaintiffs seek a judicial declaration to this effect (which would have the effect of returning approximately 3,000 de-controlled units at the related mortgaged property to stabilized status), as well as money damages and attorneys’ fees for the alleged rent overcharges. The plaintiffs allege that the overcharges for the 4 years preceding the commencement of their lawsuit were at least $215 million. The plaintiffs also seek damages in the amount of 3 times the alleged overcharges for the 2 years preceding the commencement of their lawsuit, or a total of at least $320 million, or in the alternative, interest on the alleged rent overcharges during the 4 years preceding the commencement of their lawsuit, as well as attorneys’ fees. On February 14, 2007, a second lawsuit was commenced in New York State Supreme Court (New York County) by a person claiming to be a tenant at the related mortgaged property (the ‘‘February Action’’, together with the January Action, the ‘‘Actions’’). The plaintiff’s complaint names as defendants the same
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parties named in the January Action and, as in the January Action, seeks to assert the plaintiff’s claims as a class action on behalf of itself and other current and former tenants of the related mortgaged property. Although the complaint is still under review, the allegations made in the complaint appears to be substantially similar to those made in the January Action, except for an additional allegation that the defendants engaged in deceptive acts and practices in violation of the New York General Business Law in the alleged overcharge of rents. The complaint also seeks a judicial declaration similar to that sought in the January Action as well as unspecified monetary damages.
The related sponsor and the related borrowers have expressed the belief that the Actions are without merit and have expressed their intent to vigorously contest the Actions. However, as in any litigation, there can be no assurance that the sponsor and the related borrower will prevail in either of the Actions. If the plaintiffs in either of the Actions were to prevail on behalf of themselves and the class which they seek to represent, and a court were to grant the requested judicial declaration, such a result could (i) lower certain rents in place at the related mortgaged property, thereby decreasing cash flows, and (ii) preclude the related borrowers from carrying out a significant part of its plan to convert rent stabilized units to market-rate units. Such a result (or any interim relief granted to the plaintiffs in either Action prior to final judgment) could adversely impact the related borrowers ability to make debt service payments on the mortgage loan or to refinance the mortgage loan at maturity. In addition, if any similar actions were to be successfully brought by other tenants, either on behalf of themselves or on behalf of a certified class, such actions would have a similar impact on the related borrowers and the related mortgaged property. The lender’s underwriting of the mortgage loan was based upon the assumption that apartment units at the mortgaged property would continue to be decontrolled throughout the term of the related mortgage loan. See ‘‘—Risks Relating to Net Cash Flow’’, ‘‘DESCRIPTION OF THE MORTGAGE POOL—Twenty Largest Mortgage Loans’’ and the description of the Peter Cooper Village & Stuyvesant Town mortgage loan in Annex D to this prospectus supplement. In addition, under applicable laws and regulations, the current owner of a property could be held liable for any rent overcharges received by a predecessor owner. An outcome favoring the plaintiffs in either Action in respect of the monetary damages for the alleged rent overcharges may further adversely impact the borrowers financial condition and its ability to meet its obligations under the mortgage loan. The borrowers purchased the mortgaged property from the previous owner on an ‘‘as-is’’ basis. It is unclear whether the borrowers would have recourse against the previous owner for a possible judgment entered against the borrowers in connection with the Actions. As in any litigation, it is not possible to predict what applications the plaintiffs in either Action may make or what remedies (including interim relief) may be sought or granted or what the effect of any applications or remedies may be on the future performance of the related mortgaged property.
Copies of the complaints filed in connection with the Actions are included in the CD-ROM attached to this prospectus supplement. Prospective investors may contact the Syndicate Desk of Wachovia Capital Markets, LLC at (704) 715-7008 to receive an original copy of the CD-ROM.
With respect to 5 mortgage loans (loan numbers 65, 76, 120, 126 and 131), representing approximately 0.9% of the mortgage pool (3 mortgage loans in loan group 1 or 0.7% and 2 mortgage loans in loan group 2 or 1.4%), Triple Net Properties, LLC or G REIT, Inc., a public company affiliated with Triple Net Properties, LLC, is the sponsor of the related borrowers and an affiliate of the property managers. Triple Net Properties, LLC has advised the related mortgage loan seller that the SEC commenced an investigation regarding certain of its activities. In its filings with the SEC, G REIT, Inc., indicated that the SEC requested information relating to disclosure in securities offerings and exemptions from the registration requirements of the Securities Act of 1933, as amended, for the private offerings in which Triple Net Properties, LLC and its affiliated entities were involved and exemptions from the registration requirements of the Securities Exchange Act of 1934, as amended, for several entities. In a recent filing with the SEC, G REIT, Inc. indicated that the information disclosed in connection with these securities offerings relating to the prior performance of all public and non public investment programs sponsored by Triple Net Properties, LLC contained certain errors. G REIT, Inc. reported that these errors included the following: (i) the prior performance tables included in the offering documents were stated to be presented on a GAAP basis but generally were not, (ii) a number of the prior performance data figures were themselves erroneous, even as presented on a tax or cash basis and (iii) with respect to certain programs sponsored by Triple Net Properties, LLC, where Triple Net Properties, LLC invested either
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alongside or in other programs sponsored by Triple Net Properties, LLC, the nature and results of these investments were not fully and accurately disclosed in the tables, resulting in an overstatement of Triple Net Properties, LLC’s program and aggregate portfolio operating results. We cannot assure you that G REIT, Inc. or Triple Net Properties, LLC will be able to adequately address these disclosure issues or that these investigations will not result in fines, penalties or administrative remedies or otherwise have an adverse effect on the performance, operations or financial condition of G REIT, Inc. or Triple Net Properties, LLC. In addition, we cannot assure you that if litigation were to commence or security holders were to assert claims related to the foregoing, it would not have a material adverse effect on your certificates.
With respect to 1 mortgage loan (loan number 4), representing approximately 4.9% of the mortgage pool (6.9% of loan group 1) and the related mortgaged property identified on Annex A-1 to this prospectus supplement as the State Street Financial Center, according to information from the related borrower, the sole tenant has filed a lawsuit against the related borrower asking for damages in excess of $4.2 million for alleged overcharges of certain operating expenses in years prior to the related borrower’s acquisition of the related mortgaged property. Payment of any such amount would reduce cash flow available to the borrower as would a reduction the amount the borrower could charge the tenants for operating expenses. There can be no assurance regarding how such lawsuit will be settled or resolved or that such lawsuit will not adversely affect the related borrower or the operation of the related mortgaged property. See the mortgage loan identified as ‘‘State Street Financial Center’’ on Annex D to this prospectus supplement.
With respect to 1 mortgage loan (loan number 190), representing approximately 0.1% of the mortgage pool (0.1% of loan group 1), a judgment was entered on October 7, 2005 in favor of Adaptive CM, LLC against the related borrower in the original amount of $325,388.74, accruing interest at 10% per annum. The judgment relates to a lawsuit filed against the related borrower arising out of a dispute over the general contractor’s completion of construction at the related mortgaged property and the payment of certain subcontractors. The judgment has been assigned to a third-party, and the related borrower has indicated that it is attempting to resolve the matter through settlement, and has indicated that it retains and is pursuing settlement of judgments and claims against the general contractor. At origination of the related mortgage loan, the related borrower deposited $600,000 in a reserve under the related mortgage loan documents, which amount is under the related mortgage loan documents to be released only upon satisfaction of the judgment. There is no assurance as to the ultimate outcome of any settlement negotiations or litigation or enforcement of the judgment or whether such outcome will have a material adverse effect on the related mortgage loan, the related borrower, the related mortgaged property or the performance or the value of your certificates.
The Prospective Performance of the Commercial and Multifamily Mortgage Loans Included in the Trust Fund Should Be Evaluated Separately from the Performance of the Mortgage Loans in Any of Our Other Trusts
While there may be certain common factors affecting the performance and value of income-producing real properties in general, those factors do not apply equally to all income-producing real properties and, in many cases, there are unique factors that will affect the performance and/or value of a particular income-producing real property. Moreover, the effect of a given factor on a particular real property will depend on a number of variables, including but not limited to property type, geographic location, competition, sponsorship and other characteristics of the property and the related mortgage loan. Each income-producing real property represents a separate and distinct business venture; and, as a result, each of the multifamily and commercial mortgage loans included in one of the depositor’s trusts requires a unique underwriting analysis. Furthermore, economic and other conditions affecting real properties, whether worldwide, national, regional or local, vary over time. The performance of a pool of mortgage loans originated and outstanding under a given set of economic conditions may vary significantly from the performance of an otherwise comparable mortgage pool originated and outstanding under a different set of economic conditions. Accordingly, investors should evaluate the mortgage loans underlying the offered certificates independently from the performance of mortgage loans underlying any other series of offered certificates.
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As a result of the distinct nature of each pool of commercial mortgage loans, and the separate mortgage loans within each pool, this prospectus supplement does not include disclosure concerning the delinquency and loss experience of static pools of periodic originations by the sponsor of assets of the type to be securitized (known as ‘‘static pool data’’). Because of the highly heterogeneous nature of the assets in commercial mortgage backed securities transactions, static pool data for prior securitized pools, even those involving the same asset types (e.g., hotels or office buildings), may be misleading, since the economics of the mortgaged properties and terms of the mortgage loans may be materially different. In particular, static pool data showing a low level of delinquencies and defaults would not be indicative of the performance of this pool or any other pool of mortgage loans originated by the same sponsor or sponsors. Therefore, investors should evaluate this offering on the basis of the information set forth in this prospectus supplement with respect to these mortgage loans, and not on the basis of any successful performance of other pools of securitized commercial mortgage loans.
The Status of a Ground Lease May Be Uncertain in a Bankruptcy Proceeding
Fifteen (15) mortgaged properties, representing 12.8% of the mortgage pool (14 mortgaged properties in loan group 1 or 18.0% and 1 mortgaged property in loan group 2 or 0.2%) by allocated loan amount, are secured in whole or in part by leasehold interests. Leasehold mortgage loans are subject to certain risks not associated with mortgage loans secured by a lien on the fee estate of the borrower. One of these risks is that if the related leasehold interest were to be terminated upon a lease default, the mortgagee would lose its security in the loan. Generally, each related ground lease requires the lessor thereunder to give the mortgagee notice of the borrower’s defaults under the ground lease and an opportunity to cure them, permits the leasehold interest to be assigned to the mortgagee or a purchaser at a foreclosure sale (in some cases only upon the consent of the lessor) and contains certain other protective provisions typically included in a ‘‘mortgageable’’ ground lease. In addition, pursuant to Section 365(h) of the Bankruptcy Code, ground lessees in possession under a ground lease that has commenced have the right to continue in a ground lease even though the representative of their bankrupt ground lessor rejects the lease. The leasehold mortgages generally provide that the borrower may not elect to treat the ground lease as terminated on account of any such rejection by the ground lessor without the prior approval of the holder of the mortgage note or otherwise prohibit the borrower from terminating the ground lease. In a bankruptcy of a ground lessee/borrower, the ground lessee/borrower under the protection of the Bankruptcy Code has the right to assume (continue) or reject (breach and/or terminate) any or all of its ground leases. If the ground lessor and the ground lessee/borrower are concurrently involved in bankruptcy proceedings, the trustee may be unable to enforce the bankrupt ground lessee/borrower’s right to continue in a ground lease rejected by a bankrupt ground lessor. In such circumstances, a ground lease could be terminated notwithstanding lender protection provisions contained therein or in the related mortgage. Further, in a recent decision by the United States Court of Appeals for the Seventh Circuit (Precision Indus. v. Qualitech Steel SBQ, LLC, 327 F.3d 537 (7th Cir. 2003)), the court ruled with respect to an unrecorded lease of real property that where a statutory sale of the fee interest in leased property occurs under Section 363(f) of the Bankruptcy Code (11 U.S.C. Section 363(f)) upon the bankruptcy of a landlord, such sale terminates a lessee’s possessory interest in the property, and the purchaser assumes title free and clear of any interest, including any leasehold estates. Pursuant to Section 363(e) of the Bankruptcy Code (11 U.S.C. Section 363(e)), a lessee may request the bankruptcy court to prohibit or condition the statutory sale of the property so as to provide adequate protection of the leasehold interest; however, the court ruled that this provision does not ensure continued possession of the property, but rather entitles the lessee to compensation for the value of its leasehold interest, typically from the sale proceeds. While there are certain circumstances under which a ‘‘free and clear’’ sale under Section 363(f) of the Bankruptcy Code would not be authorized (including that the lessee could not be compelled in a legal or equitable proceeding to accept a monetary satisfaction of his possessory interest, and that none of the other conditions of Section 363(f)(1)-(4) of the Bankruptcy Code otherwise permits the sale), we cannot provide assurances that those circumstances would be present in any proposed sale of a leased premises. As a result, we cannot provide assurances that, in the event of a statutory sale of leased property pursuant to Section 363(f) of the Bankruptcy Code, the lessee
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will be able to maintain possession of the property under the ground lease. In addition, we cannot provide assurances that the lessee and/or the mortgagee will be able to recuperate the full value of the leasehold interest in bankruptcy court.
In addition, certain of the mortgaged properties securing the mortgage loans are subject to operating leases. The operating lessee then sublets space in the mortgaged property to sub-tenants. Therefore, the cash flow from the rented mortgaged property will be subject to the bankruptcy risks with respect to the operating lessee.
Mortgage Loan Sellers May Not Be Able to Make a Required Repurchase or Substitution of a Defective Mortgage Loan
Each mortgage loan seller is the sole warranting party in respect of the mortgage loans sold by such mortgage loan seller to us. Neither we nor any of our affiliates (except, in certain circumstances, for Wachovia Bank, National Association in its capacity as a mortgage loan seller) are obligated to repurchase or substitute any mortgage loan in connection with either a breach of any mortgage loan seller’s representations and warranties or any document defects, if such mortgage loan seller defaults on its obligation to do so. We cannot provide assurances that the mortgage loan sellers will have the financial ability to effect such repurchases or substitutions.
In addition, one or more of the mortgage loan sellers may have acquired a portion of the mortgage loans included in the trust fund in one or more secondary market purchases. Such purchases may be challenged as fraudulent conveyances. Such a challenge, if successful, may have a negative impact on the distributions on your certificates. See ‘‘DESCRIPTION OF THE MORTGAGE POOL—Assignment of the Mortgage Loans; Repurchases and Substitutions’’ and ‘‘—Representations and Warranties; Repurchases and Substitutions’’ in this prospectus supplement and ‘‘DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS—Representations and Warranties; Repurchases’’ in the accompanying prospectus.
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DESCRIPTION OF THE MORTGAGE POOL
General
The pool of mortgage loans included in the Trust Fund (the ‘‘Mortgage Pool’’) is expected to consist of 263 fixed rate mortgage loans (the ‘‘Mortgage Loans’’), with an aggregate principal balance (the ‘‘Cut-Off Date Pool Balance’’) of $7,903,498,737. The ‘‘Cut-Off Date’’ for (i) 261 of the Mortgage Loans is March 11, 2007, (ii) 1 of the Mortgage Loans is March 1, 2007, and (iii) 1 of the Mortgage Loans is March 8, 2007. The ‘‘Cut-Off Date Balance’’ of each Mortgage Loan will equal the unpaid principal balance thereof as of the related Cut-Off Date, after reduction for all payments of principal due on or before such date, whether or not received. The Mortgage Pool will be deemed to consist of 2 loan groups (‘‘Loan Group 1’’ and ‘‘Loan Group 2’’ and, together, the ‘‘Loan Groups’’). Loan Group 1 will consist of (i) all of the Mortgage Loans that are not secured by multifamily properties. Loan Group 1 is expected to consist of 212 Mortgage Loans, with an aggregate Cut-Off Date Balance of $5,613,819,111 (the ‘‘Cut-Off Date Group 1 Balance’’). Loan Group 2 will consist of 51 Mortgage Loans that are secured by multifamily properties, with an aggregate Cut-Off Date Balance of $2,289,679,626 (the ‘‘Cut-Off Date Group 2 Balance’’ and, together with the Cut-Off Date Group 1 Balance, the ‘‘Cut-Off Date Group Balances’’). Annex A-1 to this prospectus supplement sets forth the Loan Group designation with respect to each Mortgage Loan. The Cut-Off Date Balances of all of the Mortgage Loans in the Mortgage Pool range from $860,000 to $1,500,000,000. The Mortgage Loans in the Mortgage Pool have an average Cut-Off Date Balance of $30,051,326. The Cut-Off Date Balances of the Mortgage Loans in Loan Group 1 range from $860,000 to $536,000,000. The Mortgage Loans in Loan Group 1 have an average Cut-Off Date Balance of $26,480,279. The Cut-Off Date Balances of the Mortgage Loans in Loan Group 2 range from $1,300,000 to $1,500,000,000. The Mortgage Loans in Loan Group 2 have an average Cut-Off Date Balance of $44,895,679. References to percentages of Mortgaged Properties referred to in this prospectus supplement without further description are references to the percentages of the Cut-Off Date Pool Balance represented by the aggregate Cut-Off Date Balance of the related Mortgage Loans and references to percentages of Mortgage Loans in a particular Loan Group without further description are references to the related Cut-Off Date Group Balance. The descriptions in this prospectus supplement of the Mortgage Loans and the Mortgaged Properties are based upon the pool of Mortgage Loans as it is expected to be constituted as of the close of business on the Closing Date, assuming that (1) all scheduled principal and/or interest payments due on or before the Cut-Off Date will be made, and (2) there will be no principal prepayments on or before the Cut-Off Date.
All percentages of the Mortgage Loans or any specified group of Mortgage Loans referred to in this prospectus supplement are approximate percentages. All numerical and statistical information presented in this prospectus supplement (including Cut-Off Date Balances, cut-off date balance per square foot/room/unit/pad, loan-to-value ratios and debt service coverage ratios) with respect to the Co-Lender Loans are calculated without regard to the related Subordinate Companion Loans or, with respect to the Peter Cooper Village & Stuyvesant Town Loan, any future Pari Passu Companion Loan, if any; provided that with respect to the Peter Cooper Village & Stuyvesant Town Loan, the Five Times Square Loan, the State Street Financial Center Loan and the 485 Lexington Avenue Loan, numerical and statistical information presented herein with respect to loan balance per square foot/room/unit, loan-to-value ratios and debt service coverage ratios reflect its Pari Passu Companion Loan, as well as the Mortgage Loan itself.
All of the Mortgage Loans are evidenced by a promissory note (each, a ‘‘Mortgage Note’’) and are secured by a mortgage, deed of trust or other similar security instrument (each, a ‘‘Mortgage’’) that creates a first mortgage lien on a fee simple estate or, with respect to 15 Mortgaged Properties, representing, by allocated loan amount, approximately 12.8% of the Cut-Off Date Pool Balance (14 Mortgaged Properties in Loan Group 1 or 18.0% and 1 Mortgaged Property in Loan Group 2 or 0.2%) by allocated loan amount on a portion or all of a leasehold estate in an income-producing real property (each, a ‘‘Mortgaged Property’’).
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Set forth below are the number of Mortgage Loans, and the approximate percentage of the Cut-Off Date Pool Balance represented by such Mortgage Loans that are secured by Mortgaged Properties operated for each indicated purpose:
Mortgaged Properties by Property Type(1)
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Property Type | ![]() | ![]() | Number of Mortgaged Properties | ![]() | ![]() | Aggregate Cut-Off Date Balance | ![]() | ![]() | Percentage of Initial Pool Balance | ![]() | ![]() | Percentage of Group 1 Pool Balance | ![]() | ![]() | Percentage of Group 2 Pool Balance | |||||||||||||||
Office | ![]() | ![]() | ![]() | ![]() | 82 | ![]() | ![]() | ![]() | ![]() | $ | 3,397,538,675 | ![]() | ![]() | ![]() | ![]() | ![]() | 43.0 | % | ![]() | ![]() | ![]() | ![]() | 60.5 | % | ![]() | ![]() | ![]() | ![]() | 0.0 | % |
Multifamily | ![]() | ![]() | ![]() | ![]() | 54 | ![]() | ![]() | ![]() | ![]() | ![]() | 2,289,679,626 | ![]() | ![]() | ![]() | ![]() | ![]() | 29.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 100.0 | ![]() |
Retail | ![]() | ![]() | ![]() | ![]() | 90 | ![]() | ![]() | ![]() | ![]() | ![]() | 895,588,411 | ![]() | ![]() | ![]() | ![]() | ![]() | 11.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 16.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Retail – Anchored | ![]() | ![]() | ![]() | ![]() | 36 | ![]() | ![]() | ![]() | ![]() | ![]() | 642,666,495 | ![]() | ![]() | ![]() | ![]() | ![]() | 8.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 11.4 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Retail – Single Tenant | ![]() | ![]() | ![]() | ![]() | 30 | ![]() | ![]() | ![]() | ![]() | ![]() | 148,371,830 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.9 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.6 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Retail – Unanchored | ![]() | ![]() | ![]() | ![]() | 13 | ![]() | ![]() | ![]() | ![]() | ![]() | 56,385,217 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Retail – Shadow Anchored(2) | ![]() | ![]() | ![]() | ![]() | 11 | ![]() | ![]() | ![]() | ![]() | ![]() | 48,164,869 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.6 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.9 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Hospitality | ![]() | ![]() | ![]() | ![]() | 18 | ![]() | ![]() | ![]() | ![]() | ![]() | 409,119,656 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.2 | ![]() | ![]() | ![]() | ![]() | ![]() | 7.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Mixed Use | ![]() | ![]() | ![]() | ![]() | 8 | ![]() | ![]() | ![]() | ![]() | ![]() | 340,696,297 | ![]() | ![]() | ![]() | ![]() | ![]() | 4.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 6.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Industrial | ![]() | ![]() | ![]() | ![]() | 50 | ![]() | ![]() | ![]() | ![]() | ![]() | 294,885,179 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Self Storage | ![]() | ![]() | ![]() | ![]() | 22 | ![]() | ![]() | ![]() | ![]() | ![]() | 139,150,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Land(3) | ![]() | ![]() | ![]() | ![]() | 2 | ![]() | ![]() | ![]() | ![]() | ![]() | 101,396,894 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Healthcare | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 32,500,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.4 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.6 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
Mobile Home Park | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 2,944,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.1 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.0 | ![]() |
![]() | ![]() | ![]() | ![]() | 328 | ![]() | ![]() | ![]() | ![]() | $ | 7,903,498,737 | ![]() | ![]() | ![]() | ![]() | ![]() | 100.0 | % | ![]() | ![]() | ![]() | ![]() | 100.0 | % | ![]() | ![]() | ![]() | ![]() | 100.0 | % | |
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(1) | Because this table presents information relating to the Mortgaged Properties and not the Mortgage Loans, the information for the Mortgage Loans secured by more than one Mortgaged Property is based on allocated loan amounts (allocating the Mortgage Loan principal balance to each of those properties by the appraised values of the Mortgaged Properties or the allocated loan amount (or specified release prices) as detailed in the related Mortgage Loan documents). |
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(2) | A Mortgaged Property is classified as ‘‘shadow anchored’’ if it is located in close proximity to an anchored retail property. |
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(3) | As of origination of the related Mortgage Loan 1 Mortgaged Property was improved with an office building and the other was improved with a retail bank, however they are not part of the collateral for the related Mortgaged Property. |
Mortgaged Properties by Property Type
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Mortgage Loan Selection Process
All of the Mortgage Loans were selected based on various considerations concerning the Mortgage Pool in an effort to maximize the execution of the Certificates, including the Non-Offered Certificates, and create a diverse Mortgage Pool. Such considerations include, but are not limited to, the property types that serve as collateral for the Mortgage Loans, the principal balance of the Mortgage Loans, the geographic location of such properties, the sponsor of each Mortgage Loan and certain financial characteristics of the Mortgage Loans, such as debt service coverage ratios and loan-to-value ratios. For a description of the types of underlying Mortgage Loans included in the Trust Fund and a description of the material terms of such underlying Mortgage Loans, see ‘‘DESCRIPTION OF THE MORTGAGE POOL’’ in this prospectus supplement.
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Mortgage Loan History
All of the Mortgage Loans will be acquired on the Closing Date by the Depositor from the Mortgage Loan Sellers. Wachovia Bank, National Association (‘‘Wachovia’’), in its capacity as a Mortgage Loan Seller, originated 195 of the Mortgage Loans to be included in the Trust Fund, representing 88.7% of the Cut-Off Date Pool Balance (156 Mortgage Loans in Loan Group 1 or 86.4% of the Cut-Off Date Group 1 Balance and 39 Mortgage Loans in Loan Group 2 or 94.4% of the Cut-Off Date Group 2 Balance), 1 of which Mortgage Loans was co-originated with Column Financial, Inc. (‘‘Column’’) and Morgan Stanley Mortgage Capital Inc. (‘‘Morgan Stanley’’) (in which Wachovia retained a 40% interest). Artesia Mortgage Capital Corporation (‘‘Artesia’’) originated 68 of the Mortgage Loans to be included in the Trust Fund, representing 9.5% of the Cut-Off Date Pool Balance (56 Mortgage Loans in Loan Group 1 or 11.2% of the Cut-Off Date Group 1 Balance and 12 Mortgage Loans in Loan Group 2 or 5.6% of the Cut-Off Date Group 2 Balance). Column co-originated with Wachovia and Morgan Stanley. One (1) of the Mortgage Loans to be included in the Trust Fund (in which Column retained a 30% interest), representing 1.7% of the Cut-Off Date Pool Balance (2.4% of the Cut-Off Date Group 1 Balance). None of the Mortgage Loans were 30 days or more delinquent as of the Cut-Off Date, and no Mortgage Loan has been 30 days or more delinquent during the 12 months preceding the Cut-Off Date (or since the date of origination if such Mortgage Loan has been originated within the past 12 months). A Mortgage Loan is generally considered delinquent if the full contractual payment is not received on the related Due Date, in all instances, taking into account any applicable grace periods.
Certain Terms and Conditions of the Mortgage Loans
Mortgage Rates; Calculations of Interest. All of the Mortgage Loans bear interest at rates (each a ‘‘Mortgage Rate’’) that will remain fixed for their remaining terms; provided, however, after the applicable Anticipated Repayment Date, the interest rate on the related ARD Loans will increase as described in this prospectus supplement. See ‘‘—Amortization’’ below. Two hundred sixty-two (262) of the Mortgage Loans, representing 99.8% of the Cut-Off Date Pool Balance (211 Mortgage Loans in Loan Group 1 or 99.7% of the Cut-Off Date Group 1 Balance and all of the Mortgage Loans in Loan Group 2), accrue interest on the basis of the actual number of days elapsed over a 360-day year (an ‘‘Actual/360 basis’’). One (1) of the Mortgage Loans, representing 0.2% of the Cut-Off Date Pool Balance (0.3% of the Cut-Off Date Group 1 Balance), accrue interest on the basis of a 360-day year consisting of 12 thirty-day months (a ‘‘30/360 basis’’). These Mortgage Loans are sometimes referred to in this prospectus supplement as the ‘‘30/360 Mortgage Loans’’. Ninety-seven (97) of the Mortgage Loans, representing 22.3% of the Cut-Off Date Pool Balance (87 Mortgage Loans in Loan Group 1 or 28.9% of the Cut-Off Date Group 1 Balance and 10 Mortgage Loans in Loan Group 2 or 6.2% of the Cut-Off Date Group 2 Balance), have periods during which only interest is due and periods in which principal and interest are due. One hundred sixteen (116) of the Mortgage Loans, representing 73.3% of the Cut-Off Date Pool Balance (81 Mortgage Loans in Loan Group 1 or 65.5% of the Cut-Off Date Group 1 Balance and 35 Mortgage Loans in Loan Group 2 or 92.3% of the Cut-Off Date Group 2 Balance), are interest-only for their entire term.
Mortgage Loan Payments. Scheduled payments of principal and/or interest other than Balloon Payments (the ‘‘Periodic Payments’’) on all of the Mortgage Loans are due monthly.
Due Dates. Generally, the Periodic Payment for each Mortgage Loan is due on the date (each such date, a ‘‘Due Date’’) occurring on the 11th day of the month (or in the case of 1 Mortgage Loan, the 1st day of the month and in the case of 1 Mortgage Loan, the 8th day of the month). No Mortgage Loan has a grace period that extends payment beyond the 11th day of any calendar month other than 2 Mortgage Loans, representing 1.0% of the Cut-Off Date Pool Balance (1.4% of the Cut-Off Date Group 1 Balance) which have a twice-per-year grace period that may extend payment until the 16th day of any calendar month and 1 Mortgage Loan representing 0.1% of the Cut-Off Date Pool Balance (0.1% of the Cut-Off Date Group 1 Balance) which has a once-per-year grace period that may extend payment until the 14th day of any calendar month.
Amortization. Two hundred sixty one (261) of the Mortgage Loans, representing 99.9% of the Cut-Off Date Pool Balance (210 Mortgage Loans in Loan Group 1 or 99.9% of the Cut-Off Date Group 1 Balance and all of the Mortgage Loans in Loan Group 2) provide for Periodic Payments based on
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amortization schedules significantly longer than their respective terms to maturity (the ‘‘Balloon Loans’’), in each case with payments on their respective scheduled maturity dates of principal amounts outstanding (each such amount, together with the corresponding payment of interest, a ‘‘Balloon Payment’’). One hundred sixteen (116) of these Mortgage Loans, representing 73.3% of the Cut-Off Date Pool Balance (81 Mortgage Loans in Loan Group 1 or 65.5% of the Cut-Off Date Group 1 Balance and 35 Mortgage Loans in Loan Group 2 or 92.3% of the Cut-Off Date Group 2 Balance), provide for interest-only Periodic Payments for the entire term and do not amortize.
Eighteen (18) of the Balloon Loans (the ‘‘ARD Loans’’), representing 1.8% of the Cut-Off Date Pool Balance (15 Mortgage Loans in Loan Group 1 or 1.5% of the Cut-Off Date Group 1 Balance and 3 Mortgage Loans in Loan Group 2 or 2.5% of the Cut-Off Date Group 2 Balance), provide that if the unamortized principal amount thereof is not repaid on a date set forth in the related Mortgage Note (the ‘‘Anticipated Repayment Date’’), the Mortgage Loan will accrue additional interest (the ‘‘Additional Interest’’) at the rate set forth therein and the borrower will be required to apply excess monthly cash flow (the ‘‘Excess Cash Flow’’) generated by the Mortgaged Property (as determined in the related Mortgage Loan documents) to the repayment of principal outstanding on the Mortgage Loan. On or before the Anticipated Repayment Date, the ARD Loans generally require the related borrower to enter into a cash management agreement whereby all Excess Cash Flow will be deposited directly into a lockbox account. Thirteen (13) of these ARD Loans, representing 1.4% of the Cut-Off Date Pool Balance (10 Mortgage Loans in Loan Group 1 or 1.0% of the Cut-Off Date Group 1 Balance and 3 Mortgage Loans in Loan Group 2 or 2.5% of the Cut-Off Date Group 2 Balance), provide for monthly payments of interest only until the related Anticipated Repayment Date and do not provide for any amortization of principal before the related Anticipated Repayment Date. Any amount received in respect of Additional Interest will be distributed to the holders of the Class Z Certificates. Generally, Additional Interest will not be included in the calculations of the Mortgage Rate for a Mortgage Loan, and will only be paid after the outstanding principal balance of the Mortgage Loan together with all interest thereon at the Mortgage Rate has been paid. With respect to such Mortgage Loans, no Prepayment Premiums or Yield Maintenance Charges will be due in connection with any principal prepayment after the Anticipated Repayment Date.
Ninety-seven (97) of the Balloon Loans and ARD Loans, representing 22.3% of the Cut-Off Date Pool Balance (87 mortgage loans in Loan Group 1 or 28.9% of the Cut-Off Date Group 1 Balance or 10 Mortgage Loans in Loan Group 2 or 6.2% of the Cut-Off Date Group 2 Balance), provide for monthly payments of interest only for the first 12 to 84 months in the case of Loan Group 1 and 24 to 84 in the case of Loan Group 2 followed by payments which amortize a portion of the principal balance of the Mortgage Loans by their related maturity dates or Anticipated Repayment Dates, as applicable, but not the entire principal balance of the Mortgage Loans. Thirteen (13) of the Balloon Loans and ARD Loans, representing 1.4% of the Cut-Off Date Pool Balance (10 Mortgage Loans in Loan Group 1 or 1.0% of the Cut-Off Date Group 1 Balance and 3 Mortgage Loans in Loan Group 2 or 2.5% of the Cut-Off Date Group 2 Balance), provide for monthly payments of interest only until maturity or ARD and do not provide for any amortization of principal. One (1) of the ARD Loans, representing 0.1% of the Cut-Off Date Pool Balance (0.1% of the Cut-Off Date Group 1 Balance), provide for payments throughout their respective terms which amortize a portion of the principal balance by their related Anticipated Repayment Dates, but not the entire principal balance of the Mortgage Loans.
Prepayment Provisions. As of the Cut-Off Date, all of the Mortgage Loans restrict or prohibit voluntary principal prepayment. In general, all of the Mortgage Loans either (i) prohibit prepayment for most of the term of the Mortgage Loan but permit defeasance after a date specified in the related Mortgage Note for all or most of the remaining term (204 Mortgage Loans or 86.3% of the Cut-Off Date Pool Balance (167 Mortgage Loans in Loan Group 1 or 85.8% of the Cut-Off Date Group 1 Balance and 37 Mortgage Loans in Loan Group 2 or 87.6% of the Cut-Off Date Group 2 Balance)); (ii) prohibit prepayment until a date specified in the related Mortgage Note and then impose a Yield Maintenance Charge for most or all of the remaining term (33 Mortgage Loans or 6.0% of the Cut-Off Date Pool Balance (25 Mortgage Loans in Loan Group 1 or 6.5% of the Cut-Off Date Group 1 Balance and 8 Mortgage Loans in Loan Group 2 or 4.7% of the Cut-Off Date Group 2 Balance)); (iii) impose a Yield Maintenance Charge for most or all of the term of the Mortgage Loan (13 Mortgage Loans or 2.9% of the Cut-Off Date Pool Balance (9 Mortgage Loans in Loan Group 1 or 2.1% of the Cut-Off Date Group 1
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Balance and 4 Mortgage Loans in Loan Group 2 or 5.0% of the Cut-Off Date Group 2 Balance)); (iv) impose a Yield Maintenance Charge for most or all of the term of the Mortgage Loan, but permit defeasance for most or all of the remaining term (1 Mortgage Loan or 0.2% of the Cut-Off Date Pool Balance (0.2% of the Cut-Off Date Group 1 Balance) and; (v) prohibit prepayment until a date specified in the related Mortgage Note, but permit defeasance for most or all of the remaining term, or impose a Yield Maintenance Charge for most or all of the term of the Mortgage Loan (9 Mortgage Loans or 2.8% of the Cut-Off Date Pool Balance (7 Mortgage Loans in Loan Group 1 or 2.8% of the Cut-Off Date Group 1 Balance and 2 Mortgage Loans in Loan Group 2 or 2.8% of the Cut-Off Date Group 2 Balance); or (vi) impose a Yield Maintenance Charge for most or all of the term of the related Mortgage Loan, but permit defeasance for most or all of the related Mortgage Loan, or impose a Yield Maintenance Charge for most or all of the term of the Mortgage Loan (3 Mortgage Loans or 1.8% of the Cut-Off Date Pool Balance (2.6% of the Cut-Off Date Group 1 Balance)); provided that for purposes of each of the foregoing, ‘‘remaining term’’ refers to either the remaining term to maturity or the Anticipated Repayment Date, as applicable, of the related Mortgage Loan. See ‘‘—Additional Mortgage Loan Information’’ in this prospectus supplement. Prepayment Premiums and Yield Maintenance Charges, if and to the extent collected, will be distributed as described under ‘‘DESCRIPTION OF THE CERTIFICATES—Distributions—Allocation of Prepayment Premiums and Yield Maintenance Charges’’ in this prospectus supplement. The Depositor makes no representation as to the enforceability of the provisions of any Mortgage Note requiring the payment of a Prepayment Premium or Yield Maintenance Charge, or of the collectibility of any Prepayment Premium or Yield Maintenance Charge.
Certain state laws limit the amounts that a mortgagee may collect from a borrower as an additional charge in connection with the prepayment of a mortgage loan. The Mortgage Loans generally do not require the payment of Prepayment Premiums or Yield Maintenance Charges in connection with a prepayment, in whole or in part, of the related Mortgage Loan as a result of or in connection with a total casualty or condemnation. Furthermore, the enforceability, under the laws of a number of states, of provisions providing for payments comparable to the Prepayment Premiums and/or Yield Maintenance Charges upon an involuntary prepayment is unclear. No assurance can be given that, at the time a Prepayment Premium or Yield Maintenance Charge is required to be made on a Mortgage Loan in connection with an involuntary prepayment, any obligation to pay such Prepayment Premium or Yield Maintenance Charge will be enforceable under applicable state law.
The Mortgage Loans included in the Trust Fund provide that, in the event of a partial prepayment of such Mortgage Loan due to the receipt of insurance proceeds or a condemnation award in connection with a casualty or condemnation, the monthly debt service payment of such Mortgage Loan will remain unchanged. See ‘‘RISK FACTORS—The Offered Certificates—Prepayments Will Affect Your Yield’’ in this prospectus supplement.
Two hundred seventeen (217) of the Mortgage Loans, representing 91.1% of the Cut-Off Date Pool Balance (178 Mortgage Loans in Loan Group 1 or 91.4% of the Cut-Off Date Group 1 Balance and 39 Mortgage Loans in Loan Group 2 or 90.3% of the Cut-Off Date Group 2 Balance), provide that, in general, under certain conditions, the related borrower will have the right, no earlier than two years following the Closing Date, to substitute a pledge of defeasance collateral (‘‘Defeasance Collateral’’) in exchange for a release of the related Mortgaged Property (or a portion thereof) from the lien of the related Mortgage without the prepayment of the Mortgage Loan or the payment of the applicable Prepayment Premium or Yield Maintenance Charge. Mortgage Loans secured by more than one Mortgaged Property (or multiple parcels or buildings constituting one Mortgaged Property) which provide for partial defeasance generally require that, among other things, (i) prior to the release of a related Mortgaged Property (or a portion thereof), a specified percentage (generally between 100% and 125%) of the allocated loan amount for such Mortgaged Property be defeased and (ii) that certain debt service coverage ratios and loan-to-value ratio tests be satisfied with respect to the remaining Mortgaged Properties (or portion thereof) after the defeasance. See ‘‘Peter Cooper Village & Stuyvesant Town’’ in Annex D to this prospectus supplement. A Mortgage Loan may still be subject to prepayment during any applicable open period notwithstanding that it has been defeased as described in this prospectus supplement.
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In general, Defeasance Collateral is required to consist of United States government obligations that provide for payments on or prior, but as close as possible, to all successive Due Dates and the scheduled maturity date (or the Anticipated Repayment Date in the case of the ARD Loans) (provided that in the case of certain Mortgage Loans, such defeasance payments may cease at the beginning of the open prepayment period with respect to such Mortgage Loan, and the final payment on the Defeasance Collateral may be sufficient to fully prepay the Mortgage Loan), with each such payment being equal to or greater than (with any excess to be returned to the borrower (in some cases, after the related Mortgage Loan is paid in full)) the Periodic Payment due on such date or (i) in the case of a Balloon Loan on the scheduled maturity date, the Balloon Payment, or (ii) in the case of an ARD Loan, the principal balance on its Anticipated Repayment Date. The Pooling and Servicing Agreement requires the Master Servicer or the Special Servicer to require each borrower that proposes to prepay its Mortgage Loan to pledge Defeasance Collateral in lieu of making a prepayment, to the extent the related Mortgage Loan documents enable the Master Servicer or the Special Servicer, as applicable, to make such requirement, but in each case subject to certain conditions, including that the defeasance would not have an adverse effect on the REMIC status of any of the REMICs (accordingly, no defeasance would be required or permitted prior to the second anniversary of the Closing Date). The cash amount a borrower must expend to purchase, or deliver to the Master Servicer in order for the Master Servicer to purchase, such Defeasance Collateral may be in excess of the principal balance of the related Mortgage Loan. There can be no assurances that a court would not interpret such portion of the cash amount that exceeds the principal balance as a form of prepayment consideration and would not take it into account for usury purposes. In some states some forms of prepayment consideration are unenforceable.
For example, with respect to 1 mortgage loan (loan number 108), representing 0.2% of the Cut-Off Date Pool Balance (0.2% of the Cut-Off Date Group 1 Balance), the mortgagee has the option to apply 80% of a $1,573,760 escrow as a prepayment on the related Mortgage Loan in the event the related borrower is not able to develop a retail pad at the related Mortgaged Property within 15 months of the date of origination of the related Mortgage Loan.
See ‘‘YIELD AND MATURITY CONSIDERATIONS—Yield Considerations’’ and the modeling assumptions described in ‘‘YIELD AND MATURITY CONSIDERATIONS—Weighted Average Life’’ in this prospectus supplement.
Generally, neither the Master Servicer nor the Special Servicer is permitted to waive or modify the terms of any Mortgage Loan prohibiting voluntary prepayments during a Lockout Period or requiring the payment of a Prepayment Premium or Yield Maintenance Charge except under the circumstances described in ‘‘SERVICING OF THE MORTGAGE LOANS—Modifications, Waivers and Amendments’’ in this prospectus supplement.
Other Financing. With limited exceptions, all of the Mortgage Loans prohibit the related borrower from encumbering the Mortgaged Property with additional secured debt without the mortgagee’s prior consent and, also with limited exceptions, prohibit the entities with a controlling interest in the related borrower from pledging their interests in such borrower as security for mezzanine debt.
With respect to 11 Mortgage Loans (loan numbers 13, 19, 23, 42, 51, 60, 61, 70, 82, 88 and 117), representing 4.3% of the Cut-Off Date Pool Balance (6 Mortgage Loans in Loan Group 1 or 4.2% of the Cut-Off Date Group 1 Balance and 5 Mortgage Loans in Loan Group 2 or 4.4% of the Cut-Off Date Group 2 Balance), Wachovia Development Corporation, an affiliate of Wachovia Bank, National Association, has an equity interest in the related borrower. See ‘‘RISK FACTORS—Potential Conflicts of Interest’’ in this prospectus supplement.
With respect to 6 Mortgage Loans (loan numbers 25, 35, 49, 76, 109 and 131), representing approximately 2.0% of the Cut-Off Date Pool Balance (5 Mortgage Loans in Loan Group 1 or 2.6% of the Cut-Off Date Group 1 Balance and 1 Mortgage Loan in Loan Group 2 or 0.6% of the Cut-Off Date Group 2 Balance), the related borrower has encumbered the related Mortgaged Property with subordinate debt secured by the related Mortgaged Property.
With respect to 18 Mortgage Loans (loan numbers 1, 2, 9, 13, 18, 19, 23, 42, 46, 47, 51, 55, 60, 61, 70, 82, 88 and 117), representing approximately 34.2% of the Cut-Off Date Pool Balance (12 Mortgage Loans
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in Loan Group 1 or 19.6% of the Cut-Off Date Group 1 Balance and 6 Mortgage Loans in Loan Group 2 or 69.9% of the Cut-Off Date Group 2 Balance), the ownership interests of the direct or indirect owners of the related borrower have been pledged as security for mezzanine debt subject to the terms of an intercreditor agreement entered into in favor of the mortgagee.
With respect to 2 Mortgage Loans (loan numbers 207 and 256), representing approximately 0.1% of the Cut-Off Date Pool Balance (0.1% of the Cut-Off Date Group 1 Balance), the related borrower has incurred additional unsecured debt other than in the ordinary course of business and the related promissory notes contain subordination and standstill provisions or there is a separate subordination and standstill agreement. In the case of loan number 207, the related borrower incurred purchase money debt in the amount of $600,000 that is secured by rents from the Mortgaged Property, subject to a subordination agreement.
With respect to 3 Mortgage Loans (loan numbers 59, 101 and 198), representing approximately 0.5% of the Cut-Off Date Pool Balance (2 Mortgage Loans in Loan Group 1 or 0.3% of the Cut-Off Date Group 1 Balance and 1 Mortgage Loan in Loan Group 2 or 1.1% of the Cut-Off Date Group 2 Balance), the related Mortgage Loan documents provide that under certain circumstances the related borrower may encumber the related Mortgaged Property with subordinate debt in the future.
With respect to 49 Mortgage Loans (loan numbers 8, 12, 14, 17, 19, 24, 25, 44, 46, 48, 49, 50, 54, 58, 61, 63, 71, 86, 92, 96, 103, 104, 107, 119, 124, 132, 133, 134, 138, 143, 148, 154, 156, 160, 163, 166, 168, 171, 174, 178, 179, 191, 193, 223, 225, 226, 240, 248, and 263), representing approximately 13.3% of the Cut-Off Date Pool Balance (36 Mortgage Loans in Loan Group 1 or 15.7% of the Cut-Off Date Group 1 Balance and 13 Mortgage Loans in Loan Group 2 or 7.7% of the Cut-Off Date Group 2 Balance), the related Mortgage Loan documents provide that, under certain circumstances (which may include satisfaction of DSCR and LTV tests) and in certain cases with the consent of the mortgagee, ownership interests in the related borrowers may be pledged as security for mezzanine debt in the future, subject to the terms of a subordination and standstill agreement or intercreditor agreement to be entered into in favor of the mortgagee.
With respect to 1 Mortgage Loan (loan number 1), representing approximately 19.0% of the Cut-Off Date Pool Balance (65.5% of the Cut-Off Date Group 2 Balance), the related Mortgage Loan documents provide that, under certain circumstances, either (a) the related borrower may encumber the related Mortgaged Property with additional pari passu debt in the future, or (b) the entity owning an interest in the related borrower may pledge their interests in the borrower as security for mezzanine debt in the future, with the consent of the mortgagee and subject to the terms of a subordination and standstill agreement to be entered into in favor of the mortgagee. See ‘‘Peter Cooper Village & Stuyvesant Town’’ in Annex D to this prospectus supplement.
With respect to 1 Mortgage Loan (loan number 142) representing approximately 0.1% of the Cut-Off Date Pool Balance (0.2% of the Cut-Off Date Group 1 Balance), the related Mortgage Loan documents provide that under certain circumstances the related borrower may incur additional debt (a) secured by an interest in the related Mortgaged Property and (b) secured by ownership interests in the related borrower pledged as security for such loan.
With respect to 4 Mortgage Loans (loan numbers 105, 114, 204 and 208), representing approximately 0.4% of the Cut-Off Date Pool Balance (0.6% of the Cut-Off Date Group 1 Balance), the related Mortgage Loan documents provide that, under certain circumstances, the related borrowers may incur additional unsecured debt (in addition to unsecured trade payables in customary amounts incurred in the ordinary course of business).
With respect to 1 Mortgage Loan (loan number 211), representing approximately 0.1% of the Cut-Off Date Pool Balance (0.2% of the Cut-Off Date Group 2 Balance), the related Mortgage Loan documents provide that, under certain circumstances (a) the related borrower may incur additional unsecured debt and (b) the related borrower may encumber the related Mortgaged Property with subordinate debt in the future, with the consent of the mortgagee and subject to the terms of a subordination and standstill agreement to be entered into in favor of the mortgagee and the satisfaction of certain financial conditions.
With respect to 3 Mortgage Loans (loan numbers 13, 23 and 189), representing approximately 1.5% of the Cut-Off Date Pool Balance (2.1% of the Cut-Off Date Group 1 Balance), the related Mortgage
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Loan documents provide that, under certain circumstances (a) the related borrower may incur additional unsecured debt and (b) the entity owning an interest in the related borrower may pledge their interests in the borrower as security for mezzanine debt in the future, with the consent of the mortgagee and subject to the terms of a subordination and standstill agreement to be entered into in favor of the mortgagee and the satisfaction of certain financial conditions.
With respect to 1 Mortgage Loan (loan number 207), representing approximately 0.1% of the Cut-Off Date Pool Balance (1 Mortgage Loan in Loan Group 1 or 0.1% of the Cut-Off Date Group 1 Balance), the related borrower incurred purchase money debt in the amount of $600,000 that is secured by rents from the Mortgaged Property, subject to a subordination agreement.
Further, certain of the Mortgage Loans included in the Trust Fund do not prohibit limited partners or other owners of non-controlling interests in the related borrower from pledging their interests in the borrower as security for mezzanine debt. See ‘‘RISK FACTORS—The Mortgage Loans—Additional Debt on Some Mortgage Loans Creates Additional Risks’’ in this prospectus supplement.
In addition, with respect to the Co-Lender Loans, the related Mortgaged Property also secures one or more Companion Loans. See ‘‘Co-Lender Loans’’ in this prospectus supplement.
In addition, with respect to the Co-Lender Loans, the related Mortgaged Property also secures one or more Companion Loans. See ‘‘Co-Lender Loans’’ in this prospectus supplement.
Nonrecourse Obligations. The Mortgage Loans are generally nonrecourse obligations of the related borrowers and, upon any such borrower’s default in the payment of any amount due under the related Mortgage Loan, the holder thereof may look only to the related Mortgaged Property for satisfaction of the borrower’s obligations. In addition, in those cases where recourse to a borrower or guarantor is purportedly permitted, the Depositor has not undertaken an evaluation of the financial condition of any such person, and prospective investors should therefore consider all of the Mortgage Loans to be nonrecourse.
Due-On-Sale and Due-On-Encumbrance Provisions. Substantially all of the Mortgages contain ‘‘due-on-sale’’ and ‘‘due-on-encumbrance’’ clauses that, in general, permit the holder of the Mortgage to accelerate the maturity of the related Mortgage Loan if the borrower sells or otherwise transfers or encumbers the related Mortgaged Property or prohibit the borrower from doing so without the consent of the holder of the Mortgage. However, certain of the Mortgage Loans may permit one or more transfers of the related Mortgaged Property or the transfer of a controlling interest in the related borrower to pre-approved transferees or pursuant to pre-approved conditions (including without limitation, as and to the extent permitted under the related Mortgage Loan documents, transfers to or between borrower affiliates, family members, partners and other co-owners and their affiliates, estate planning transfers and transfers upon death or disability, and transfers to transferees meeting criteria set forth in the related Mortgage Loan documents) without the approval of the mortgagee, and certain Mortgage Loans may not prohibit transfers of limited partnership interests or non-managing member interests in the related borrowers. For example, the terms of 36 Mortgage Loans (loan numbers 5, 14, 18, 35, 42, 51, 56, 59, 60, 61, 65, 66, 70, 76, 88, 103, 108, 109, 117, 120, 122, 125, 126, 128, 131, 142, 146, 151, 178, 188, 192, 199, 200, 212, 246 and 252), representing 11.4% of the Cut-Off Date Pool Balance (25 Mortgage Loans in Loan Group 1 or 12.7% of the Cut-Off Date Group 1 Balance and 11 Mortgage Loans in Loan Group 2 or 8.4% of the Cut-Off Date Group 2 Balance), permit the borrowers to transfer tenant-in-common interests to certain transferees as specified in the related Mortgage Loan documents, or to investors that qualify as ‘‘accredited investors’’ under the Securities Act. In the case of certain mortgage loans, the related borrower is required under the terms of the related loan documents to transfer the mortgaged property to an affiliate in the future that will assume the related mortgage loan. As provided in, and subject to, the Pooling and Servicing Agreement, the Master Servicer or the Special Servicer will determine, in a manner consistent with the servicing standard described under ‘‘SERVICING OF THE MORTGAGE LOANS — General’’ in this prospectus supplement whether to exercise any right the mortgagee may have under any such clause to accelerate payment of the related Mortgage Loan upon, or to withhold its consent to, any transfer or further encumbrance of the related Mortgaged Property.
Cross-Default and Cross-Collateralization of Certain Mortgage Loans; Certain Multi-Property Mortgage Loans. Seven (7) groups of Mortgage Loans are groups of Mortgage Loans that are
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cross-collateralized and/or cross-defaulted with each of the other Mortgage Loans in their respective groups, as indicated in Annex A-5 to this prospectus supplement. Although the Mortgage Loans within each group of cross-collateralized and/or cross-defaulted Mortgage Loans are generally cross-collateralized and/or cross-defaulted with the other Mortgage Loans in such group, the Mortgage Loans in one group are not cross-collateralized or cross-defaulted with the Mortgage Loans in any other group. As of the Closing Date, no Mortgage Loan, except the Co-Lender Loans, will be cross-collateralized or cross-defaulted with any loan that is not included in the Mortgage Pool. See ‘‘RISK FACTORS—Limitations on the Benefits of Cross-Collateralized and Cross-Defaulted Properties’’ in this prospectus supplement. The Master Servicer or the Special Servicer, as the case may be, will determine whether to enforce the cross-default and cross-collateralization rights upon a mortgage loan default with respect to any of these Mortgage Loans. The Certificateholders will not have any right to participate in or control any such determination. No other Mortgage Loans are subject to cross-collateralization or cross-default provisions.
Partial Releases. Certain of the Mortgage Loans permit a partial release of a portion of the related Mortgaged Property not material to the underwriting of the Mortgage Loan at the time of origination, without any prepayment or defeasance of the Mortgage Loan.
One (1) Mortgage Loan (loan number 1), representing 19.0% of the Cut-Off Date Pool Balance (65.5% of the Cut-Off Date Group 2 Balance), permits the release of certain development rights consisting of approximately 700,000 square feet of so called ‘‘excess development floor area ratio’’ associated with the related Mortgaged Property from the lien of the related Mortgage and the other applicable Mortgage Loan documents upon satisfaction of certain conditions, including, without limitation, the payment of an amount equal to the greater of (1) the disposition proceeds related to such rights that are the subject of the sale, exchange, transfer, assignment or other disposition and (2) $225.00 per square foot of rights being released; provided that any such release of development rights prior to the defeasance lockout period must be accompanied by the applicable yield maintenance premium; provided, further, that any disposition paid after the permitted defeasance date will be allocated pro rata between the Peter Cooper Village & Stuyvesant Town Loan and each of the related mezzanine loans. With respect to such Mortgage Loan, the related Mortgage Loan documents also permit a release of individual parcels subject to casualty, or condemnation, upon satisfaction of certain conditions, including, without limitation:
(i) payment of an amount equal to 110% of the fair market value of the release parcel immediately prior to such damage, destruction or taking;
(ii) the debt service coverage ratio immediately following such partial release with respect to the related Mortgaged Property that remains subject to the related Mortgage is not less than 1.00x;
(iii) the loan to value ratio immediately following such partial release with respect to the related Mortgaged Property that remains subject to the related Mortgage is not greater than seventy percent (70%); and
(iv) receipt of written confirmation from the rating agencies that the proposed partial release will not result in a qualification, downgrade or withdrawal of any of the then current ratings of the Certificates.
Each related release of a building or parcel (other than in connection with a condemnation) is subject to the remainder of the related Mortgaged Property related to the Peter Cooper Village & Stuyvesant Town Loan (i) for the first 10 releases (including development rights releases and releases in connection with partial defeasance), having a DSCR of not less than the lesser of (A) DSCR immediately prior to the release and (B) 1.00x, and (ii) for each release thereafter, a DSCR of not less than 1.00x and in each instance after the release of 10 buildings or parcels (including development rights releases and releases in connection with partial defeasance), a LTV ratio of not more than 70%. Any prepayment received in connection with a release will be applied pro rata to each of the mortgage notes based on the principal amount evidenced by each such note.
Thirteen (13) of the Mortgage Loans (loan numbers 1, 13, 16, 18, 19, 20, 21, 23, 29, 47, 63, 73 and 114), representing 25.5% of the Cut-Off Date Pool Balance (12 Mortgage Loans in Loan Group 1 or 9.1% of the Cut-Off Date Group 1 Balance and 1 Mortgage Loan in Loan Group 2 or 65.5% of the Cut-Off Date
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Group 2 Balance), permit a partial release of a portion or portions of the related Mortgaged Property or one or more entire Mortgaged Property in the case of a multi-property loan; provided that among other things, (i) prior to the release of the portion or portions of the related Mortgaged Property or one or more entire Mortgaged Properties in the case of a multi-property loan, a specified percentage (generally between 100% and 120%) of the allocated loan amount for such released Mortgaged Property(ies) or portion(s) of a Mortgaged Property may be prepaid or partially defeased, or alternatively, partial defeasance of an amount specified in the related Mortgage Loan documents and (ii) certain DSC Ratio and LTV tests are satisfied at the time of the partial release with respect to the remaining portion of the related Mortgaged Property after the partial release.
Four (4) of the Mortgage Loans (loan numbers 8, 67, 151 and 207), representing 2.8% of the Cut-Off Date Pool Balance (3 Mortgage Loans in Loan Group 1 or 3.8% of the Cut-Off Date Group 1 Balance and 1 Mortgage Loan in Loan Group 2 or 0.3% of the Cut-Off Date Group 2 Balance), permit a partial release of a material portion of the related Mortgaged Property without partial defeasance or prepayment of the related Mortgage Loan; provided that certain DSCR and/or LTV tests are satisfied at the time of the partial release with respect to the remaining portion of the related Mortgaged Property after the partial release.
Substitutions. Certain of the Mortgage Loans permit the related borrowers to substitute Mortgaged Properties of like kind and quality for the properties securing the related Mortgage Loans, upon mortgagee consent and subject to certain conditions, including LTV tests and DSC tests, and, in certain cases, the related Mortgage Loan documents also provide for the delivery of an opinion of counsel that the proposed substitution will not adversely affect the REMIC status of the Trust Fund and written confirmation from the Rating Agencies that any ratings of the Certificates will not, as a result of the proposed substitution, be downgraded, qualified or withdrawn. See ‘‘RISK FACTORS—The Mortgage Loans—Substitution of Mortgaged Properties May Lead to Increased Risks’’ in this prospectus supplement.
Certain State-Specific Considerations
Nineteen (19) of the Mortgaged Properties, representing by allocated loan amount approximately 40.7% of the Cut-Off Date Pool Balance (16 Mortgaged Properties in Loan Group 1 or 30.4% of the Cut-Off Date Group 1 Balance and 3 Mortgaged Properties in Loan Group 2 or 66.0% of the Cut-Off Date Group 2 Balance) are located in New York. As a result of this concentration, any adverse economic impact on the New York area may have a more pronounced effect on certificateholders as compared with a similar economic impact on other geographical areas.
In addition, laws related to foreclosure may be more or less favorable to lenders depending on the state. New York law requires a mortgagee to elect either a foreclosure action or a personal action against the borrower, and to exhaust the security under the mortgage, or exhaust its personal remedies against the borrower, before it may bring the other such action. The practical effect of the election requirement is that mortgagees will usually proceed first against the security rather than bringing personal action against the borrower. Other statutory provisions limit any deficiency judgment against the former borrower following a judicial sale to the excess of the outstanding debt over the fair market value of the property at the time of the public sale. The purpose of these statutes is generally to prevent a mortgagee from obtaining a large deficiency judgment against the former borrower as a result of low bids or the absence of bids at the judicial sale.
Thirty-eight (38) of the Mortgaged Properties, representing, by allocated loan amount, approximately 10.4% of the Cut-Off Date Pool Balance (30 Mortgaged Properties in Loan Group 1 or 11.4% of the Cut-Off Date Group 1 Balance and 8 Mortgaged Properties in Loan Group 2 or 7.9% of the Cut-Off Date Group 2 Balance), are located in the state of California. Thirty-one (31) of these Mortgaged Properties, representing, by allocated loan amount, approximately 9.4% of the Cut-Off Date Pool Balance (24 Mortgaged Properties in Loan Group 1 or 10.1% of the Cut-Off Date Group 1 Balance and 7 Mortgaged Properties in Loan Group 2 or 7.8% of the Cut-Off Date Group 2 Balance), are located in southern California. During the past several years, California’s economy has benefited from a continued rise in residential home prices, increased investment in technology and software equipment and a strong office
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leasing market. There can be no assurances, however, that such economic growth will continue. Additionally, rising energy prices, increasing consumer debt and decreasing prices of residential homes could slow the growth of the southern California economy. Further, a weakening of the southern California office leasing market in particular, may adversely affect the related mortgaged properties’ operation and could lessen their market value. Conversely, a strong market could lead to increased building and increased competition for tenants. In either case, there could be an adverse effect on the operation of the mortgage loans and consequently the amount and timing of distributions on the certificates.
Assessments of Property Condition
Property Inspections. Generally, the Mortgaged Properties were inspected by or on behalf of the Mortgage Loan Sellers in connection with the origination or acquisition of the related Mortgage Loans to assess their general condition. No inspection revealed any patent structural deficiency or any deferred maintenance considered material and adverse to the value of the Mortgaged Property as security for the related Mortgage Loan, except in such cases where adequate reserves have been established.
Appraisals. All of the Mortgaged Properties were appraised by a state-certified appraiser or an appraiser belonging to the Appraisal Institute in accordance with the Federal Institutions Reform, Recovery and Enforcement Act of 1989. The primary purpose of each appraisal was to provide an opinion as to the market value of the related Mortgaged Property. There can be no assurance that another appraiser would have arrived at the same opinion of market value. In addition, with respect to 20 Mortgaged Properties securing 20 Mortgage Loans (loan numbers 9, 19.01, 21, 27, 32, 33, 36, 37, 38, 43, 67, 109, 123, 124, 125, 130, 133, 145, 184 and 190), representing, by allocated loan amount, approximately 7.8% of the Cut-Off Date Pool Balance (14 Mortgaged Properties in Loan Group 1 or 8.4% of the Cut-Off Date Group 1 Balance and 6 Mortgaged Properties in Loan Group 2 or 6.3% of the Cut-Off Date Group 2 Balance), the appraised value represented is the ‘‘as-stabilized’’ value. See also ‘‘RISK FACTORS—The Mortgage Loans—Inspections and Appraisals May Not Accurately Reflect Value or Condition of Mortgaged Property’’ and ‘‘DESCRIPTION OF THE MORTGAGE POOL—Additional Mortgage Loan Information’’ in this prospectus supplement.
Environmental Assessments. A ‘‘Phase I’’ environmental site assessment was performed by independent environmental consultants with respect to each Mortgaged Property in connection with the origination of the related Mortgage Loans. ‘‘Phase I’’ environmental site assessments generally do not include environmental testing. In certain cases, environmental testing, including in some cases a ‘‘Phase II’’ environmental site assessment as recommended by such ‘‘Phase I’’ assessment, was performed. Generally, in each case where environmental assessments recommended corrective action, the originator of the Mortgage Loan determined that the necessary corrective action had been undertaken in a satisfactory manner, was being undertaken in a satisfactory manner or that such corrective action would be adequately addressed post-closing. In some instances, the originator required that reserves be established to cover the estimated cost of such remediation or an environmental insurance policy was obtained from a third-party. See also ‘‘RISK FACTORS—The Mortgage Loans—Environmental Laws May Adversely Affect the Value of and Cash Flow from a Mortgaged Property’’ in this prospectus supplement.
Engineering Assessments. In connection with the origination of all of the Mortgage Loans except for 1 Mortgage Loan (loan number 10), representing 1.3% of the Cut-Off Date Pool Balance (1.8% of the Cut-Off Date Group 1 Balance), a licensed engineer or architect inspected the related Mortgaged Property to assess the condition of the structure, exterior walls, roofing, interior structure and mechanical and electrical systems. The resulting reports indicated deferred maintenance items and/or recommended capital improvements on the Mortgaged Properties. Generally, with respect to a majority of Mortgaged Properties, the related borrowers were required to deposit with the mortgagee an amount equal to at least 100% of the licensed engineer’s estimated cost of the recommended repairs, corrections or replacements to assure their completion; provided, however, the mortgagee may waive such required deposits under certain circumstances.
Earthquake Analyses. An architectural and/or engineering consultant performed an analysis on certain Mortgaged Properties located in areas considered to be an earthquake risk, which includes
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California, in order to evaluate the structural and seismic condition of the property and to assess, based primarily on statistical information, the maximum probable loss for the property in an earthquake scenario. The resulting reports concluded that, in the event of an earthquake, 1 Mortgaged Property (loan number 202) representing 0.1% of the Cut-Off Date Pool Balance (0.1% of the Cut-Off Date Group 1 Balance) are likely to suffer a probable maximum loss equal to or in excess of 20% of the amount of the estimated replacement cost of the improvements located on the related Mortgaged Properties. The related Mortgage Loan Seller obtained earthquake insurance to protect against these risks.
Co-Lender Loans
General.
Sixteen (16) Mortgage Loans (loan number 1, the ‘‘Peter Cooper Village & Stuyvesant Town Loan’’, loan number 2, the ‘‘Five Times Square Loan’’, loan number 4, the ‘‘State Street Financial Center Loan’’, loan number 5, the ‘‘485 Lexington Avenue Loan’’, loan number 7, the ‘‘One Congress Street Loan’’, loan number 14, the ‘‘PNC Corporate Plaza Loan’’, loan number 18, the ‘‘Spring Mill Corporate Center Loan’’, loan number 29, the ‘‘Sealy B Pool Loan’’, loan number 33, the ‘‘Eastland Center Loan’’, loan number 45, the ‘‘Tyco International Building Loan’’, loan number 80, the ‘‘Time Warner Building Loan’’, loan number 171, the ‘‘Sandy Retail Center Loan’’, loan number 218, the ‘‘Virginia Village Apartments Loan’’, loan number 159, the ‘‘Gateway Executive Center Loan’’, loan number 43, the ‘‘Morgan Apartments Loan’’, loan number 85, the ‘‘Environmental Technologies Loan’’ (collectively, the ‘‘Co-Lender Loans’’)), are each evidenced by one of two or more notes each secured by a single mortgage and a single assignment of leases and rents. In addition to the Co-Lender Loans, certain other mortgage loans have additional debt. See ‘‘RISK FACTORS—The Mortgage Loans—Additional Debt on Some Mortgage Loans Creates Additional Risks’’ in this prospectus supplement.
The Peter Cooper Village & Stuyvesant Town Loan is part of a split loan structure, which has 5 companion loans (the ‘‘Peter Cooper Village & Stuyvesant Town Pari Passu Companion Loans’’), in which the Peter Cooper Village & Stuyvesant Town Pari Passu Companion Loans are pari passu in right of entitlement to payment with the Peter Cooper Village & Stuyvesant Town Loan. The related Mortgage Loan documents permit the borrower to obtain up to $300,000,000 of any combination of pari passu mortgage debt secured by a second Mortgage on the related Mortgaged Property or subordinate mezzanine debt at any time between November 2011 and May 2013 (the ‘‘Peter Cooper Village & Stuyvesant Town Future Pari Passu Companion Loan’’), subject to the satisfaction of certain conditions set forth in the Mortgage Loan documents, including but not limited to, (i) as of the date the Peter Cooper Village & Stuyvesant Town Future Pari Passu Companion Loan is advanced, the LTV ratio for the Mortgaged Properties then subject to the lien of the Mortgage is equal to or less than 70.0%, (ii) as of the date the Peter Cooper Village & Stuyvesant Town Future Pari Passu Companion Loan is advanced, the DSCR for the related Mortgaged Properties then subject to the lien of the Mortgage is equal to or greater than 1.30x, (iii) receipt of written confirmation from the Rating Agencies that any ratings of the Certificates or any other certificates issued under a securitization in which any Peter Cooper Village & Stuyvesant Town Pari Passu Companion Loan is a part of will not, as a result of the Peter Cooper Village & Stuyvesant Town Future Pari Passu Companion Loan, be downgraded, qualified or withdrawn, and (iv) execution of a co-lender agreement between the lender with respect to the Peter Cooper Village & Stuyvesant Town Future Pari Passu Companion Loan and the holder of the Mortgage Loan, in form and substance reasonably acceptable to the holder of the related Mortgage Loan and the Rating Agencies, which provides, among other things, for pari passu payments with respect to the Mortgage Loan and Peter Cooper Village & Stuyvesant Town Future Pari Passu Companion Loan, but does not provide for any consent or consultation rights to the holder of such Mortgage Loan. The Peter Cooper Village & Stuyvesant Town Loan, the Peter Cooper Village & Stuyvesant Town Pari Passu Companion Loans and the Peter Cooper Village & Stuyvesant Town Future Pari Passu Companion Loan, if applicable, are referred to together herein as the ‘‘Peter Cooper Village & Stuyvesant Town Whole Loan’’. The Peter Cooper Village & Stuyvesant Town Loan has a Cut-Off Date Balance of $1,500,000,000, representing 19.0% of the Cut-Off Date Pool Balance (65.5% of the Cut-Off Date Group 2 Balance). The Peter Cooper Village & Stuyvesant Town Pari Passu Companion Loans and the Peter Cooper Village & Stuyvesant
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Town Future Pari Passu Companion Loan, if applicable, will not be included in the Trust Fund. See ‘‘Peter Cooper Village & Stuyvesant Town’’ in Annex D to this prospectus supplement.
The Five Times Square Loan is part of a split loan structure, which has 3 companion loans (the ‘‘Five Times Square Pari Passu Companion Loans #1 and #2’’ and the ‘‘Five Times Square Subordinate Companion Loan’’), respectively, in which the Five Times Square Pari Passu Companion Loans are pari passu in right of entitlement to payment with the Five Times Square Loan and the Five Times Square Subordinate Companion Loan is subordinate in right of entitlement to payment to the Five Times Square Loan and the Five Times Square Pari Passu Companion Loans #1 and #2. The Five Times Square Pari Passu Companion Loans, the Five Times Square Subordinate Companion Loan and the Five Times Square Loan are referred to collectively herein as the ‘‘Five Times Square Whole Loan’’. The Five Times Square Loan has a Cut-Off Date Balance of $536,000,000, representing 6.8% of the Cut-Off Date Pool Balance (9.5% of the Cut-Off Date Group 1 Balance). Neither the Five Times Square Pari Passu Companion Loan nor the Five Times Square Subordinate Companion Loan will be included in the Trust Fund. See ‘‘Five Times Square’’ in Annex D to this prospectus supplement.
The State Street Financial Center Loan is part of a split loan structure, which has 1 companion loan (the ‘‘State Street Financial Center Pari Passu Companion Loan’’), that is pari passu in its right of entitlement to payment with the State Street Financial Center Loan. The State Street Financial Center Loan has a Cut-Off Date Balance of $387,500,000, representing 4.9% of the Cut-Off Date Pool Balance (6.9% of the Cut-Off Date Group 1 Balance). The State Street Financial Center Pari Passu Companion Loan will not be included in the Trust Fund. See ‘‘State Street Financial Center’’ in Annex D to this prospectus supplement.
The 485 Lexington Avenue Loan is part of a split loan structure, which has 1 companion loan (the ‘‘485 Lexington Avenue Pari Passu Companion Loan’’), that is pari passu in its right of entitlement to payment with the 485 Lexington Avenue Loan. The 485 Lexington Avenue Loan has a Cut-Off Date Balance of $315,000,000, representing 4.0% of the Cut-Off Date Pool Balance (5.6% of the Cut-Off Date Group 1 Balance). A portion of the 485 Lexington Avenue Loan is being sold into the Trust Fund by Wachovia and a portion is being sold into the Trust Fund by Column, each portion being comprised of its own pari passu promissory note that effects a separate interest in the 485 Lexington Avenue Whole Loan, however, for purposes of this prospectus supplement references to the 485 Lexington Avenue Loan include both such pari passu promissory notes and will be considered one interest in the related Mortgage Loan. The 485 Lexington Avenue Pari Passu Companion Loan will not be included in the Trust Fund. See ‘‘485 Lexington Avenue’’ in Annex D to this prospectus supplement.
The One Congress Street Loan, which has 1 companion loan (the ‘‘One Congress Street Subordinate Companion Loan’’), is part of a split loan structure in which the One Congress Street Subordinate Companion Loan is subordinate in its right of entitlement to payment to the One Congress Street Loan. The One Congress Street Loan has a Cut-Off Date Balance of $190,000,000, representing 2.4% of the Cut-Off Date Pool Balance (3.4% of the Cut-Off Date Group 1 Balance). The One Congress Street Subordinate Companion Loan will not be included in the Trust Fund. See ‘‘One Congress Street’’ in Annex D to this prospectus supplement.
The Tyco International Building Loan, which has 1 companion loan (the ‘‘Tyco International Building Subordinate Companion Loan’’ ), is part of a split loan structure in which the Tyco International Building Subordinate Companion Loan is subordinate in its right of entitlement to payment to the Tyco International Building Loan. The Tyco International Building Loan has a Cut-Off Date Balance of $31,200,000, representing 0.4% of the Cut-Off Date Pool Balance (0.6% of the Cut-Off Date Group 1 Balance). The Tyco International Building Subordinate Companion Loan will not be included in the Trust Fund.
The Spring Mill Corporate Center Loan is part of a split loan structure, which has 1 companion loan (the ‘‘Spring Mill Corporate Center Subordinate Companion Loan’’ ) that is subordinate in its right of payment to the Spring Mill Corporate Center Loan. The Spring Mill Corporate Center Loan and the Spring Mill Corporate Center Subordinate Companion Loan are referred to collectively herein as the ‘‘Spring Mill Corporate Center Whole Loan’’. The Spring Mill Corporate Center Loan has a Cut Off Date Balance of $57,100,000, representing 0.7% of the Cut-Off Date Pool Balance (1.0% of the Cut-Off Date
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Group 1 Balance). The Spring Mill Corporate Center Subordinate Companion Loan will not be included in the Trust Fund. See ‘‘Spring Mill Corporate Center’’ in Annex D to this prospectus supplement.
The Eastland Center Loan is part of a split loan structure, which has 1 companion loan (the ‘‘Eastland Center Subordinate Companion Loan’’ ) that is subordinate in its right of payment to the Eastland Center Loan. The Eastland Center Loan and the Eastland Center Subordinate Companion Loan are referred to collectively herein as the ‘‘Eastland Center Whole Loan’’. The Eastland Center Loan has a Cut Off Date Balance of $39,500,000, representing 0.5% of the Cut-Off Date Pool Balance (0.7% of the Cut-Off Date Group 1 Balance). The Eastland Center Subordinate Companion Loan will not be included in the Trust Fund. See ‘‘Eastland Center’’ in Annex D to this prospectus supplement.
The Time Warner Building Loan and the Environmental Technologies Loan (together, the ‘‘Caplease Loans’’) are each part of a split loan structure that has 2 companion loans (together, the ‘‘Caplease Subordinate Companion Loans’’) that are subordinate in their right of entitlement to payment to the related Caplease Loan. Notwithstanding the immediately preceding sentence, the holder of the related Caplease Subordinate Companion Loans has agreed to subordinate its interests in certain respects to the related Caplease Loan, subject to its prior right to receive proceeds of a claim for accelerated future rent payments payable upon a default under the related lease (a ‘‘Defaulted Lease Claim’’). The Caplease Loans, collectively, have a Cut-Off Date Balance of $33,700,000, representing 0.4% of the Cut-Off Date Pool Balance (0.6% of the Cut-Off Date Group 1 Balance). See ‘‘—The Caplease Loans’’ below. Capital Lease Debt Funding, LP (‘‘Caplease’’) is the holder of the Caplease Subordinate Companion Loans, but may elect to sell the Caplease Subordinate Companion Loans at any time. See ‘‘RISK FACTORS—The Offered Certificates—Potential Conflicts of Interest’’ in this prospectus supplement. In addition, Wachovia Bank, National Association owns an equity interest in Caplease and provides financing to Caplease secured by, among other things, the Caplease Subordinate Companion Loans.
The Sealy Pool B Loan, the Sandy Retail Center Loan, the Gateway Executive Center Loan and the Virginia Village Apartments Loan (together, the ‘‘Mezz Cap Loans’’) are each part of a split loan structure with 1 companion loan (together, the ‘‘Mezz Cap Subordinate Companion Loans’’) that are each subordinate to the related right of entitlement to payment to the related Mezz Cap Loan. The Mezz Cap Loans, collectively, have a Cut-Off Date Balance of $59,486,758, representing 0.8% of the Cut-Off Date Pool Balance (3 Mortgage Loans in Loan Group 1 or 1.0% of the Cut-Off Date Group 1 Balance and 1 Mortgage Loan in Loan Group 2 or 0.2% of the Cut-Off-Date Group 2 Balance). See ‘‘—Mezz Cap Loans’’ below.
The Morgan Apartments Loan, which has 1 companion loan (‘‘Morgan Apartments Subordinate Companion Loan’’), is part of a split loan structure in which The Morgan Apartments Subordinate Companion Loan is subordinate in its right of entitlement to payment to The Morgan Apartments Loan. The Morgan Apartments Loan has a Cut-Off Date Balance of $33,250,000, representing 0.4% of the Cut-Off Date Pool Balance (1.5% of the Cut-Off Date Group 2 Balance). The Morgan Apartments Subordinate Companion Loan will not be included in the Trust Fund.
The PNC Corporate Plaza Loan, which has 1 companion loan (the ‘‘PNC Corporate Plaza Subordinate Companion Loan’’), is part of a split loan structure in which the PNC Corporate Plaza Subordinate Companion Loan is subordinate in its right of entitlement to payment to the PNC Corporate Plaza Loan. The PNC Corporate Plaza Loan has a Cut-Off Date Balance of $61,000,000, representing 0.8% of the Cut-Off Date Pool Balance (1.1% of the Cut-Off Date Group 1 Balance). The PNC Corporate Plaza Subordinate Companion Loan will not be included in the Trust Fund. See ‘‘PNC Corporate Plaza’’ in Annex D to this prospectus supplement.
In addition, with respect to 1 Mortgage Loan (loan number 1), the Peter Cooper Village & Stuyvesant Town Loan originated by Wachovia Bank, National Association, the Mortgage Loan documents permit the borrower to obtain up to $300,000,000 of any combination of pari passu mortgage debt secured by a second Mortgage on the related Mortgaged Property or subordinate mezzanine debt at any time between November 2011 and May 2013 (the ‘‘Peter Cooper Village & Stuyvesant Town Future Pari Passu Companion Loan’’), subject to the satisfaction of certain conditions set forth in the Mortgage Loan documents, including but not limited to, (i) as of the date the Peter Cooper Village & Stuyvesant Town Future Pari Passu Companion Loan is advanced, the LTV ratio for the Mortgaged Properties then
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subject to the lien of the Mortgage is equal to or less than 70.0%, (ii) as of the date the Peter Cooper Village & Stuyvesant Town Future Pari Passu Companion Loan is advanced, the DSCR for the Mortgaged Properties then subject to the lien of the Mortgage is equal to or greater than 1.30x, (iii) receipt of written confirmation from the Rating Agencies that any ratings of the Certificates or any other certificates issued under a securitization in which any Peter Cooper Village & Stuyvesant Town Pari Passu Companion Loan is a part of will not, as a result of the Peter Cooper Village & Stuyvesant Town Future Pari Passu Companion Loan, be downgraded, qualified or withdrawn, and (iv) execution of a co-lender agreement between the lender with respect to the Peter Cooper Village & Stuyvesant Town Future Pari Passu Companion Loan and the holder of the Mortgage Loan, in form and substance reasonably acceptable to the holder of the Mortgage Loan and the Rating Agencies, which provides, among other things, for pari passu payments with respect to the Mortgage Loan and Peter Cooper Village & Stuyvesant Town Future Pari Passu Companion Loan, but does not provide for any consent or consultation rights to the holder of such mortgage loan. The Peter Cooper Village & Stuyvesant Town Loan and the Peter Cooper Village & Stuyvesant Town Pari Passu Companion Loans are referred to together herein as the ‘‘Peter Cooper Village & Stuyvesant Town Whole Loan’’. The Peter Cooper Village & Stuyvesant Town Pari Passu Companion Loans and the Peter Cooper Village & Stuyvesant Town Future Pari Passu Companion Loan, if applicable, will not be included in the Trust Fund. See ‘‘Peter Cooper Village & Stuyvesant Town’’ in Annex D to this prospectus supplement.
The Peter Cooper Village & Stuyvesant Town Pari Passu Companion Loans, the Five Times Square Pari Passu Companion Loan, the Five Times Square Subordinate Companion Loan, the State Street Financial Center Pari Passu Companion Loan, the 485 Lexington Avenue Pari Passu Companion Loan, the One Congress Street Subordinate Companion Loan, the Tyco International Building Subordinate Companion Loan, the Spring Mill Corporate Center Subordinate Companion Loan, the Eastland Center, the Morgan Apartments Subordinate Companion Loan, Building Subordinate Companion Loan, the PNC Corporate Plaza Subordinate Companion Loan, the Mezz Cap Subordinate Companion Loan and the Caplease Subordinate Companion Loans are referred to herein as the ‘‘Companion Loans’’. None of the Companion Loans are included in the Trust Fund.
The Peter Cooper Village & Stuyvesant Town Pari Passu Companion Loans, the Five Times Square Pari Passu Companion Loan, the State Street Financial Center Pari Passu Companion Loan and the 485 Lexington Avenue Loan Pari Passu Companion Loan, are referred to herein as the ‘‘Pari Passu Companion Loans’’ and the Peter Cooper Village & Stuyvesant Town Loan, the Five Times Square Loan, the State Street Financial Center Loan and the 485 Lexington Avenue Loan are referred to as the ‘‘Pari Passu Loans’’. The Companion Loans, other than the Pari Passu Companion Loans, are collectively referred to herein as the ‘‘Subordinate Companion Loans’’. Each Mezz Cap Loan, together with its related Mezz Cap Subordinate Companion Loans, is referred to herein as the ‘‘Mezz Cap Whole Loan’’. Each Caplease Loan, together with its related Caplease Subordinate Companion Loans, is referred to herein as a ‘‘Caplease Whole Loan’’. The Peter Cooper Village & Stuyvesant Town Whole Loan, the Five Times Square Whole Loan, the State Street Financial Center Whole Loan, the 485 Lexington Avenue Whole Loan, the One Congress Street Whole Loan, the Tyco International Building Whole Loan, the Spring Mill Corporate Center Whole Loan, the Eastland Center Whole Loan, the Morgan Apartments Whole Loan, the PNC Corporate Plaza, the Mezz Cap Whole Loans and the Caplease Whole Loans are referred to in this prospectus supplement individually as a ‘‘Whole Loan’’ and, collectively, as the ‘‘Whole Loans’’.
The trust fund relating to the LB-UBS Commercial Mortgage Trust 2007-C1, Commercial Mortgage Pass-Through Certificates, Series 2007-C1 transaction (the ‘‘LB-UBS 2007-C1 Transaction’’ and the related trust fund, the ‘‘LB-UBS 2007-C1 Trust Fund’’) is the holder of the State Street Financial Center Pari Passu Companion Loan.
Wachovia Bank, National Association (or one of its affiliates) is the initial holder of the Five Times Square Subordinate Companion Loan, PNC Corporate Plaza Subordinate Companion Loan, Spring Mill Corporate Center Subordinate Companion Loan, Eastland Center Subordinate Companion Loan and the Morgan Apartments Subordinate Companion Loan. Entities that are not affiliated with the Mortgage Loan Sellers are the holders of the Mezz Cap Subordinate Companion Loans and the Caplease Subordinate Companion Loans.
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With respect to the Peter Cooper & Stuyvesant Town Loan, the terms of the related intercreditor agreement (the ‘‘Peter Cooper Village & Stuyvesant Town Intercreditor Agreement’’), provide that the Peter Cooper & Stuyvesant Town Loan and the Peter Cooper & Stuyvesant Town Pari Passu Companion Loan are of equal priority with each other and no portion of either of the loans will have priority or preference over the other.
With respect to the Five Times Square Loan, the terms of one related intercreditor agreement (the ‘‘Five Times Square Pari Passu Intercreditor Agreement’’) provide that the Five Times Square Loan and the Five Times Square Pari Passu Companion Loan are of equal priority with each other and no portion of either the Five Times Square Loan or the Five Times Square Pari Passu Companion Loan will have priority or preference over the other. In addition, the terms of the other related intercreditor agreement (the ‘‘Five Times Square Subordinate Intercreditor Agreement’’ and, together with the Five Times Square Pari Passu Companion Loan, the ‘‘Five Times Square Intercreditor Agreements’’) provide that the Five Times Square Subordinate Companion Loan is subordinate in certain respects to the Five Times Square Loan and the Five Times Square Pari Passu Companion Loan.
With respect to the State Street Financial Center Loan, the terms of the related pari passu intercreditor agreement (the ‘‘State Street Financial Center Pari Passu Intercreditor Agreement’’), provide that the State Street Financial Center Loan and the State Street Financial Center Pari Passu Companion Loan are generally of equal priority with each other and no portion of either of the loans will have priority or preference over the other.
With respect to the 485 Lexington Avenue Loan, the terms of the related intercreditor agreement (the ‘‘485 Lexington Avenue Intercreditor Agreement’’), provide that the 485 Lexington Avenue Loan and the 485 Lexington Avenue Pari Passu Companion Loan are of equal priority with each other and no portion of either of the loans will have priority or preference over the other.
With respect to the One Congress Street Loan, the terms of the related intercreditor agreement (the ‘‘One Congress Street Intercreditor Agreement’’), provide that the One Congress Street Subordinate Companion Loan is subordinate in certain respects to the Congress Street Loan.
With respect to the Tyco International Building Loan, the terms of the related intercreditor agreement (the ‘‘Tyco International Building Intercreditor Agreement’’) provide that the Tyco International Building Subordinate Companion Loan is subordinate in certain respects to the Tyco International Building Loan.
With respect to the Spring Mill Corporate Center Loan, the terms of the related intercreditor agreement (the ‘‘Spring Mill Corporate Center Intercreditor Agreement’’) provide that the Spring Mill Corporate Center Subordinate Companion Loan is subordinate in certain respects to the Spring Mill Corporate Center Loan.
With respect to the Eastland Center Loan, the terms of the related intercreditor agreement (the ‘‘Eastland Center Intercreditor Agreement’’) provide that the Eastland Center Subordinate Companion Loan is subordinate in certain respects to the Eastland Center Loan.
With respect to the Morgan Apartments Loan, the terms of the related intercreditor agreement (the ‘‘Morgan Apartments Intercreditor Agreement’’) provide that the Morgan Apartments Subordinate Companion Loan is subordinate in certain respects to the Morgan Apartments Loan.
With respect to the PNC Corporate Plaza Loan, the terms of the related intercreditor agreement (the ‘‘PNC Corporate Plaza Intercreditor Agreement’’) provide that the PNC Corporate Plaza Subordinate Companion Loan is subordinate in certain respects to the PNC Corporate Plaza Loan.
With respect to each Mezz Cap Loan, the terms of the related intercreditor agreement (each, a ‘‘Mezz Cap Intercreditor Agreement’’) provide that the related Mezz Cap Subordinate Companion Loans are subordinate in certain respects to the related Mezz Cap Loan.
With respect to each Caplease Loan, the terms of the related intercreditor agreement (each, a ‘‘Caplease Intercreditor Agreement’’) provide that the related Caplease Subordinate Companion Loans are subordinate in certain respects to the related Caplease Loan.
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The Peter Cooper & Stuyvesant Town Pari Passu Intercreditor Agreement, the Five Times Square Intercreditor Agreements, the State Street Financial Center Pari Passu Intercreditor Agreement, the 485 Lexington Intercreditor Agreement, the One Congress Street Intercreditor Agreement, the Tyco International Building Intercreditor Agreement, the Spring Mill Corporate Center Intercreditor Agreement, the Eastland Center Intercreditor Agreement, the Morgan Apartments Intercreditor Agreement, the PNC Corporate Plaza Intercreditor Agreement, the Mezz Cap Intercreditor Agreements and the Caplease Intercreditor Agreements are individually referred to in this prospectus supplement as an ‘‘Intercreditor Agreement’’ and, collectively, as the ‘‘Intercreditor Agreements’’.
The following table presents certain information with respect to the Co-Lender Loans:
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Mortgage Loan | ![]() | ![]() | Cut-Off Date Principal Balance of Trust Mortgage Asset | ![]() | ![]() | Cut-Off Date Principal Balance of Senior Mortgage Loan(s) | ![]() | ![]() | Cut-Off Date Principal Balance of Whole Loan | ![]() | ![]() | Whole Loan Underwritten DSCR(1)(2) | ![]() | ![]() | Whole Loan Cut-Off Date LTV Ratio(1) | |||||||||
Peter Cooper Village & Stuyvesant Town Pool | ![]() | ![]() | ![]() | $ | 1,500,000,000 | ![]() | ![]() | ![]() | ![]() | $ | 3,000,000,000 | ![]() | ![]() | ![]() | ![]() | $ | 3,000,000,000 | ![]() | ![]() | ![]() | 1.73x | ![]() | ![]() | 55.6% |
Five Times Square | ![]() | ![]() | ![]() | $ | 536,000,000 | ![]() | ![]() | ![]() | ![]() | $ | 1,072,000,000 | ![]() | ![]() | ![]() | ![]() | $ | 1,139,000,000 | ![]() | ![]() | ![]() | 1.03x | ![]() | ![]() | 85.0% |
State Street Financial Center | ![]() | ![]() | ![]() | $ | 387,500,000 | ![]() | ![]() | ![]() | ![]() | $ | 775,000,000 | ![]() | ![]() | ![]() | ![]() | $ | 775,000,000 | ![]() | ![]() | ![]() | 1.16x | ![]() | ![]() | 87.2% |
485 Lexington Avenue | ![]() | ![]() | ![]() | $ | 315,000,000 | ![]() | ![]() | ![]() | ![]() | $ | 450,000,000 | ![]() | ![]() | ![]() | ![]() | $ | 450,000,000 | ![]() | ![]() | ![]() | 1.20x | ![]() | ![]() | 70.9% |
One Congress Street | ![]() | ![]() | ![]() | $ | 190,000,000 | ![]() | ![]() | ![]() | ![]() | $ | 190,000,000 | ![]() | ![]() | ![]() | ![]() | $ | 208,500,000 | ![]() | ![]() | ![]() | 1.16x | ![]() | ![]() | 80.9% |
PNC Corporate Plaza | ![]() | ![]() | ![]() | $ | 61,000,000 | ![]() | ![]() | ![]() | ![]() | $ | 61,000,000 | ![]() | ![]() | ![]() | ![]() | $ | 65,700,000 | ![]() | ![]() | ![]() | 1.11x | ![]() | ![]() | 83.8% |
Spring Mill Corporate Center(3) | ![]() | ![]() | ![]() | $ | 57,100,000 | ![]() | ![]() | ![]() | ![]() | $ | 57,100,000 | ![]() | ![]() | ![]() | ![]() | $ | 62,100,000 | ![]() | ![]() | ![]() | 1.22x | ![]() | ![]() | 77.8% |
Sealy B Pool | ![]() | ![]() | ![]() | $ | 42,960,000 | ![]() | ![]() | ![]() | ![]() | $ | 42,960,000 | ![]() | ![]() | ![]() | ![]() | $ | 45,642,448 | ![]() | ![]() | ![]() | 1.07x | ![]() | ![]() | 85.0% |
Eastland Center(3) | ![]() | ![]() | ![]() | $ | 39,500,000 | ![]() | ![]() | ![]() | ![]() | $ | 39,500,000 | ![]() | ![]() | ![]() | ![]() | $ | 46,000,000 | ![]() | ![]() | ![]() | 1.23x | ![]() | ![]() | 76.5% |
The Morgan Apartments(3) | ![]() | ![]() | ![]() | $ | 33,250,000 | ![]() | ![]() | ![]() | ![]() | $ | 33,250,000 | ![]() | ![]() | ![]() | ![]() | $ | 35,800,000 | ![]() | ![]() | ![]() | 1.12x | ![]() | ![]() | 83.1% |
Tyco International Building | ![]() | ![]() | ![]() | $ | 31,200,000 | ![]() | ![]() | ![]() | ![]() | $ | 31,200,000 | ![]() | ![]() | ![]() | ![]() | $ | 33,000,000 | ![]() | ![]() | ![]() | 1.14x | ![]() | ![]() | 84.6% |
Time Warner Building | ![]() | ![]() | ![]() | $ | 17,500,000 | ![]() | ![]() | ![]() | ![]() | $ | 17,500,000 | ![]() | ![]() | ![]() | ![]() | $ | 24,575,468 | ![]() | ![]() | ![]() | 0.78x | ![]() | ![]() | 85.3% |
Environmental Technologies | ![]() | ![]() | ![]() | $ | 16,200,000 | ![]() | ![]() | ![]() | ![]() | $ | 16,200,000 | ![]() | ![]() | ![]() | ![]() | $ | 23,087,583 | ![]() | ![]() | ![]() | 0.97x | ![]() | ![]() | 84.6% |
Gateway Executive Center | ![]() | ![]() | ![]() | $ | 6,800,000 | ![]() | ![]() | ![]() | ![]() | $ | 6,800,000 | ![]() | ![]() | ![]() | ![]() | $ | 7,225,000 | ![]() | ![]() | ![]() | 1.26x | ![]() | ![]() | 80.3% |
Sandy Retail Center | ![]() | ![]() | ![]() | $ | 5,886,758 | ![]() | ![]() | ![]() | ![]() | $ | 5,886,758 | ![]() | ![]() | ![]() | ![]() | $ | 6,256,448 | ![]() | ![]() | ![]() | 1.19x | ![]() | ![]() | 84.5% |
Virginia Village Apartments | ![]() | ![]() | ![]() | $ | 3,840,000 | ![]() | ![]() | ![]() | ![]() | $ | 3,840,000 | ![]() | ![]() | ![]() | ![]() | $ | 4,080,000 | ![]() | ![]() | ![]() | 1.12x | ![]() | ![]() | 85.0% |
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(1) | For purposes of determining the DSCRs and LTV ratios with respect to the Peter Cooper Village & Stuyvesant Town Loan, such DSCR and LTV ratio does not include the future Pari Passu Companion Loan. For a discussion of the financial tests and terms related to the funding of the Peter Cooper Village & Stuyvesant Town Future Pari Passu Companion Loan, see ‘‘Peter Cooper Village & Stuyvesant Town’’ in Annex D and ‘‘DESCRIPTION OF THE MORTGAGE POOL—Co-Lender Loans —General’’ in this prospectus supplement. |
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(2) | With respect to the Peter Cooper Village & Stuyvesant Town Loan, the net operating income used to calculate the debt service coverage ratio was determined using future cash flow projections that include various assumptions and using an assumed annual rate of conversion of units from rent-stabilized units to deregulated units. The DSC ratio for the related Mortgaged Property calculated based on the net operating income for year 2006 is 0.58x. See ‘‘RISK FACTORS—Risks Related to Net Cash Flow’’ in this Prospectus Supplement. |
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(3) | Certain of the Mortgage Loans reflect LTV Ratios that have been calculated on an ‘‘as-stabilized’’ basis, or that have LTV Ratios or DSC Ratios that have been adjusted to take into account certain cash reserves or letters of credit. See ‘‘Additional Mortgage Loan Information’’ herein. Also, see ‘‘DESCRIPTION OF THE MORTGAGE POOL—Additional Mortgage Loan Information’’ and ‘‘RISK FACTORS—Risks Relating to Net Cash Flow’’ and ‘‘—Inspections and Appraisals May Not Accurately Reflect Value & Condition of Mortgaged Property’’ in the Prospectus Supplement. |
Peter Cooper Village & Stuyvesant Town Loan
Servicing Provisions of the Peter Cooper Village & Stuyvesant Town Intercreditor Agreement.
With respect to the Peter Cooper Village & Stuyvesant Town Loan, the Master Servicer and the Special Servicer will administer the Peter Cooper Village & Stuyvesant Town Loan and the Peter Cooper Village & Stuyvesant Town Pari Passu Companion Loans pursuant to the Pooling and Servicing Agreement and the Peter Cooper Village & Stuyvesant Town Intercreditor Agreement for so long as the
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Peter Cooper Village & Stuyvesant Town Loan is part of the Trust Fund. The holders of the Peter Cooper Village & Stuyvesant Town Pari Passu Companion Loans will generally share certain of the rights that the Controlling Class Representative has with respect to directing the Master Servicer and/or Special Servicer with respect to the servicing of the Peter Cooper Village & Stuyvesant Town Loan. See ‘‘SERVICING OF THE MORTGAGE LOANS—The Controlling Class Representative’’ in this prospectus supplement.
Application of Payments in Connection with the Peter Cooper Village & Stuyvesant Town Intercreditor Agreement. Pursuant to the Peter Cooper Village & Stuyvesant Town Intercreditor Agreement, all payments, proceeds and other recoveries on or in respect of the Peter Cooper Village & Stuyvesant Town Loan and/or the Peter Cooper Village & Stuyvesant Town Pari Passu Companion Loans (subject, in each case, to the rights of the Master Servicer, the Special Servicer and the Trustee to payments and reimbursements as set forth in the Pooling and Servicing Agreement) will be applied to the Peter Cooper Village & Stuyvesant Town Loan and the Peter Cooper Village & Stuyvesant Town Pari Passu Companion Loans on a pro rata basis according to their respective principal balances.
Five Times Square Loan
Servicing Provisions of the Five Times Square Intercreditor Agreement. Pursuant to the terms of the Five Times Square Intercreditor Agreement, the Five Times Square Whole Loan will be serviced and administered pursuant to the terms of the Pooling and Servicing Agreement by the Master Servicer and Special Servicer, as applicable, on behalf of the holders of the various notes (as a collective whole). The Five Times Square Intercreditor Agreement provides that expenses, losses and shortfalls relating to the Five Times Square Whole Loan will be allocated first, to the holder of the Five Times Square Subordinate Companion Loan and thereafter, pro rata, to the Five Times Square Loan and the Five Times Square Pari Passu Companion Loans.
With respect to the Five Times Square Loan, the Master Servicer and Special Servicer will service and administer the Five Times Square Loan, the Five Times Square Pari Passu Companion Loans and the Five Times Square Subordinate Companion Loan pursuant to the Pooling and Servicing Agreement and the Five Times Square Intercreditor Agreement for so long as the Five Times Square Loan is part of the Trust Fund. The holder of the Five Times Square Subordinate Companion Loan will be entitled to advise and direct the Master Servicer and/or Special Servicer with respect to certain matters, including, among other things, foreclosure or material modifications of the Five Times Square Loan at such times as the Five Times Square Subordinate Companion Loan is not the subject of a Five Times Square Control Appraisal Period (as defined below).
The holder of the Five Times Square Pari Passu Companion Loans or an advisor on its behalf will generally share certain rights that the Controlling Class Representative has with respect to directing the Master Servicer and/or Special Servicer with respect to the servicing of Five Times Square Loan. A ‘‘Five Times Square Control Appraisal Period’’ occurs at such times when the principal balance of the Five Times Square Subordinate Companion Loan minus any Five Times Square Control Appraisal Amount is less than or equal to twenty five percent (25%) of the principal balance of the Five Times Square Subordinate Companion Loan. A ‘‘Five Times Square Control Appraisal Amount’’ is an amount equal to the excess (if any) of (i)(A) the outstanding principal balance of the Five Times Square Whole Loan, plus (B) to the extent not previously advanced by the Master Servicer or the Trustee, all accrued and unpaid interest on the Five Times Square Whole Loan at a per annum rate equal to its mortgage interest rate (exclusive of any default interest), plus (C) all unreimbursed Advances and unpaid interest thereon and any unpaid interest on any principal and interest advances with respect to the Five Times Square Whole Loan, plus (D) all currently due and unpaid real estate taxes and assessments, insurance premiums and, if applicable, ground rents relating to the Mortgaged Property (less any amounts held in escrow for such items) over (ii) an amount equal to ninety percent (90%) of the value thereof as determined by the most recent appraisal of the Mortgaged Property as required by the Five Times Square Intercreditor Agreement (net of any liens senior to the lien of the Five Times Square Loan).
No advice or direction of the holders of the Five Times Square Pari Passu Companion Loans or the Five Times Square Subordinate Companion Loan may require or cause the Master Servicer or the Special Servicer to violate any provision of the Pooling and Servicing Agreement, including the Master Servicer’s
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and the Special Servicer’s obligation to act in accordance with the Servicing Standard. See ‘‘SERVICING OF THE MORTGAGE LOANS—The Controlling Class Representative’’ in this prospectus supplement.
In the event of certain defaults under the Five Times Square Whole Loan, the holder of the Five Times Square Subordinate Companion Loan will be entitled to (i) cure such default within five (5) business days of receipt of notice from the mortgagee with respect to monetary defaults and within thirty (30) days of receipt of notice from the mortgagee with respect to non-monetary defaults and/or (ii) purchase the Five Times Square Loan from the Trust Fund and the Five Times Square Pari Passu Companion Loans from the holder thereof after the expiration of the cure period subject to the conditions contained in the Five Times Square Intercreditor Agreement; provided, however, the holder of the Five Times Square Subordinate Companion Loan may only cure such defaults six (6) times during the life of the Five Times Square Whole Loan and no such cure is permitted to exceed three (3) consecutive months. The purchase price will generally equal the unpaid aggregate principal balances of the Five Times Square Loan and the Five Times Square Pari Passu Companion Loans, together with all unpaid interest thereon (other than default interest) at the related mortgage interest rate, any unreimbursed servicing expenses, advances and interest on advances for which the borrower under the Five Times Square Whole Loan is responsible and any other Additional Trust Fund Expenses in respect of the Five Times Square Whole Loan actually paid or incurred by the Trust Fund; provided, however, that the purchase price shall not be reduced by any outstanding P&I Advance.
Application of Payments in Connection with the Five Times Square Intercreditor Agreement. Provided no (a) monetary event of default under the related Mortgage Loan documents or (b) non-monetary event of default under the related Mortgage Loan documents with respect to which the Five Times Square Whole Loan becomes a Specially Serviced Mortgage Loan (a ‘‘Five Times Square Special Event of Default’’) has occurred and is continuing (subject to the cure and purchase rights of holder of the Five Times Square Subordinate Companion Loan under the Five Times Square Intercreditor Agreement), after payment or reimbursement of any advances, advance interest or other costs, fees or expenses related to or allocable to the Five Times Square Whole Loan will be paid in the following manner:
First, pro rata (based upon the outstanding principal balances of the Five Times Square Loan and the Five Times Square Pari Passu Companion Loans), to the holders of the Five Times Square Loan and the Five Times Square Pari Passu Companion Loans, in an amount equal to the accrued and unpaid interest due thereon;
Second, to the holders of the Five Times Square Loan and the Five Times Square Pari Passu Companion Loans, in an amount equal to their pro rata (based upon the outstanding principal balances of the Five Times Square Loan, the Five Times Square Pari Passu Companion Loans and the Five Times Square Subordinate Companion Loan) portion of the principal balance of the Five Times Square Whole Loan which is due and payable pursuant to the related Mortgage Loan documents;
Third, pro rata (based upon the outstanding principal balances of the Five Times Square Loan and the Five Times Square Pari Passu Companion Loans), to the holders of the Five Times Square Loan and the Five Times Square Pari Passu Companion Loans, in an amount equal to any unreimbursed realized losses, if any, with respect to the Five Times Square Loan or Five Times Square Pari Passu Companion Loans, respectively;
Fourth, to the holder of the Five Times Square Subordinate Companion Loan, in an amount equal to any unreimbursed cure payments and advances made by it;
Fifth, to the holder of the Five Times Square Subordinate Companion Loan, in an amount equal to the accrued and unpaid interest due thereon;
Sixth, to the holder of the Five Times Square Subordinate Companion Loan, in an amount equal to its pro rata (based upon the outstanding principal balances of the Five Times Square Loan, the Five Times Square Pari Passu Companion Loans and the Five Times Square Subordinate Companion Loan) portion of the principal balance of the Five Times Square Whole Loan which is due and payable pursuant to the related Mortgage Loan documents;
Seventh, to the holder of the Five Times Square Subordinate Companion Loan, in an amount equal to any unreimbursed realized losses, if any, with respect to the Five Times Square Subordinate Companion Loan;
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Eighth, to the holders of the Five Times Square Loan, the Five Times Square Pari Passu Companion Loans and the Five Times Square Subordinate Companion Loan, pro rata (based upon the initial principal balances of the Five Times Square Loan, the Five Times Square Pari Passu Companion Loans and the Five Times Square Subordinate Companion Loan, respectively), in an amount equal to any prepayment premium, to the extent actually paid, allocable to the Five Times Square Whole Loan; and
Ninth, any excess, pro rata, to the holders of the Five Times Square Loan, the Five Times Square Pari Passu Companion Loans and the Five Times Square Subordinate Companion Loan (based upon the initial principal balances of the Five Times Square Loan, the Five Times Square Pari Passu Companion Loans and the Five Times Square Subordinate Companion Loan, respectively).
During the continuance of a Five Times Square Special Event of Default (subject to the cure and purchase rights of holder of the Five Times Square Subordinate Companion Loan under the Five Times Square Intercreditor Agreement), after payment or reimbursement of any advances, advance interest or other costs, fees or expenses related to or allocable to the Five Times Square Whole Loan will be paid in the following manner:
First, pro rata (based upon the outstanding principal balances of the Five Times Square Loan and the Five Times Square Pari Passu Companion Loans), to the holders of the Five Times Square Loan and the Five Times Square Pari Passu Companion Loans, in an amount equal to the accrued and unpaid interest due thereon;
Second, pro rata (based upon the outstanding principal balances of the Five Times Square Loan and the Five Times Square Pari Passu Companion Loans), to the holders of the Five Times Square Loan and the Five Times Square Pari Passu Companion Loans, in an amount equal to the principal balance of the Five Times Square Loan and the Five Times Square Pari Passu Companion Loans, respectively, until paid in full;
Third, pro rata (based upon the outstanding principal balances of the Five Times Square Loan and the Five Times Square Pari Passu Companion Loans), to the holders of the Five Times Square Loan and the Five Times Square Pari Passu Companion Loans, in an amount equal to any unreimbursed realized losses, if any, previously allocated to the Five Times Square Loan or the Five Times Square Pari Passu Companion Loans, respectively;
Fourth, to the holder of the Five Times Square Subordinate Companion Loan, in an amount equal to the accrued and unpaid interest due thereon;
Fifth, to the holder of the Five Times Square Subordinate Companion Loan, in an amount equal to the principal balance of the Five Times Square Subordinate Companion Loan until paid in full;
Sixth, to the holder of the Five Times Square Subordinate Companion Loan, in an amount equal to any unreimbursed realized losses, if any, previously allocated to the Five Times Square Subordinate Companion Loan;
Seventh, pro rata, to the holders of the Five Times Square Loan and the Five Times Square Pari Passu Companion Loans, in an amount equal to the portion of any prepayment premium, to the extent actually paid, allocable to the holder of each of the Five Times Square Loan and the Five Times Square Pari Passu Companion Loans (based upon the ratio between the initial principal balance of the Five Times Square Loan, the initial principal balance of the Five Times Square Pari Passu Companion Loans and the initial principal balance of the Five Times Square Subordinate Companion Loan);
Eighth, to the holder of the Five Times Square Subordinate Companion Loan, in an amount equal to the portion of any prepayment premium, to the extent actually paid, allocable to the Five Times Square Subordinate Companion Loan (based upon the ratio between the initial principal balance of the Five Times Square Loan, the initial principal balance of the Five Times Square Pari Passu Companion Loans and the initial principal balance of the Five Times Square Subordinate Companion Loan);
Ninth, pro rata, to the holders of the Five Times Square Loan and the Five Times Square Pari Passu Companion Loans (based upon the initial principal balances of the Five Times Square Loan and the Five Times Square Pari Passu Companion Loans), to the holders of the Five Times Square Loan and the Five Times Square Pari Passu Companion Loans, in an amount equal to any default interest;
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Tenth, to the holder of the Five Times Square Subordinate Companion Loan, in an amount equal to any default interest;
Eleventh, to the holder of the Five Times Square Subordinate Companion Loan, in an amount equal to any unreimbursed costs and advances made by it;
Twelfth, any excess, pro rata, to the holders of the Five Times Square Loan, the Five Times Square Pari Passu Companion Loans and the Five Times Square Subordinate Companion Loan (based upon the initial principal balance of the Five Times Square Loan, the initial principal balance of the Five Times Square Pari Passu Companion Loans and the initial principal balance of the Five Times Square Subordinate Companion Loan, respectively).
State Street Financial Center Loan
Servicing Provisions of the State Street Financial Center Intercreditor Agreement.
With respect to the State Street Financial Center Loan, the LB-UBS 2007-C1 Master Servicer and the LB-UBS 2007-C1 Special Servicer will administer the State Street Financial Center Loan and the State Street Pari Passu Companion Loan pursuant to the LB-UBS 2007-C1 Pooling and Servicing Agreement and the State Street Financial Center Intercreditor Agreement for so long as the State Street Financial Center Loan is part of the Trust Fund. The holders of the State Street Financial Center Pari Passu Companion Loan or an advisor on their behalf will generally share certain of the rights that the Controlling Class Representative has with respect to directing the LB-UBS 2007-C1 Master Servicer and/or LB-UBS 2007-C1 Special Servicer with respect to the servicing of the State Street Financial Center Loan. See ‘‘SERVICING OF THE MORTGAGE LOANS—The Controlling Class Representative’’ in this prospectus supplement.
Application of Payments in Connection with the State Street Intercreditor Agreement. Pursuant to the State Street Financial Center Intercreditor Agreement, all payments, proceeds and other recoveries on or in respect of the State Street Financial Center Loan and/or the State Street Pari Passu Companion Loan (subject, in each case, to the rights of the LB-UBS 2007-C1 Master Servicer, the LB-UBS 2007-C1 Special Servicer, the LB-UBS 2007-C1 Trustee, the Master Servicer and the Special Servicer to payments and reimbursements as set forth in the Pooling and Servicing Agreement) will be applied to the State Street Financial Center Loan and the State Street Financial Center Pari Passu Companion Loan on a pro rata basis according to their respective principal balances.
485 Lexington Avenue Loan
Servicing Provisions of the 485 Lexington Avenue Intercreditor Agreement.
With respect to the 485 Lexington Avenue Loan, the Master Servicer and the Special Servicer will administer the 485 Lexington Avenue Loan and the 485 Lexington Avenue Pari Passu Companion Loan pursuant to the Pooling and Servicing Agreement and the 485 Lexington Avenue Intercreditor Agreement for so long as the 485 Lexington Avenue Loan is part of the Trust Fund. The holders of the 485 Lexington Avenue Pari Passu Companion Loan will generally share certain of the rights that the Controlling Class Representative has with respect to directing the Master Servicer and/or Special Servicer with respect to the servicing of the 485 Lexington Avenue Loan. See ‘‘SERVICING OF THE MORTGAGE LOANS—The Controlling Class Representative’’ in this prospectus supplement.
Application of Payments in Connection with the 485 Lexington Avenue Intercreditor Agreement. Pursuant to the 485 Lexington Avenue Intercreditor Agreement, all payments, proceeds and other recoveries on or in respect of the 485 Lexington Avenue Loan and/or the 485 Lexington Avenue Pari Passu Companion Loans (subject, in each case, to the rights of the Master Servicer, the Special Servicer and the Trustee to payments and reimbursements as set forth in the Pooling and Servicing Agreement) will be applied to the 485 Lexington Avenue Loan and the 485 Lexington Avenue Pari Passu Companion Loan on a pro rata basis according to their respective principal balances.
One Congress Street Loan
Servicing Provisions of the One Congress Street Intercreditor Agreement. Pursuant to the terms of the One Congress Street Intercreditor Agreement, the One Congress Street Whole Loan (‘‘One Congress
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Street Whole Loan’’) will be serviced and administered pursuant to the terms of the Pooling and Servicing Agreement by the Master Servicer and Special Servicer, as applicable, on behalf of the holders of the various notes (as a collective whole). The One Congress Street Intercreditor Agreement provides that expenses, losses and shortfalls relating to the One Congress Street Whole Loan will be allocated first, to the holder of the One Congress Street Subordinate Companion Loan and thereafter to the One Congress Street Loan. Notwithstanding any contrary provision above, in no event shall Note B Holder be required to pay, nor shall any disbursement or payment otherwise distributable to Note B Holder be reduced for, any taxes imposed on the trust fund established in connection with the Securitization, any fees or expenses in connection with any audit or review by the Internal Revenue Service or other governmental authority of the trust fund established in connection with the Securitization, or any trustee fees payable to the Trustee in connection with the Securitization. With respect to the One Congress Street Loan, the Master Servicer and Special Servicer will service and administer the One Congress Street Loan and the One Congress Street Subordinate Companion Loan pursuant to the Pooling and Servicing Agreement and the One Congress Street Intercreditor Agreement for so long as the One Congress Street Loan is part of the Trust Fund. The holder of the One Congress Street Subordinate Companion Loan will be entitled to advise and direct the Special Servicer with respect to certain matters (See ‘‘SERVICING OF THE MORTGAGE LOANS—The Controlling Class Representative’’ in this prospectus supplement), including, among other things, foreclosure, any sale of the Mortgaged Property, any release of the related borrower or material modifications of the One Congress Street Whole Loan at such times as the One Congress Street Subordinate Companion Loan is not the subject of a One Congress Street Control Appraisal Period (as defined below). The holder of the One Congress Street Subordinate Companion Loan may have special relationships and interests that conflict with those of the Certificateholders of one or more classes of the Certificates, may act solely in its own interests, does not have any duty to the holders of any Certificateholders and may take actions that favor its own interests over those of the Certificateholders. The holder of the One Congress Street Subordinate Companion Loan will have no liability to any Certificateholders for having acted as described above and the Certificateholders may not take any action against it for having acted as described above.
A ‘‘One Congress Street Control Appraisal Period’’ shall be deemed to have occurred if and so long as (A) (i) the original principal amount of the One Congress Street Subordinate Companion Loan, minus (x) any principal payments made by the Borrower and received on and allocated to the One Congress Street Subordinate Companion Loan (whether as scheduled amortization, principal prepayments or otherwise), and (y) any existing Appraisal Reduction Amount with respect to the One Congress Street Whole Loan, and (z) any realized losses with respect to the One Congress Street Whole Loan, is less than 25% of an amount equal to (b) the original principal amount of the One Congress Street Subordinate Companion Loan, minus any principal payments made by the borrower under the One Congress Street Whole Loan and received on and allocated to the One Congress Street Subordinate Companion Loan (whether as scheduled amortization, principal prepayments or otherwise), and (ii) the One Congress Street Loan has not been paid in full, or (B) if the holder of the One Congress Street Subordinate Companion Loan is the borrower or an affiliate of the borrower under the One Congress Street Whole Loan.
No advice or direction of the holder of the One Congress Street Subordinate Companion Loan may require or cause the Master Servicer or the Special Servicer to violate any provision of the Pooling and Servicing Agreement, including the Master Servicer’s and the Special Servicer’s obligation to act in accordance with the Servicing Standard. See ‘‘SERVICING OF THE MORTGAGE LOANS—The Controlling Class Representative’’ in this prospectus supplement.
Notwithstanding the foregoing, within 10 business days after receipt by the holder of the One Congress Street Subordinate Companion Loan of notice indicating that a One Congress Street Control Appraisal Period is in effect (without regard to the provisions described in this paragraph), the holder of the One Congress Street Subordinate Companion Loan may, at its option, post with the Master Servicer (A) cash, (B) unconditional and irrevocable standby letters of credit payable on sight demand (with the Trustee as beneficiary) issued by a domestic bank or other domestic financial institution (or by the U.S. agency or branch of a foreign bank) the long-term unsecured debt obligations of which domestic bank, other institution or foreign bank are rated at least ‘‘Aa3’’ (in the case of Moody’s), ‘‘AA-’’ (if rated by
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Fitch) and ‘‘AA-’’ by S&P and the short term obligations of which are rated at least ‘‘P-1’’ by Moody’s, ‘‘F-1 (if rated by Fitch) and ‘‘A-1’’ by S&P and in form and substance reasonably satisfactory to the Master Servicer, or (C) U.S. government securities that have maturities of not more than 30 days meeting Rating Agency criteria as ‘‘eligible investments’’ or ‘‘permitted investments’’ (to be held by the Master Servicer in a segregated securities account solely and exclusively in the name of the Trustee, meeting the Rating Agency criteria for an ‘‘eligible account’’), in any case in an aggregate amount which, when added to and for this purpose considered a part of the appraised value of the Mortgaged Property, will cause a One Congress Street Control Appraisal Period no longer to be in effect (such cash, letters of credit or U.S. government securities, ‘‘Reserve Collateral’’). The holder of the One Congress Street Subordinate Companion Loan must post any Reserve Collateral no more than three business days after such notice and must pay or cause to be paid any and all reasonable out of pocket costs and expenses incurred by the Master Servicer associated with the delivery and/or pledge of such Reserve Collateral. Upon the posting of such Reserve Collateral and satisfaction of the other conditions set forth above, the holder of the One Congress Street Subordinate Companion Loan shall be entitled to exercise all rights as if a One Congress Street Control Appraisal Period has not come into effect (although such posting of such collateral shall not prevent a One Congress Street Control Appraisal Period from again coming into effect (taking into account any Reserve Collateral then posted), in which event the foregoing provisions of this paragraph shall again apply and the holder of the One Congress Street Subordinate Companion Loan shall again be entitled to post Reserve Collateral. Notwithstanding the foregoing, to the extent that the appraised value of the One Congress Street Mortgaged Property has increased such that a One Congress Street Control Appraisal Period is not in effect without regard to Reserve Collateral, then the Master Servicer must release the then remaining Reserve Collateral upon the written request of the holder of the One Congress Street Subordinate Companion Loan and the holder of the One Congress Street Subordinate Companion Loan’s payment of any costs and expenses incurred by the Master Servicer in connection with such release.
Following a Final Recovery Determination with respect to the One Congress Street Whole Loan and application of all proceeds of the liquidation of the One Congress Street Whole Loan, the One Congress Street mortgaged property or any successor REO Property, the Master Servicer on behalf of the Trust as the holder of the One Congress Street Loan will be entitled to draw on or liquidate the Reserve Collateral and apply the proceeds thereof to reimburse the Trust for any costs, expenses and losses (including but not limited to special servicing fees, workout fees, liquidation fees and certain other out-of-pocket expenses) relating to the One Congress Street Whole Loan and/or the related mortgaged property. Any remaining portion of such proceeds must be remitted to the holder of the One Congress Street Subordinate Companion Loan within 10 business days following the applicable Final Recovery Determination.
Notwithstanding the foregoing, if any letters of credit are posted as Reserve Collateral, then the holder of the One Congress Street Subordinate Companion Loan must, not later than 30 days before the scheduled expiration of such letter of credit, replace or cause the extension of such letter of credit. In addition, the holder of the One Congress Street Subordinate Companion Loan must also replace any such letter of credit if the ratings of the issuer thereof falls below the minimum ratings that apply to the initial posting of letters of credit as described above. If the holder of the One Congress Street Subordinate Companion Loan does not replace a delivered letter of credit with a replacement letter of credit within the applicable period set forth above, the Master Servicer on behalf of the Trust as the holder of the One Congress Street Loan shall be entitled immediately thereupon to draw on such delivered letter of credit to the full extent of the amount then remaining available thereunder, in which case the Master Servicer shall hold the proceeds of such draw as Reserve Collateral and shall be entitled to hold and apply such Reserve Collateral in the manner described in the preceding paragraph.
Cure and Purchase Rights of the Holder of the One Congress Street Subordinate Companion Loan. In the event of certain defaults under the One Congress Street Whole Loan, the holder of the One Congress Street Subordinate Companion Loan will be entitled to (i) cure such monetary default within 5 business days of receipt of the cure notice and cure such non-monetary default within 30 days of receipt of the cure notice. Notwithstanding the foregoing, the rights of the holder of the One Congress Street Subordinate Companion Loan to cure a monetary default or non-monetary default will be limited
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to six (6) cure events over the life of the One Congress Street Whole Loan and no single cure event may exceed three (3) consecutive months. Under the One Congress Street Loan Intercreditor Agreement, a cure event is defined as the exercise of cure rights by the holder of the One Congress Street Subordinate Companion Loan, whether for one month or for consecutive months in the aggregate. If and for so long as the holder of the One Congress Street Subordinate Companion Loan is pursuing cures, the One Congress Street Whole Loan will not be treated as a Specially Serviced Mortgage Loan under the Pooling and Servicing Agreement.
In addition, the holder of the One Congress Street Subordinate Companion Loan will generally have the right to purchase the One Congress Street Loan if and for as long as the One Congress Street Whole Loan remains a Specially Serviced Mortgage Loan and, further, upon the date (if any) when any scheduled monthly debt service payment under the One Congress Street Whole loan becomes at least 45 days delinquent. The purchase price will generally equal the unpaid aggregate principal balance of the One Congress Street Loan, together with all accrued and unpaid interest thereon (other than default interest) at the related mortgage interest rate, and any unreimbursed servicing expenses, advances and interest on advances for which the borrower under the One Congress Street Loan is responsible and certain other Additional Trust Fund Expenses in respect of the One Congress Street Whole Loan actually paid or incurred by the Trust Fund; provided, however, that the purchase price shall not be reduced by any outstanding P&I Advance. In no event will the repurchase price be required to include any default interest, late payment charges or yield maintenance charge or prepayment premium.
Replacement of the Special Servicer. When the One Congress Street Subordinate Companion Loan is not the subject of a One Congress Street Control Appraisal Period, the holder of the One Congress Street Subordinate Companion Loan will be entitled to have the right to replace the existing special servicer with respect to the One Congress Street Whole Loan under certain circumstances and appoint a successor to that special servicer (subject to confirmation from each of the Rating Agencies that the appointment will not result in a qualification, downgrade or withdrawal of any rating then assigned by that Rating Agency to any Class of Certificates).
Application of Payments in Connection with the One Congress Street Intercreditor Agreement. Provided no (a) monetary event of default under the related Mortgage Loan documents or (b) non-monetary event of default under the related Mortgage Loan documents with respect to which the One Congress Street Whole Loan becomes a Specially Serviced Mortgage Loan (a ‘‘One Congress Street Special Event of Default’’) has occurred and is continuing (subject to the cure and purchase rights of holder of the One Congress Street Subordinate Companion Loan under the One Congress Street Intercreditor Agreement), after payment or reimbursement of any advances, advance interest or other costs, fees or expenses related to or allocable to the One Congress Street Whole Loan will be paid in the following manner:
First, to the holder of the One Congress Street Loan, in an amount equal to the accrued and unpaid interest (other than default interest) due thereon;
Second, to the holder of the One Congress Street Loan, in an amount equal to its pro rata portion (based upon the outstanding principal balances of the One Congress Street Loan and the One Congress Street Subordinate Companion Loan) of the principal balance of the One Congress Street Whole Loan which is due and payable pursuant to the related Mortgage Loan documents, if any, together with all prepayments, including, without limitation, loss proceeds applied to the repayment of the One Congress Street Whole Loan, in an amount equal to the holder of the One Congress Street Loan’s pro rata portion (based upon the outstanding principal balances of the One Congress Street Loan and the One Congress Street Subordinate Companion Loan) of the principal balance of the One Congress Street Whole Loan;
Third, to the holder of the One Congress Street Subordinate Companion Loan, in an amount equal to any unreimbursed cure payments and advances made by it;
Fourth, to the holder of the One Congress Street Subordinate Companion Loan, in an amount equal to the accrued and unpaid interest (other than default interest) due thereon;
Fifth, to the holder of the One Congress Street Subordinate Companion Loan, in an amount equal to its pro rata portion (based upon the outstanding principal balances of the One Congress Street Loan
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and the One Congress Street Subordinate Companion Loan) of the principal balance of the One Congress Street Whole Loan which is due and payable pursuant to the related Mortgage Loan documents, if any, together with all prepayments, including, without limitation, loss proceeds applied to the repayment of the One Congress Street Whole Loan, in an amount equal to the holder of the One Congress Street Subordinate Companion Loan’s pro rata portion (based upon the outstanding principal balances of the One Congress Street Loan and the One Congress Street Subordinate Companion Loan) of the principal balance of the One Congress Street Whole Loan;
Sixth, to the holder of the One Congress Street Loan and the One Congress Street Subordinate Companion Loan, pro rata (based upon the outstanding principal balances of the One Congress Street Loan and the One Congress Street Subordinate Companion Loan), in an amount equal to any prepayment premium, to the extent actually paid, allocable to the One Congress Street Whole Loan;
Seventh, to the holder of the One Congress Street Loan, in the amount equal to any default interest and late payment charges on the One Congress Street Loan; provided, however, that any default interest which accrued during any and all periods for which the holder of the One Congress Street Subordinate Companion Loan made cure payments in accordance with the terms of the One Congress Street Intercreditor Agreement shall be paid to the holder of the One Congress Street Subordinate Companion Loan;
Eighth, to the holder of the One Congress Street Subordinate Companion Loan, in an amount equal to any default interest and late payment charges on the One Congress Street Subordinate Companion Loan; and
Ninth, any excess, pro rata, to the holders of the One Congress Street Loan and the One Congress Street Subordinate Companion Loan (based on the initial principal balance of the One Congress Street Loan and the One Congress Street Subordinate Companion Loan, respectively).
Following the occurrence and during the continuance of a One Congress Street Special Event of Default (subject to the cure and purchase rights of the holder of the One Congress Street Subordinate Companion Loan under the One Congress Street Intercreditor Agreement) after payment or reimbursement of any advances, advance interest or other costs, fees or expenses related to or allocable to the One Congress Street Whole Loan will be paid in the following manner:
First, to the holder of the One Congress Street Loan, in an amount equal to the accrued and unpaid interest (other than default interest) due thereon;
Second, to the holder of the One Congress Street Loan, in an amount equal to the principal balance of the One Congress Street Loan until paid in full;
Third, to the holder of the One Congress Street Subordinate Companion Loan, in an amount equal to the accrued and unpaid interest (other than default interest) due thereon;
Fourth, to the holder of the One Congress Street Subordinate Companion Loan, in an amount equal to the principal balance of the One Congress Street Subordinate Companion Loan until paid in full;
Fifth, to the holder of the One Congress Street Loan, in an amount equal to the portion of any prepayment premium, to the extent actually paid, allocable to the holder of the One Congress Street Loan (based upon the ratio between the initial principal balances of the One Congress Street Loan and the One Congress Street Subordinate Companion Loan);
Sixth, to the holder of the One Congress Street Subordinate Companion Loan, in an amount equal to the portion of any prepayment premium, to the extent actually paid, allocable to the holder of the One Congress Street Subordinate Companion Loan (based upon the ratio between the initial principal balances of the One Congress Street Loan and the One Congress Street Subordinate Companion Loan);
Seventh, to the holder of the One Congress Street Loan, in an amount equal to any default interest and late payment charges on the One Congress Street Loan;
Eighth, to the holder of the One Congress Street Subordinate Companion Loan, in an amount equal to any default interest and late payment charges on the One Congress Street Subordinate Companion Loan;
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Ninth, to the holder of the One Congress Street Subordinate Companion Loan, in an amount equal to any unreimbursed cure payments or any unreimbursed costs and advances paid or reimbursed by the holder of the One Congress Street Subordinate Companion Loan pursuant to the One Congress Street Intercreditor Agreement;
Tenth, to the holder of the One Congress Street Loan, any other amounts paid by the related borrower and due to it in respect of the One Congress Street Loan;
Eleventh, to the holder of the One Congress Street Subordinate Companion Loan, any other amounts paid by the related borrower and due to it in respect of the One Congress Street Loan; and
Twelfth, any excess, pro rata, to the holders of the One Congress Street Loan and the One Congress Street Subordinate Companion Loan (based upon the initial principal balances of the One Congress Street Loan and the One Congress Street Subordinate Companion Loan, respectively).
Spring Mill Corporate Center Loan
Servicing Provisions of the Spring Mill Corporate Center Intercreditor Agreement. Pursuant to the terms of the Spring Mill Corporate Center Intercreditor Agreement, the Spring Mill Corporate Center Whole Loan will be serviced and administered pursuant to the terms of the Pooling and Servicing Agreement by the Master Servicer and the Special Servicer, as applicable, on behalf of the holders of the various notes (as a collective whole). The Spring Mill Corporate Center Intercreditor Agreement provides that expenses, losses and shortfalls relating to the Spring Mill Corporate Center Whole Loan will be allocated first, to the holder of the Spring Mill Corporate Center Subordinate Companion Loan, and thereafter to the Spring Mill Corporate Center Loan. With respect to the Spring Mill Corporate Center Loan, the Master Servicer and the Special Servicer will service and administer the Spring Mill Corporate Center Loan and the Spring Mill Corporate Center Subordinate Companion Loan pursuant to the Pooling and Servicing Agreement and the Spring Mill Corporate Center Intercreditor Agreement for so long as the Spring Mill Corporate Center Loan is part of the Trust Fund. The holder of the Spring Mill Corporate Center Subordinate Companion Loan will be entitled to advise and consult with the Master Servicer and/or the Special Servicer with respect to certain matters, including, among other things, foreclosure or material modifications of the Spring Mill Corporate Center Whole Loan at such times as the Spring Mill Corporate Center Subordinate Companion Loan is not the subject of a Spring Mill Corporate Center Control Appraisal Period (as defined below).
A ‘‘Spring Mill Corporate Center Control Appraisal Period’’ shall be deemed to have occurred if and so long as (a) the principal balance of the Spring Mill Corporate Center Subordinate Companion Loan minus an amount equal to the excess (if any) of (i)(A) the outstanding principal balance of the Spring Mill Corporate Center Whole Loan, plus (B) to the extent not previously advanced by the Master Servicer or the Trustee, all accrued and unpaid interest on the Spring Mill Corporate Center Whole Loan at a per annum rate equal to its mortgage interest rate (exclusive of any default interest), plus (C) all unreimbursed Advances and unpaid interest thereon and any unpaid interest on any principal and interest advances with respect to the Spring Mill Corporate Center Whole Loan, plus (D) all currently due and unpaid real estate taxes and assessments, insurance premiums and, if applicable, ground rents relating to the Mortgaged Property (less any amounts held in escrow for such items) over (ii) an amount equal to ninety percent (90%) of the value thereof as determined by the most recent appraisal of the Mortgaged Property as required by the Spring Mill Corporate Center Intercreditor Agreement (net of any liens senior to the lien of the Spring Mill Corporate Center Loan), is less than or equal to (b) twenty five percent (25%) of the principal balance of the Spring Mill Corporate Center Subordinate Companion Loan. No advice or direction of the holder of the Spring Mill Corporate Center Subordinate Companion Loan may require or cause the Master Servicer or the Special Servicer to violate any provision of the Pooling and Servicing Agreement, including the Master Servicer’s and the Special Servicer’s obligation to act in accordance with the Servicing Standard. See ‘‘SERVICING OF THE MORTGAGE LOANS — The Controlling Class Representative’’ in this prospectus supplement. In the event of certain defaults under the Spring Mill Corporate Center Whole Loan, the holder of the Spring Mill Corporate Center Subordinate Companion Loan will be entitled to (i) cure such monetary default within five (5) business days of receipt of the cure notice; (ii) cure such non monetary default within thirty (30) days of receipt
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of the cure notice; and/or (iii) purchase the Spring Mill Corporate Center Loan from the Trust Fund after the expiration of the cure period, subject to the conditions contained in the Spring Mill Corporate Center Intercreditor Agreement; provided, further, however, the holder of the Spring Mill Corporate Center Subordinate Companion Loan is limited with respect to the amount and duration of cures as more particularly described in the Spring Mill Corporate Center Intercreditor Agreement. The purchase price will generally equal the unpaid aggregate principal balance of the Spring Mill Corporate Center Loan, together with all unpaid interest thereon at the related mortgage interest rate (including default interest) and any unreimbursed servicing expenses, advances and interest on advances for which the borrower under the Spring Mill Corporate Center Loan is responsible and any other Additional Trust Fund Expenses in respect of the Spring Mill Corporate Center Whole Loan actually paid or incurred by the Trust Fund; provided, however, that the purchase price shall not be reduced by any outstanding P&I Advance. No prepayment consideration will be payable in connection with such a purchase of the Spring Mill Corporate Center Whole Loan.
Application of Payments. Provided no (a) monetary event of default under the related Mortgage Loan documents or (b) non monetary event of default under the related Mortgage Loan documents with respect to which the Spring Mill Corporate Center Whole Loan becomes a Specially Serviced Mortgage Loan (a ‘‘Spring Mill Corporate Center Special Event of Default’’) has occurred and is continuing (subject to the cure and purchase rights of the holder of the Spring Mill Corporate Center Subordinate Companion Loan under the Spring Mill Corporate Center Intercreditor Agreement), after payment or reimbursement of any advances, advance interest or other costs, fees or expenses related to or allocable to the Spring Mill Corporate Center Whole Loan will be paid in the following manner:
First, to the holder of the Spring Mill Corporate Center Loan, in an amount equal to the accrued and unpaid interest due thereon;
Second, to the holder of the Spring Mill Corporate Center Loan, in an amount equal to its pro rata portion (based upon the outstanding principal balances of the Spring Mill Corporate Center Loan and the Spring Mill Corporate Center Subordinate Companion Loan) of the principal balance of the Spring Mill Corporate Center Whole Loan which is due and payable pursuant to the related Mortgage Loan documents, if any, together with all prepayments, including, without limitation, loss proceeds applied to the repayment of the Spring Mill Corporate Center Whole Loan, in an amount equal to the holder of the Spring Mill Corporate Center Loan’s pro rata portion (based upon the outstanding principal balances of the Spring Mill Corporate Center Loan and the Spring Mill Corporate Center Subordinate Companion Loan) of the principal balance of the Spring Mill Corporate Center Whole Loan;
Third, to the holder of the Spring Mill Corporate Center Loan, in an amount equal to any unreimbursed realized losses, if any, with respect to the Spring Mill Corporate Center Loan;
Fourth, to the holder of the Spring Mill Corporate Center Subordinate Companion Loan, in an amount equal to any unreimbursed cure payments and advances made by it which are reimbursed by the related borrower;
Fifth, to the holder of the Spring Mill Corporate Center Subordinate Companion Loan, in an amount equal to the accrued and unpaid interest due thereon;
Sixth, to the holder of the Spring Mill Corporate Center Subordinate Companion Loan, in an amount equal to its pro rata portion (based upon the outstanding principal balances of the Spring Mill Corporate Center Loan and the Spring Mill Corporate Center Subordinate Companion Loan) of the principal balance of the Spring Mill Corporate Center Whole Loan which is due and payable pursuant to the related Mortgage Loan documents, if any, together with all prepayments, including, without limitation, loss proceeds applied to the repayment of the Spring Mill Corporate Center Whole Loan, in an amount equal to the holder of the Spring Mill Corporate Center Subordinate Companion Loan’s pro rata portion (based upon the outstanding principal balances of the Spring Mill Corporate Center Loan and the Spring Mill Corporate Center Subordinate Companion Loan) of the principal balance of the Spring Mill Corporate Center Whole Loan;
Seventh, to the holder of the Spring Mill Corporate Center Subordinate Companion Loan, in an amount equal to any unreimbursed realized losses, if any, with respect to the Spring Mill Corporate Center Subordinate Companion Loan;
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Eighth, to the holders of the Spring Mill Corporate Center Loan and the Spring Mill Corporate Center Subordinate Companion Loan, pro rata (based upon the outstanding principal balances of the Spring Mill Corporate Center Loan and the Spring Mill Corporate Center Subordinate Companion Loan), in an amount equal to any prepayment premium, to the extent actually paid, allocable to the Spring Mill Corporate Center Whole Loan;
Ninth, to the holders of the Spring Mill Corporate Center Loan and the Spring Mill Corporate Center Subordinate Companion Loan, pro rata (based upon the outstanding principal balances of the Spring Mill Corporate Center Loan and the Spring Mill Corporate Center Subordinate Companion Loan, respectively) in an amount equal to any extension fees, to the extent actually paid, allocable to the Spring Mill Corporate Center Whole Loan;
Tenth, to the holder of the Spring Mill Corporate Center Loan, in the amount equal to any default interest; provided, however, that any default interest which accrued during any and all periods for which the holder of the Spring Mill Corporate Center Subordinate Companion Loan made cure payments in accordance with the terms of the Spring Mill Corporate Center Intercreditor Agreement shall be paid to the holder of the Spring Mill Corporate Center Subordinate Companion Loan;
Eleventh, to the holder of the Spring Mill Corporate Center Subordinate Companion Loan, in an amount equal to any default interest;
Twelfth, to the holders of the Spring Mill Corporate Center Loan and the Spring Mill Corporate Center Subordinate Companion Loan, in that order, any accrued and unpaid interest on realized losses allocated to the Spring Mill Corporate Center Loan and the Spring Mill Corporate Center Subordinate Companion Loan calculated at the applicable interest rate from the date such realized loss was allocated to such interest through the date such realized loss was reimbursed; and Thirteenth, any excess, pro rata, to the holders of the Spring Mill Corporate Center Loan and the Spring Mill Corporate Center Subordinate Companion Loan, based on the initial principal balance of the Spring Mill Corporate Center Loan and the Spring Mill Corporate Center Subordinate Companion Loan, respectively.
Following the occurrence and during the continuance of a Spring Mill Corporate Center Special Event of Default (subject to the cure and purchase rights of holder of the Spring Mill Corporate Center Subordinate Companion Loan under the Spring Mill Corporate Center Intercreditor Agreement) after payment or reimbursement of any advances, advance interest or other costs, fees or expenses related to or allocable to the Spring Mill Corporate Center Whole Loan, all remaining payments and proceeds will be paid in the following manner:
First, to the holder of the Spring Mill Corporate Center Loan, in an amount equal to the accrued and unpaid interest due thereon;
Second, to the holder of the Spring Mill Corporate Center Loan, in an amount equal to the principal balance of the Spring Mill Corporate Center Loan until paid in full;
Third, to the holder of the Spring Mill Corporate Center Loan, any unreimbursed realized losses, if any, with respect to the Spring Mill Corporate Center Loan;
Fourth, to the holder of the Spring Mill Corporate Center Subordinate Companion Loan, in an amount equal to the accrued and unpaid interest due thereon;
Fifth, to the holder of the Spring Mill Corporate Center Subordinate Companion Loan, in an amount equal to the principal balance of the Spring Mill Corporate Center Subordinate Companion Loan until paid in full;
Sixth, to the holder of the Spring Mill Corporate Center Subordinate Companion Loan, in an amount equal to any unreimbursed realized losses, if any, with respect to the Spring Mill Corporate Center Subordinate Companion Loan;
Seventh, to the holder of the Spring Mill Corporate Center Loan, in an amount equal to the portion of any prepayment premium, to the extent actually paid, allocable to the holder of the Spring Mill Corporate Center Loan (based upon the initial principal balances of the Spring Mill Corporate Center Loan and the Spring Mill Corporate Center Subordinate Companion Loan);
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Eighth, to the holder of the Spring Mill Corporate Center Subordinate Companion Loan, in an amount equal to the portion of any prepayment premium, to the extent actually paid, allocable to the holder of the Spring Mill Corporate Center Subordinate Companion Loan (based upon the initial principal balances of the Spring Mill Corporate Center Loan and the Spring Mill Corporate Center Subordinate Companion Loan);
Ninth, to the holder of the Spring Mill Corporate Center Loan, in an amount equal to the full exit fee, to the extent actually paid;
Tenth, to the holder of the Spring Mill Corporate Center Loan, in an amount equal to its portion of all extension fees, to the extent actually paid, allocable to the holder of the Spring Mill Corporate Center Loan (based upon the ratio between the initial principal balances of the Spring Mill Corporate Center Loan and the Spring Mill Corporate Center Subordinate Companion Loan);
Eleventh, to the holder of the Spring Mill Corporate Center Subordinate Companion Loan, in an amount equal to the portion of any extension fees, to the extent actually paid, allocable to the Spring Mill Corporate Center Subordinate Companion Loan (based upon the ratio between the initial principal balances of the Spring Mill Corporate Center Loan and the Spring Mill Corporate Center Subordinate Companion Loan);
Twelfth, to the holder of the Spring Mill Corporate Center Loan in an amount equal to any default interest;
Thirteenth, to the holder of the Spring Mill Corporate Center Subordinate Companion Loan, in an amount equal to any default interest;
Fourteenth, to the holder of the Spring Mill Corporate Center Subordinate Companion Loan, in an amount equal to any unreimbursed cure payments or any unreimbursed costs (including advances) paid or reimbursed by the holder of the Spring Mill Corporate Center Subordinate Companion Loan with respect to the Spring Mill Corporate Center Whole Loan; and Fifteenth, any excess, pro rata, to the holders of the Spring Mill Corporate Center Loan and the Spring Mill Corporate Center Subordinate Companion Loan (based upon the initial principal balances of the Spring Mill Corporate Center Loan and the Spring Mill Corporate Center Subordinate Companion Loan, respectively).
Eastland Center Loan
Servicing Provisions of the Eastland Center Intercreditor Agreement. Pursuant to the terms of the Eastland Center Intercreditor Agreement, the Eastland Center Whole Loan will be serviced and administered pursuant to the terms of the Pooling and Servicing Agreement by the Master Servicer and the Special Servicer, as applicable, on behalf of the holders of the various notes (as a collective whole). The Eastland Center Intercreditor Agreement provides that expenses, losses and shortfalls relating to the Eastland Center Whole Loan will be allocated first, to the holder of the Eastland Center Subordinate Companion Loan, and thereafter to the Eastland Center Loan. With respect to the Eastland Center Loan, the Master Servicer and the Special Servicer will service and administer the Eastland Center Loan and the Eastland Center Subordinate Companion Loan pursuant to the Pooling and Servicing Agreement and the Eastland Center Intercreditor Agreement for so long as the Eastland Center Loan is part of the Trust Fund. The holder of the Eastland Center Subordinate Companion Loan will be entitled to advise and consult with the Master Servicer and/or the Special Servicer with respect to certain matters, including, among other things, foreclosure or material modifications of the Eastland Center Whole Loan at such times as the Eastland Center Subordinate Companion Loan is not the subject of an Eastland Center Control Appraisal Period (as defined below).
An ‘‘Eastland Center Control Appraisal Period’’ shall be deemed to have occurred if and so long as (a) the principal balance of the Eastland Center Subordinate Companion Loan minus an amount equal to the excess (if any) of (i)(A) the outstanding principal balance of the Eastland Center Whole Loan, plus (B) to the extent not previously advanced by the Master Servicer or the Trustee, all accrued and unpaid interest on the Eastland Center Whole Loan at a per annum rate equal to its mortgage interest rate (exclusive of any default interest), plus (C) all unreimbursed Advances and unpaid interest thereon and any unpaid interest on any principal and interest advances with respect to the Eastland Center Whole
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Loan, plus (D) all currently due and unpaid real estate taxes and assessments, insurance premiums and, if applicable, ground rents relating to the Mortgaged Property (less any amounts held in escrow for such items) over (ii) an amount equal to ninety percent (90%) of the value thereof as determined by the most recent appraisal of the Mortgaged Property as required by the Eastland Center Intercreditor Agreement (net of any liens senior to the lien of the Eastland Center Loan), is less than or equal to (b) twenty five percent (25%) of the principal balance of the Eastland Center Subordinate Companion Loan. No advice or direction of the holder of the Eastland Center Subordinate Companion Loan may require or cause the Master Servicer or the Special Servicer to violate any provision of the Pooling and Servicing Agreement, including the Master Servicer’s and the Special Servicer’s obligation to act in accordance with the Servicing Standard. See ‘‘SERVICING OF THE MORTGAGE LOANS—The Controlling Class Representative’’ in this prospectus supplement. In the event of certain defaults under the Eastland Center Whole Loan, the holder of the Eastland Center Subordinate Companion Loan will be entitled to (i) cure such monetary default within five (5) business days of receipt of the cure notice; (ii) cure such non monetary default within thirty (30) days of receipt of the cure notice; and/or (iii) purchase the Eastland Center Loan from the Trust Fund after the expiration of the cure period, subject to the conditions contained in the Eastland Center Intercreditor Agreement; provided, further, however, the holder of the Eastland Center Subordinate Companion Loan is limited with respect to the amount and duration of cures as more particularly described in the Eastland Center Intercreditor Agreement. The purchase price will generally equal the unpaid aggregate principal balance of the Eastland Center Loan, together with all unpaid interest thereon at the related mortgage interest rate (including default interest) and any unreimbursed servicing expenses, advances and interest on advances for which the borrower under the Eastland Center Loan is responsible and any other Additional Trust Fund Expenses in respect of the Eastland Center Whole Loan actually paid or incurred by the Trust Fund; provided, however, that the purchase price shall not be reduced by any outstanding P&I Advance. No prepayment consideration will be payable in connection with such a purchase of the Eastland Center Whole Loan.
Application of Payments. Provided no (a) monetary event of default under the related Mortgage Loan documents or (b) non monetary event of default under the related Mortgage Loan documents with respect to which the Eastland Center Whole Loan becomes a Specially Serviced Mortgage Loan (an ‘‘Eastland Center Special Event of Default’’) has occurred and is continuing (subject to the cure and purchase rights of the holder of the Eastland Center Subordinate Companion Loan under the Eastland Center Intercreditor Agreement), after payment or reimbursement of any advances, advance interest or other costs, fees or expenses related to or allocable to the Eastland Center Whole Loan will be paid in the following manner:
First, to the holder of the Eastland Center Loan, in an amount equal to the accrued and unpaid interest due thereon;
Second, to the holder of the Eastland Center Loan, in an amount equal to its pro rata portion (based upon the outstanding principal balances of the Eastland Center Loan and the Eastland Center Subordinate Companion Loan) of the principal balance of the Eastland Center Whole Loan which is due and payable pursuant to the related Mortgage Loan documents, if any, together with all prepayments, including, without limitation, loss proceeds applied to the repayment of the Eastland Center Whole Loan, in an amount equal to the holder of the Eastland Center Loan’s pro rata portion (based upon the outstanding principal balances of the Eastland Center Loan and the Eastland Center Subordinate Companion Loan) of the principal balance of the Eastland Center Whole Loan;
Third, to the holder of the Eastland Center Loan, in an amount equal to any unreimbursed realized losses, if any, with respect to the Eastland Center Loan;
Fourth, to the holder of the Eastland Center Subordinate Companion Loan, in an amount equal to any unreimbursed cure payments and advances made by it which are reimbursed by the related borrower;
Fifth, to the holder of the Eastland Center Subordinate Companion Loan, in an amount equal to the accrued and unpaid interest due thereon;
Sixth, to the holder of the Eastland Center Subordinate Companion Loan, in an amount equal to its pro rata portion (based upon the outstanding principal balances of the Eastland Center Loan and the
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Eastland Center Subordinate Companion Loan) of the principal balance of the Eastland Center Whole Loan which is due and payable pursuant to the related Mortgage Loan documents, if any, together with all prepayments, including, without limitation, loss proceeds applied to the repayment of the Eastland Center Whole Loan, in an amount equal to the holder of the Eastland Center Subordinate Companion Loan’s pro rata portion (based upon the outstanding principal balances of the Eastland Center Loan and the Eastland Center Subordinate Companion Loan) of the principal balance of the Eastland Center Whole Loan;
Seventh, to the holder of the Eastland Center Subordinate Companion Loan, in an amount equal to any unreimbursed realized losses, if any, with respect to the Eastland Center Subordinate Companion Loan;
Eighth, to the holders of the Eastland Center Loan and the Eastland Center Subordinate Companion Loan, pro rata (based upon the outstanding principal balances of the Eastland Center Loan and the Eastland Center Subordinate Companion Loan), in an amount equal to any prepayment premium, to the extent actually paid, allocable to the Eastland Center Whole Loan;
Ninth, to the holders of the Eastland Center Loan and the Eastland Center Subordinate Companion Loan, pro rata (based upon the outstanding principal balances of the Eastland Center Loan and the Eastland Center Subordinate Companion Loan, respectively) in an amount equal to any extension fees, to the extent actually paid, allocable to the Eastland Center Whole Loan;
Tenth, to the holder of the Eastland Center Loan, in the amount equal to any default interest; provided, however, that any default interest which accrued during any and all periods for which the holder of the Eastland Center Subordinate Companion Loan made cure payments in accordance with the terms of the Eastland Center Intercreditor Agreement shall be paid to the holder of the Eastland Center Subordinate Companion Loan;
Eleventh, to the holder of the Eastland Center Subordinate Companion Loan, in an amount equal to any default interest;
Twelfth, to the holders of the Eastland Center Loan and the Eastland Center Subordinate Companion Loan, in that order, any accrued and unpaid interest on realized losses allocated to the Eastland Center Loan and the Eastland Center Subordinate Companion Loan calculated at the applicable interest rate from the date such realized loss was allocated to such interest through the date such realized loss was reimbursed; and Thirteenth, any excess, pro rata, to the holders of the Eastland Center Loan and the Eastland Center Subordinate Companion Loan, based on the initial principal balance of the Eastland Center Loan and the Eastland Center Subordinate Companion Loan, respectively.
Following the occurrence and during the continuance of an Eastland Center Special Event of Default (subject to the cure and purchase rights of holder of the Eastland Center Subordinate Companion Loan under the Eastland Center Intercreditor Agreement) after payment or reimbursement of any advances, advance interest or other costs, fees or expenses related to or allocable to the Eastland Center Whole Loan, all remaining payments and proceeds will be paid in the following manner:
First, to the holder of the Eastland Center Loan, in an amount equal to the accrued and unpaid interest due thereon;
Second, to the holder of the Eastland Center Loan, in an amount equal to the principal balance of the Eastland Center Loan until paid in full;
Third, to the holder of the Eastland Center Loan, any unreimbursed realized losses, if any, with respect to the Eastland Center Loan;
Fourth, to the holder of the Eastland Center Subordinate Companion Loan, in an amount equal to the accrued and unpaid interest due thereon;
Fifth, to the holder of the Eastland Center Subordinate Companion Loan, in an amount equal to the principal balance of the Eastland Center Subordinate Companion Loan until paid in full;
Sixth, to the holder of the Eastland Center Subordinate Companion Loan, in an amount equal to any unreimbursed realized losses, if any, with respect to the Eastland Center Subordinate Companion Loan;
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Seventh, to the holder of the Eastland Center Loan, in an amount equal to the portion of any prepayment premium, to the extent actually paid, allocable to the holder of the Eastland Center Loan (based upon the initial principal balances of the Eastland Center Loan and the Eastland Center Subordinate Companion Loan);
Eighth, to the holder of the Eastland Center Subordinate Companion Loan, in an amount equal to the portion of any prepayment premium, to the extent actually paid, allocable to the holder of the Eastland Center Subordinate Companion Loan (based upon the initial principal balances of the Eastland Center Loan and the Eastland Center Subordinate Companion Loan);
Ninth, to the holder of the Eastland Center Loan, in an amount equal to the full exit fee, to the extent actually paid;
Tenth, to the holder of the Eastland Center Loan, in an amount equal to its portion of all extension fees, to the extent actually paid, allocable to the holder of the Eastland Center Loan (based upon the ratio between the initial principal balances of the Eastland Center Loan and the Eastland Center Subordinate Companion Loan);
Eleventh, to the holder of the Eastland Center Subordinate Companion Loan, in an amount equal to the portion of any extension fees, to the extent actually paid, allocable to the Eastland Center Subordinate Companion Loan (based upon the ratio between the initial principal balances of the Eastland Center Loan and the Eastland Center Subordinate Companion Loan);
Twelfth, to the holder of the Eastland Center Loan in an amount equal to any default interest;
Thirteenth, to the holder of the Eastland Center Subordinate Companion Loan, in an amount equal to any default interest;
Fourteenth, to the holder of the Eastland Center Subordinate Companion Loan, in an amount equal to any unreimbursed cure payments or any unreimbursed costs (including advances) paid or reimbursed by the holder of the Eastland Center Subordinate Companion Loan with respect to the Eastland Center Whole Loan; and Fifteenth, any excess, pro rata, to the holders of the Eastland Center Loan and the Eastland Center Subordinate Companion Loan (based upon the initial principal balances of the Eastland Center Loan and the Eastland Center Subordinate Companion Loan, respectively).
Tyco International Building Loan
Servicing Provisions of the Tyco International Building Intercreditor Agreement. Pursuant to the terms of the Tyco International Building Intercreditor Agreement, the Tyco International Building Whole Loan will be serviced and administered pursuant to the terms of the Pooling and Servicing Agreement by the Master Servicer and the Special Servicer, as applicable, on behalf of the holders of the various notes (as a collective whole). The Tyco International Building Intercreditor Agreement provides that expenses, losses and shortfalls relating to the Tyco International Building Whole Loan will be allocated first, to the holder of the Tyco International Building Subordinate Companion Loan, and thereafter to the Tyco International Building Loan. With respect to the Tyco International Building Loan, the Master Servicer and the Special Servicer will service and administer the Tyco International Building Loan and the Tyco International Building Subordinate Companion Loan pursuant to the Pooling and Servicing Agreement and the Tyco International Building Intercreditor Agreement for so long as the Tyco International Building Loan is part of the Trust Fund. The holder of the Tyco International Building Subordinate Companion Loan will be entitled to advise and consult with the Master Servicer and/or the Special Servicer with respect to certain matters, including, among other things, foreclosure or material modifications of the Tyco International Building Whole Loan at such times as the Tyco International Building Subordinate Companion Loan is not the subject of a Tyco International Building Control Appraisal Period (as defined below).
A ‘‘Tyco International Building Control Appraisal Period’’ shall be deemed to have occurred if and so long as (a) the principal balance of the Tyco International Building Subordinate Companion Loan minus an amount equal to the excess (if any) of (i)(A) the outstanding principal balance of the Tyco International Building Whole Loan, plus (B) to the extent not previously advanced by the Master Servicer
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or the Trustee, all accrued and unpaid interest on the Tyco International Building Whole Loan at a per annum rate equal to its mortgage interest rate (exclusive of any default interest), plus (C) all unreimbursed Advances and unpaid interest thereon and any unpaid interest on any principal and interest advances with respect to the Tyco International Building Whole Loan, plus (D) all currently due and unpaid real estate taxes and assessments, insurance premiums and, if applicable, ground rents relating to the Mortgaged Property (less any amounts held in escrow for such items) over (ii) an amount equal to ninety percent (90%) of the value thereof as determined by the most recent appraisal of the Mortgaged Property as required by the Tyco International Building Intercreditor Agreement (net of any liens senior to the lien of the Tyco International Building Loan), is less than or equal to (b) twenty five percent (25%) of the principal balance of the Tyco International Building Subordinate Companion Loan. No advice or direction of the holder of the Tyco International Building Subordinate Companion Loan may require or cause the Master Servicer or the Special Servicer to violate any provision of the Pooling and Servicing Agreement, including the Master Servicer’s and the Special Servicer’s obligation to act in accordance with the Servicing Standard. See ‘‘SERVICING OF THE MORTGAGE LOANS—The Controlling Class Representative’’ in this prospectus supplement.
In the event of certain defaults under the Tyco International Building Whole Loan, the holder of the Tyco International Building Subordinate Companion Loan will be entitled to (i) cure such monetary default within five (5) business days of receipt of the cure notice; (ii) cure such non monetary default within thirty (30) days of receipt of the cure notice; and/or (iii) purchase the Tyco International Building Loan from the Trust Fund after the expiration of the cure period, subject to the conditions contained in the Tyco International Building Intercreditor Agreement; provided, further, however, the holder of the Tyco International Building Subordinate Companion Loan is limited with respect to the amount and duration of cures as more particularly described in the Tyco International Building Intercreditor Agreement. The purchase price will generally equal the unpaid aggregate principal balance of the Tyco International Building Loan, together with all unpaid interest thereon at the related mortgage interest rate (including default interest) and any unreimbursed servicing expenses, advances and interest on advances for which the borrower under the Tyco International Building Loan is responsible and any other Additional Trust Fund Expenses in respect of the Tyco International Building Whole Loan; provided, however, that the purchase price shall not be reduced by any outstanding P&I Advance.
Application of Payments. Provided no (a) monetary event of default under the related Mortgage Loan documents or (b) non monetary event of default under the related Mortgage Loan documents with respect to which the Tyco International Building Whole Loan becomes a Specially Serviced Mortgage Loan (a ‘‘Tyco International Building Special Event of Default’’) has occurred and is continuing (subject to the cure and purchase rights of the holder of the Tyco International Building Subordinate Companion Loan under the Tyco International Building Intercreditor Agreement), after payment or reimbursement of any advances, advance interest or other costs, fees or expenses related to or allocable to the Tyco International Building Whole Loan will be paid in the following manner:
First, to the holder of the Tyco International Building Loan, in an amount equal to the accrued and unpaid interest due thereon;
Second, to the holder of the Tyco International Building Loan, in an amount equal to its pro rata portion (based upon the outstanding principal balances of the Tyco International Building Loan and the Tyco International Building Subordinate Companion Loan) of the principal balance of the Tyco International Building Whole Loan which is due and payable pursuant to the related Mortgage Loan documents, if any, together with all prepayments, including, without limitation, loss proceeds applied to the repayment of the Tyco International Building Whole Loan, in an amount equal to the holder of the Tyco International Building Loan’s pro rata portion (based upon the outstanding principal balances of the Tyco International Building Loan and the Tyco International Building Subordinate Companion Loan) of the principal balance of the Tyco International Building Whole Loan;
Third, to the holder of the Tyco International Building Loan, in an amount equal to any unreimbursed realized losses, if any, with respect to the Tyco International Building Loan;
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Fourth, to the holder of the Tyco International Building Subordinate Companion Loan, in an amount equal to any unreimbursed cure payments and advances made by it which are reimbursed by the related borrower;
Fifth, to the holder of the Tyco International Building Subordinate Companion Loan, in an amount equal to the accrued and unpaid interest due thereon;
Sixth, to the holder of the Tyco International Building Subordinate Companion Loan, in an amount equal to its pro rata portion (based upon the outstanding principal balances of the Tyco International Building Loan and the Tyco International Building Subordinate Companion Loan) of the principal balance of the Tyco International Building Whole Loan which is due and payable pursuant to the related Mortgage Loan documents, if any, together with all prepayments, including, without limitation, loss proceeds applied to the repayment of the Tyco International Building Whole Loan, in an amount equal to the holder of the Tyco International Building Subordinate Companion Loan’s pro rata portion (based upon the outstanding principal balances of the Tyco International Building Loan and the Tyco International Building Subordinate Companion Loan) of the principal balance of the Tyco International Building Whole Loan;
Seventh, to the holder of the Tyco International Building Subordinate Companion Loan, in an amount equal to any unreimbursed realized losses, if any, with respect to the Tyco International Building Subordinate Companion Loan;
Eighth, to the holders of the Tyco International Building Loan and the Tyco International Building Subordinate Companion Loan, pro rata (based upon the outstanding principal balances of the Tyco International Building Loan and the Tyco International Building Subordinate Companion Loan), in an amount equal to any prepayment premium, to the extent actually paid, allocable to the Tyco International Building Whole Loan;
Ninth, to the holders of the Tyco International Building Loan and the Tyco International Building Subordinate Companion Loan, pro rata (based upon the outstanding principal balances of the Tyco International Building Loan and the Tyco International Building Subordinate Companion Loan, respectively) in an amount equal to any extension fees, to the extent actually paid, allocable to the Tyco International Building Whole Loan;
Tenth, to the holder of the Tyco International Building Loan, in the amount equal to any default interest; provided, however, that any default interest which accrued during any and all periods for which the holder of the Tyco International Building Subordinate Companion Loan made cure payments in accordance with the terms of the Tyco International Building Intercreditor Agreement shall be paid to the holder of the Tyco International Building Subordinate Companion Loan;
Eleventh, to the holder of the Tyco International Building Subordinate Companion Loan, in an amount equal to any default interest;
Twelfth, to the holders of the Tyco International Building Loan and the Tyco International Building Subordinate Companion Loan, in that order, any accrued and unpaid interest on realized losses allocated to the Tyco International Building Loan and the Tyco International Building Subordinate Companion Loan calculated at the applicable interest rate from the date such realized loss was allocated to such interest through the date such realized loss was reimbursed; and
Thirteenth, any excess, pro rata, to the holders of the Tyco International Building Loan and the Tyco International Building Subordinate Companion Loan, based on the initial principal balance of the Tyco International Building Loan and the Tyco International Building Subordinate Companion Loan, respectively.
Following the occurrence and during the continuance of a Tyco International Building Special Event of Default (subject to the cure and purchase rights of holder of the Tyco International Building Subordinate Companion Loan under the Tyco International Building Intercreditor Agreement) after payment or reimbursement of any advances, advance interest or other costs, fees or expenses related to or allocable to the Tyco International Building Whole Loan, all remaining payments and proceeds will be paid in the following manner:
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First, to the holder of the Tyco International Building Loan, in an amount equal to the accrued and unpaid interest due thereon;
Second, to the holder of the Tyco International Building Loan, in an amount equal to the principal balance of the Tyco International Building Loan until paid in full;
Third, to the holder of the Tyco International Building Loan, any unreimbursed realized losses, if any, with respect to the Tyco International Building Loan;
Fourth, to the holder of the Tyco International Building Subordinate Companion Loan, in an amount equal to the accrued and unpaid interest due thereon;
Fifth, to the holder of the Tyco International Building Subordinate Companion Loan, in an amount equal to the principal balance of the Tyco International Building Subordinate Companion Loan until paid in full;
Sixth, to the holder of the Tyco International Building Subordinate Companion Loan, in an amount equal to any unreimbursed realized losses, if any, with respect to the Tyco International Building Subordinate Companion Loan;
Seventh, to the holder of the Tyco International Building Loan, in an amount equal to the portion of any prepayment premium, to the extent actually paid, allocable to the holder of the Tyco International Building Loan (based upon the initial principal balances of the Tyco International Building Loan and the Tyco International Building Subordinate Companion Loan);
Eighth, to the holder of the Tyco International Building Subordinate Companion Loan, in an amount equal to the portion of any prepayment premium, to the extent actually paid, allocable to the holder of the Tyco International Building Subordinate Companion Loan (based upon the initial principal balances of the Tyco International Building Loan and the Tyco International Building Subordinate Companion Loan);
Ninth, to the holder of the Tyco International Building Loan, in an amount equal to the portion of all extension fees, to the extent actually paid, allocable to the holder of the Tyco International Building Loan (based upon the ratio between the initial principal balances of the Tyco International Building Loan and the Tyco International Building Subordinate Companion Loan);
Tenth, to the holder of the Tyco International Building Subordinate Companion Loan, in an amount equal to the portion of all extension fees, to the extent actually paid, allocable to the holder of the Tyco International Building Subordinate Companion Loan (based upon the ratio between the initial principal balances of the Tyco International Building Loan and the Tyco International Building Subordinate Companion Loan);
Eleventh, to the holder of the Tyco International Building Loan in an amount equal to any default interest;
Twelfth, to the holder of the Tyco International Building Subordinate Companion Loan, in an amount equal to any default interest;
Thirteen, to the holder of the Tyco International Building Subordinate Companion Loan, in an amount equal to any unreimbursed cure payments; and
Fourteen, any excess, pro rata, to the holders of the Tyco International Building Loan and the Tyco International Building Subordinate Companion Loan (based upon the initial principal balances of the Tyco International Building Loan and the Tyco International Building Subordinate Companion Loan, respectively).
Morgan Apartments Loan
Servicing Provisions of the Morgan Apartments Intercreditor Agreement. Pursuant to the terms of the Morgan Apartments Intercreditor Agreement, the Morgan Apartments Whole Loan will be serviced and administered pursuant to the terms of the Pooling and Servicing Agreement by the Master Servicer and Special Servicer, as applicable, on behalf of the holders of the various notes (as a collective whole).
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The Morgan Apartments Intercreditor Agreement provides that expenses, losses and shortfalls relating to the Morgan Apartments Whole Loan will be allocated first, to the holder of the Morgan Apartments Companion Loan and thereafter to the Morgan Apartments Loan. With respect to the Morgan Apartments Loan, the Master Servicer and Special Servicer will service and administer the Morgan Apartments Loan and the Morgan Apartments Companion Loan pursuant to the Pooling and Servicing Agreement and the Morgan Apartments Intercreditor Agreement for so long as the Morgan Apartments Loan is part of the Trust Fund. The holder of the Morgan Apartments Companion Loan will be entitled to advise and direct the Special Servicer with respect to certain matters, including, among other things, foreclosure, any sale of the Mortgaged Property, any release of the related borrower or material modifications of the Morgan Apartments Whole Loan at such times as the Morgan Apartments Companion Loan is not the subject of a Morgan Apartments Control Appraisal Period (as defined below).
A ‘‘Morgan Apartments Control Appraisal Period’’ shall be deemed to have occurred if and so long as (a) principal balance of the Morgan Apartments Companion Loan minus an amount equal to the excess, if any, of (i)(A) the outstanding principal balance of the Morgan Apartments Whole Loan, plus (B) to the extent not previously advanced by the Master Servicer or the Trustee, all accrued and unpaid interest on the Morgan Apartments Whole Loan at a per annum rate equal to its mortgage interest rate (exclusive of any default interest), plus (C) all unreimbursed advances and unpaid interest thereon and any unpaid interest on any principal and interest advances with respect to the Morgan Apartments Whole Loan, plus (D) all currently due and unpaid real estate taxes and assessments, insurance premiums and, if applicable, ground rents relating to the Mortgaged Property (less any amounts held in escrow for such items) over (ii) an amount equal to ninety percent (90%) of the value thereof as determined by the most recent appraisal of the Mortgaged Property as required by the Morgan Apartments Intercreditor Agreement (net of any liens senior to the lien of the Morgan Apartments Loan), is less than or equal to (b) twenty-five percent (25%) of the principal balance of the Morgan Apartments Companion Loan.
No advice or direction of the holder of the Morgan Apartments Companion Loan may require or cause the Master Servicer or the Special Servicer to violate any provision of the Pooling and Servicing Agreement, including the Master Servicer’s and the Special Servicer’s obligation to act in accordance with the Servicing Standard. See ‘‘SERVICING OF THE MORTGAGE LOANS—The Controlling Class Representative’’ in this prospectus supplement.
In the event of certain defaults under the Morgan Apartments Whole Loan, the holder of the Morgan Apartments Companion Loan will be entitled to (i) cure such monetary default within 5 business days of receipt of the cure notice and cure such non-monetary default within 30 days of receipt of the cure notice and/or (ii) purchase the Morgan Apartments Loan from the Trust Fund after the expiration of the cure period, subject to certain terms in the Morgan Apartments Intercreditor Agreement. Notwithstanding the foregoing, the rights of the holder of the Morgan Apartments Companion Loan to cure a monetary default or non-monetary default will be limited to six (6) cure events over the life of the Morgan Apartments Whole Loan and no single cure event may exceed four (4) consecutive months. Under the Morgan Apartments Loan Intercreditor Agreement, a cure event is defined as the exercise of cure rights by the holder of the Morgan Apartments Companion Loan, whether for 1 month or for consecutive months in the aggregate. The purchase price will generally equal the unpaid aggregate principal balance of the Morgan Apartments Loan, together with all accrued and unpaid interest thereon (other than default interest) at the related mortgage interest rate, and any unreimbursed servicing expenses, advances and interest on advances for which the borrower under the Morgan Apartments Loan is responsible and any other Additional Trust Fund Expenses in respect of the Morgan Apartments Whole Loan actually paid or incurred by the Trust Fund; provided, however, that the purchase price shall not be reduced by any outstanding P&I Advance.
Application of Payments in Connection with the Morgan Apartments Intercreditor Agreement. Provided no (a) monetary event of default under the related Mortgage Loan documents or (b) non-monetary event of default under the related Mortgage Loan documents with respect to which the Morgan Apartments Whole Loan becomes a Specially Serviced Mortgage Loan (a ‘‘Morgan Apartments Special Event of Default’’) has occurred and is continuing (subject to the cure and purchase rights of holder of the Morgan Apartments Companion Loan under the Morgan Apartments Intercreditor
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Agreement), after payment or reimbursement of any advances, advance interest or other costs, fees or expenses related to or allocable to the Morgan Apartments Whole Loan will be paid in the following manner:
First, to the holder of the Morgan Apartments Loan, in an amount equal to the accrued and unpaid interest due thereon;
Second, to the holder of the Morgan Apartments Loan, in an amount equal to its pro rata portion (based upon the outstanding principal balances of the Morgan Apartments Loan and the Morgan Apartments Companion Loan) of the principal balance of the Morgan Apartments Whole Loan which is due and payable pursuant to the related Mortgage Loan documents, if any, together with all prepayments, including, without limitation, loss proceeds applied to the repayment of the Morgan Apartments Whole Loan, in an amount equal to the holder of the Morgan Apartments Loan’s pro rata portion (based upon the outstanding principal balances of the Morgan Apartments Loan and the Morgan Apartments Companion Loan) of the principal balance of the Morgan Apartments Whole Loan;
Third, to the holder of the Morgan Apartments Loan, in an amount equal to any unreimbursed realized losses, if any, with respect to the Morgan Apartments Loan;
Fourth, to the holder of the Morgan Apartments Companion Loan, in an amount equal to any unreimbursed cure payments and advances made by it or in connection with an additional funding which are reimbursed by the borrower;
Fifth, to the holder of the Morgan Apartments Companion Loan, in an amount equal to the accrued and unpaid interest due thereon;
Sixth, to the holder of the Morgan Apartments Companion Loan, in an amount equal to its pro rata portion (based upon the outstanding principal balances of the Morgan Apartments Loan and the Morgan Apartments Companion Loan) of the principal balance of the Morgan Apartments Whole Loan which is due and payable pursuant to the related Mortgage Loan documents, if any, together with all prepayments, including, without limitation, loss proceeds applied to the repayment of the Morgan Apartments Whole Loan, in an amount equal to the holder of the Morgan Apartments Companion Loan’s pro rata portion (based upon the outstanding principal balances of the Morgan Apartments Loan and the Morgan Apartments Companion Loan) of the principal balance of the Morgan Apartments Whole Loan;
Seventh, to the holder of the Morgan Apartments Companion Loan, in an amount equal to any unreimbursed realized losses, if any, with respect to the Morgan Apartments Companion Loan;
Eighth, to the holder of the Morgan Apartments Loan and the Morgan Apartments Companion Loan, pro rata (based upon the outstanding principal balances of the Morgan Apartments Loan and the Morgan Apartments Companion Loan), in an amount equal to any prepayment premium, to the extent actually paid, allocable to the Morgan Apartments Whole Loan;
Ninth, to the holder of the Morgan Apartments Loan and the Morgan Apartments Companion Loan, pro rata (based upon the outstanding principal balances of the Morgan Apartments Loan and the Morgan Apartments Companion Loan), in an amount equal to any extension fees, to the extent actually paid, allocable to the Morgan Apartments Whole Loan;
Tenth, to the holder of the Morgan Apartments Loan, in the amount equal to any default interest; provided, however, that any default interest which accrued during any and all periods for which the holder of the Morgan Apartments Companion Loan made cure payments in accordance with the terms of the Morgan Apartments Intercreditor Agreement shall be paid to the holder of the Morgan Apartments Companion Loan;
Eleventh, to the holder of the Morgan Apartments Companion Loan, in an amount equal to any default interest;
Twelfth, to the holders of the Morgan Apartments Loan and the Morgan Apartments Companion Loan, in that order, any accrued and unpaid interest on realized losses allocated to the Morgan Apartments Loan and the Morgan Apartments Companion Loan calculated at the applicable interest rate from the date such realized loss was allocated to such interest through the date such realized loss was reimbursed; and
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Thirteenth, any excess, pro rata, to the holders of the Morgan Apartments Loan and the Morgan Apartments Companion Loan (based on the initial principal balance of the Morgan Apartments Loan and the Morgan Apartments Companion Loan, respectively).
Following the occurrence and during the continuance of a Morgan Apartments Special Event of Default (subject to the cure and purchase rights of holder of the Morgan Apartments Companion Loan under the Morgan Apartments Intercreditor Agreement) after payment or reimbursement of any advances, advance interest or other costs, fees or expenses related to or allocable to the Morgan Apartments Whole Loan will be paid in the following manner:
First, to the holder of the Morgan Apartments Loan, in an amount equal to the accrued and unpaid interest due thereon;
Second, to the holder of the Morgan Apartments Loan, in an amount equal to the principal balance of the Morgan Apartments Loan until paid in full;
Third, to the holder of the Morgan Apartments Loan, in an amount equal to any unreimbursed realized losses, if any, with respect to the Morgan Apartments Loan;
Fourth, to the holder of the Morgan Apartments Companion Loan, in an amount equal to the accrued and unpaid interest due thereon;
Fifth, to the holder of the Morgan Apartments Companion Loan, in an amount equal to the principal balance of the Morgan Apartments Companion Loan until paid in full;
Sixth, to the holder of the Morgan Apartments Companion Loan, in an amount equal to any unreimbursed realized losses, if any, with respect to the Morgan Apartments Companion Loan;
Seventh, to the holder of the Morgan Apartments Loan, in an amount equal to the portion of any prepayment premium, to the extent actually paid, allocable to the holder of the Morgan Apartments Loan (based upon the ratio between the initial principal balances of the Morgan Apartments Loan and the Morgan Apartments Companion Loan);
Eighth, to the holder of the Morgan Apartments Companion Loan, in an amount equal to the portion of any prepayment premium, to the extent actually paid, allocable to the holder of the Morgan Apartments Companion Loan (based upon the ratio between the initial principal balances of the Morgan Apartments Loan and the Morgan Apartments Companion Loan);
Ninth, to the holder of the Morgan Apartments Loan, in an amount equal to the full exit fee, to the extent actually paid;
Tenth, to the holder of the Morgan Apartments Loan, in an amount equal to the portion of any extension fees, to the extent actually paid, allocable to the holder of the Morgan Apartments Loan (based upon the ratio between the initial principal balances of the Morgan Apartments Loan and the Morgan Apartments Companion Loan);
Eleventh, to the holder of the Morgan Apartments Companion Loan, in an amount equal to the portion of any extension fees, to the extent actually paid, allocable to the holder of the Morgan Apartments Companion Loan (based upon the ratio between the initial principal balances of the Morgan Apartments Loan and the Morgan Apartments Companion Loan);
Twelfth, to the holder of the Morgan Apartments Loan, in an amount equal to any default interest;
Thirteenth, to the holder of the Morgan Apartments Companion Loan, in an amount equal to any default interest;
Fourteenth, to the holder of the Morgan Apartments Companion Loan, in an amount equal to any unreimbursed cure payments or any unreimbursed costs and advances paid or reimbursed by the holder of the Morgan Apartments Companion Loan pursuant to the Morgan Apartments Intercreditor Agreement; and
Fifteenth, any excess, pro rata, to the holders of the Morgan Apartments Loan and the Morgan Apartments Companion Loan (based upon the initial principal balances of the Morgan Apartments Loan and the Morgan Apartments Companion Loan, respectively).
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PNC Corporate Plaza Loan
Servicing Provisions of the PNC Corporate Plaza Intercreditor Agreement. Pursuant to the terms of the PNC Corporate Plaza Intercreditor Agreement, the PNC Corporate Plaza Whole Loan will be serviced and administered pursuant to the terms of the Pooling and Servicing Agreement by the Master Servicer and the Special Servicer, as applicable, on behalf of the holders of the various notes (as a collective whole). The PNC Corporate Plaza Intercreditor Agreement provides that expenses, losses and shortfalls relating to the PNC Corporate Plaza Whole Loan will be allocated first, to the holder of the PNC Corporate Plaza Subordinate Companion Loan, and thereafter to the PNC Corporate Plaza Loan. With respect to the PNC Corporate Plaza Loan, the Master Servicer and the Special Servicer will service and administer the PNC Corporate Plaza Loan and the PNC Corporate Plaza Subordinate Companion Loan pursuant to the Pooling and Servicing Agreement and the PNC Corporate Plaza Intercreditor Agreement for so long as the PNC Corporate Plaza Loan is part of the Trust Fund. The holder of the PNC Corporate Plaza Subordinate Companion Loan will be entitled to advise and consult with the Master Servicer and/or the Special Servicer with respect to certain matters, including, among other things, foreclosure or material modifications of the PNC Corporate Plaza Whole Loan at such times as the PNC Corporate Plaza Subordinate Companion Loan is not the subject of a PNC Corporate Plaza Control Appraisal Period (as defined below).
A ‘‘PNC Corporate Plaza Control Appraisal Period’’ shall be deemed to have occurred if and so long as (a) the principal balance of the PNC Corporate Plaza Subordinate Companion Loan minus an amount equal to the excess (if any) of (i)(A) the outstanding principal balance of the PNC Corporate Plaza Whole Loan, plus (B) to the extent not previously advanced by the Master Servicer or the Trustee, all accrued and unpaid interest on the PNC Corporate Plaza Whole Loan at a per annum rate equal to its mortgage interest rate (exclusive of any default interest), plus (C) all unreimbursed Advances and unpaid interest thereon and any unpaid interest on any principal and interest advances with respect to the PNC Corporate Plaza Whole Loan, plus (D) all currently due and unpaid real estate taxes and assessments, insurance premiums and, if applicable, ground rents relating to the Mortgaged Property (less any amounts held in escrow for such items) over (ii) an amount equal to ninety percent (90%) of the value thereof as determined by the most recent appraisal of the Mortgaged Property as required by the PNC Corporate Plaza Intercreditor Agreement (net of any liens senior to the lien of the PNC Corporate Plaza Loan), is less than or equal to (b) twenty five percent (25%) of the principal balance of the PNC Corporate Plaza Subordinate Companion Loan. No advice or direction of the holder of the PNC Corporate Plaza Subordinate Companion Loan may require or cause the Master Servicer or the Special Servicer to violate any provision of the Pooling and Servicing Agreement, including the Master Servicer’s and the Special Servicer’s obligation to act in accordance with the Servicing Standard. See ‘‘SERVICING OF THE MORTGAGE LOANS—The Controlling Class Representative’’ in this prospectus supplement. In the event of certain defaults under the PNC Corporate Plaza Whole Loan, the holder of the PNC Corporate Plaza Subordinate Companion Loan will be entitled to (i) cure such monetary default within five (5) business days of receipt of the cure notice; (ii) cure such non monetary default within thirty (30) days of receipt of the cure notice; and/or (iii) purchase the PNC Corporate Plaza Loan from the Trust Fund after the expiration of the cure period, subject to the conditions contained in the PNC Corporate Plaza Intercreditor Agreement; provided, further, however, the holder of the PNC Corporate Plaza Subordinate Companion Loan is limited with respect to the amount and duration of cures as more particularly described in the PNC Corporate Plaza Intercreditor Agreement. The purchase price will generally equal the unpaid aggregate principal balance of the PNC Corporate Plaza Loan, together with all unpaid interest thereon at the related mortgage interest rate (including default interest) and any unreimbursed servicing expenses, advances and interest on advances for which the borrower under the PNC Corporate Plaza Loan is responsible and any other Additional Trust Fund Expenses in respect of the PNC Corporate Plaza Whole Loan actually paid or incurred by the Trust Fund; provided, however, that the purchase price shall not be reduced by any outstanding P&I Advance. No prepayment consideration will be payable in connection with such a purchase of the PNC Corporate Plaza Whole Loan.
Application of Payments. Provided no (a) monetary event of default under the related Mortgage Loan documents or (b) non monetary event of default under the related Mortgage Loan documents with respect to which the PNC Corporate Plaza Whole Loan becomes a Specially Serviced Mortgage Loan (a
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‘‘PNC Corporate Plaza Special Event of Default’’) has occurred and is continuing (subject to the cure and purchase rights of the holder of the PNC Corporate Plaza Subordinate Companion Loan under the PNC Corporate Plaza Intercreditor Agreement), after payment or reimbursement of any advances, advance interest or other costs, fees or expenses related to or allocable to the PNC Corporate Plaza Whole Loan will be paid in the following manner:
First, to the holder of the PNC Corporate Plaza Loan, in an amount equal to the accrued and unpaid interest due thereon;
Second, to the holder of the PNC Corporate Plaza Loan, in an amount equal to its pro rata portion (based upon the outstanding principal balances of the PNC Corporate Plaza Loan and the PNC Corporate Plaza Subordinate Companion Loan) of the principal balance of the PNC Corporate Plaza Whole Loan which is due and payable pursuant to the related Mortgage Loan documents, if any, together with all prepayments, including, without limitation, loss proceeds applied to the repayment of the PNC Corporate Plaza Whole Loan, in an amount equal to the holder of the PNC Corporate Plaza Loan’s pro rata portion (based upon the outstanding principal balances of the PNC Corporate Plaza Loan and the PNC Corporate Plaza Subordinate Companion Loan) of the principal balance of the PNC Corporate Plaza Whole Loan;
Third, to the holder of the PNC Corporate Plaza Loan, in an amount equal to any unreimbursed realized losses, if any, with respect to the PNC Corporate Plaza Loan;
Fourth, to the holder of the PNC Corporate Plaza Subordinate Companion Loan, in an amount equal to any unreimbursed cure payments and advances made by it which are reimbursed by the related borrower;
Fifth, to the holder of the PNC Corporate Plaza Subordinate Companion Loan, in an amount equal to the accrued and unpaid interest due thereon;
Sixth, to the holder of the PNC Corporate Plaza Subordinate Companion Loan, in an amount equal to its pro rata portion (based upon the outstanding principal balances of the PNC Corporate Plaza Loan and the PNC Corporate Plaza Subordinate Companion Loan) of the principal balance of the PNC Corporate Plaza Whole Loan which is due and payable pursuant to the related Mortgage Loan documents, if any, together with all prepayments, including, without limitation, loss proceeds applied to the repayment of the PNC Corporate Plaza Whole Loan, in an amount equal to the holder of the PNC Corporate Plaza Subordinate Companion Loan’s pro rata portion (based upon the outstanding principal balances of the PNC Corporate Plaza Loan and the PNC Corporate Plaza Subordinate Companion Loan) of the principal balance of the PNC Corporate Plaza Whole Loan;
Seventh, to the holder of the PNC Corporate Plaza Subordinate Companion Loan, in an amount equal to any unreimbursed realized losses, if any, with respect to the PNC Corporate Plaza Subordinate Companion Loan;
Eighth, to the holders of the PNC Corporate Plaza Loan and the PNC Corporate Plaza Subordinate Companion Loan, pro rata (based upon the outstanding principal balances of the PNC Corporate Plaza Loan and the PNC Corporate Plaza Subordinate Companion Loan), in an amount equal to any prepayment premium, to the extent actually paid, allocable to the PNC Corporate Plaza Whole Loan;
Ninth, to the holders of the PNC Corporate Plaza Loan and the PNC Corporate Plaza Subordinate Companion Loan, pro rata (based upon the outstanding principal balances of the PNC Corporate Plaza Loan and the PNC Corporate Plaza Subordinate Companion Loan, respectively) in an amount equal to any extension fees, to the extent actually paid, allocable to the PNC Corporate Plaza Whole Loan;
Tenth, to the holder of the PNC Corporate Plaza Loan, in the amount equal to any default interest; provided, however, that any default interest which accrued during any and all periods for which the holder of the PNC Corporate Plaza Subordinate Companion Loan made cure payments in accordance with the terms of the PNC Corporate Plaza Intercreditor Agreement shall be paid to the holder of the PNC Corporate Plaza Subordinate Companion Loan;
Eleventh, to the holder of the PNC Corporate Plaza Subordinate Companion Loan, in an amount equal to any default interest;
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Twelfth, to the holders of the PNC Corporate Plaza Loan and the PNC Corporate Plaza Subordinate Companion Loan, in that order, any accrued and unpaid interest on realized losses allocated to the PNC Corporate Plaza Loan and the PNC Corporate Plaza Subordinate Companion Loan calculated at the applicable interest rate from the date such realized loss was allocated to such interest through the date such realized loss was reimbursed; and Thirteenth, any excess, pro rata, to the holders of the PNC Corporate Plaza Loan and the PNC Corporate Plaza Subordinate Companion Loan, based on the initial principal balance of the PNC Corporate Plaza Loan and the PNC Corporate Plaza Subordinate Companion Loan, respectively.
Following the occurrence and during the continuance of a PNC Corporate Plaza Special Event of Default (subject to the cure and purchase rights of holder of the PNC Corporate Plaza Subordinate Companion Loan under the PNC Corporate Plaza Intercreditor Agreement) after payment or reimbursement of any advances, advance interest or other costs, fees or expenses related to or allocable to the PNC Corporate Plaza Whole Loan, all remaining payments and proceeds will be paid in the following manner:
First, to the holder of the PNC Corporate Plaza Loan, in an amount equal to the accrued and unpaid interest due thereon;
Second, to the holder of the PNC Corporate Plaza Loan, in an amount equal to the principal balance of the PNC Corporate Plaza Loan until paid in full;
Third, to the holder of the PNC Corporate Plaza Loan, any unreimbursed realized losses, if any, with respect to the PNC Corporate Plaza Loan;
Fourth, to the holder of the PNC Corporate Plaza Subordinate Companion Loan, in an amount equal to the accrued and unpaid interest due thereon;
Fifth, to the holder of the PNC Corporate Plaza Subordinate Companion Loan, in an amount equal to the principal balance of the PNC Corporate Plaza Subordinate Companion Loan until paid in full;
Sixth, to the holder of the PNC Corporate Plaza Subordinate Companion Loan, in an amount equal to any unreimbursed realized losses, if any, with respect to the PNC Corporate Plaza Subordinate Companion Loan;
Seventh, to the holder of the PNC Corporate Plaza Loan, in an amount equal to the portion of any prepayment premium, to the extent actually paid, allocable to the holder of the PNC Corporate Plaza Loan (based upon the initial principal balances of the PNC Corporate Plaza Loan and the PNC Corporate Plaza Subordinate Companion Loan);
Eighth, to the holder of the PNC Corporate Plaza Subordinate Companion Loan, in an amount equal to the portion of any prepayment premium, to the extent actually paid, allocable to the holder of the PNC Corporate Plaza Subordinate Companion Loan (based upon the initial principal balances of the PNC Corporate Plaza Loan and the PNC Corporate Plaza Subordinate Companion Loan);
Ninth, to the holder of the PNC Corporate Plaza Loan, in an amount equal to the full exit fee, to the extent actually paid;
Tenth, to the holder of the PNC Corporate Plaza Loan, in an amount equal to its portion of all extension fees, to the extent actually paid, allocable to the holder of the PNC Corporate Plaza Loan (based upon the ratio between the initial principal balances of the PNC Corporate Plaza Loan and the PNC Corporate Plaza Subordinate Companion Loan);
Eleventh, to the holder of the PNC Corporate Plaza Subordinate Companion Loan, in an amount equal to the portion of any extension fees, to the extent actually paid, allocable to the PNC Corporate Plaza Subordinate Companion Loan (based upon the ratio between the initial principal balances of the PNC Corporate Plaza Loan and the PNC Corporate Plaza Subordinate Companion Loan);
Twelfth, to the holder of the PNC Corporate Plaza Loan in an amount equal to any default interest;
Thirteenth, to the holder of the PNC Corporate Plaza Subordinate Companion Loan, in an amount equal to any default interest;
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Fourteenth, to the holder of the PNC Corporate Plaza Subordinate Companion Loan, in an amount equal to any unreimbursed cure payments or any unreimbursed costs (including advances) paid or reimbursed by the holder of the PNC Corporate Plaza Subordinate Companion Loan with respect to the PNC Corporate Plaza Whole Loan; and Fifteenth, any excess, pro rata, to the holders of the PNC Corporate Plaza Loan and the PNC Corporate Plaza Subordinate Companion Loan (based upon the initial principal balances of the PNC Corporate Plaza Loan and the PNC Corporate Plaza Subordinate Companion Loan, respectively).
The Mezz Cap Loans
Servicing Provisions of the Mezz Cap Intercreditor Agreements. With respect to the Mezz Cap Loans, the Master Servicer and Special Servicer will service and administer each Mezz Cap Loan and its related Mezz Cap Subordinate Companion Loan pursuant to the Pooling and Servicing Agreement and its related Intercreditor Agreement for so long as each Mezz Cap Loan is part of the Trust Fund. The related Master Servicer and/or the related Special Servicer may not enter into any amendment, deferral, extension, modification, increase, renewal, replacement, consolidation, supplement or waiver of the related Mezz Cap Loan or the related Mortgage Loan documents without obtaining the prior written consent of the holder of the related Mezz Cap Subordinate Companion Loan if such proposed amendment, deferral, extension, modification, increase, renewal, replacement, consolidation, supplement or waiver of the related Mezz Cap Loan or the related Mortgage Loan documents adversely affects the lien priority of the related Mortgage or constitutes a material modification as specified in the related Mezz Cap Intercreditor Agreement; provided, however, such consent right will expire when the repurchase period described in the next paragraph expires. See ‘‘SERVICING OF THE MORTGAGE LOANS—The Controlling Class Representative’’ in this prospectus supplement.
In the event that (i) any payment of principal or interest on a Mezz Cap Loan or Mezz Cap Subordinate Companion Loan becomes ninety (90) or more days delinquent, (ii) the principal balance of a Mezz Cap Loan or Mezz Cap Subordinate Companion Loan has been accelerated, (iii) the principal balance of a Mezz Cap Loan or Mezz Cap Subordinate Companion Loan is not paid at maturity, (iv) the borrower declares bankruptcy or is otherwise subject to a bankruptcy proceeding or (v) any other event where the cash flow payment under a Mezz Cap Subordinate Companion Loan has been interrupted and payments are made pursuant to the event of default waterfall below, the holder of the related Mezz Cap Subordinate Companion Loan will have the right to purchase the related Mezz Cap Loan from the Trust Fund for a period of thirty (30) days after its receipt of a repurchase option notice, subject to certain conditions as set forth in the related Mezz Cap Intercreditor Agreement. The purchase price will generally equal the unpaid principal balance of the related Mezz Cap Loan, together with all accrued and unpaid interest on the Mezz Cap Loan (other than default interest and late payment charges) at the mortgage rate and any outstanding servicing expenses, advances and interest on advances for which the related borrower under the Mezz Cap Loan is responsible and other expenses as provided in the related Mezz Cap Intercreditor Agreement. Unless the borrower or an affiliate is purchasing a Mezz Cap Loan, no prepayment consideration will be payable in connection with the purchase of a Mezz Cap Loan.
Application of Payments. Pursuant to each Mezz Cap Intercreditor Agreement and prior to the occurrence of (i) the acceleration of its related Mezz Cap Loan or Mezz Cap Subordinate Companion Loan, (ii) a monetary event of default or (iii) an event of default triggered by the bankruptcy of the related borrower, the borrower is required to make separate monthly payments of principal and interest to the related Master Servicer and the holder of the related Mezz Cap Subordinate Companion Loan; provided that any partial or full prepayment resulting from the payment of insurance proceeds or condemnation awards or from any partial or full prepayment accepted during the continuance of an event of default under the related Mortgage Loan documents, shall be applied as provided in the paragraph below. Any escrow and reserve payments required in respect of a Mezz Cap Whole Loan are required to be paid to the related Master Servicer.
Following the occurrence and during the continuance of (i) the acceleration of a Mezz Cap Loan or Mezz Cap Subordinate Companion Loan, (ii) a monetary event of default or (iii) an event of default triggered by the bankruptcy of a borrower, and subject to certain rights of the holder of the related Mezz Cap Subordinate Companion Loan to purchase its related Mezz Cap Loan from the Trust Fund, all
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payments and proceeds (of whatever nature) on the related Mezz Cap Subordinate Companion Loan will be subordinated to all payments due on the related Mezz Cap Loan and the amounts with respect to the Mezz Cap Whole Loan will be paid (excluding certain reserves, escrows, insurance proceeds and awards otherwise required to be applied under the related Mortgage Loan documents or released to the borrower) in the following manner:
First, to the related Master Servicer, Special Servicer or Trustee, up to the amount of any unreimbursed costs and expenses paid by such party, including unreimbursed advances and interest thereon;
Second, to the related Master Servicer and the Special Servicer, in an amount equal to the accrued and unpaid servicing fees and other servicing compensation earned by such party;
Third, to the holder of the related Mezz Cap Loan, in an amount equal to accrued and unpaid interest with respect to such Mezz Cap Loan at the pre default interest rate thereon;
Fourth, to the holder of the related Mezz Cap Loan, in an amount equal to the principal balance of such Mezz Cap Loan until paid in full;
Fifth, to the holder of the related Mezz Cap Loan, in an amount equal to any prepayment premium, to the extent actually paid, allocable to such Mezz Cap Loan;
Sixth, to the holder of the related Mezz Cap Subordinate Companion Loan, up to the amount of any unreimbursed costs and expenses paid by the holder of such Mezz Cap Subordinate Companion Loan;
Seventh, to the holder of the related Mezz Cap Subordinate Companion Loan, in an amount equal to accrued and unpaid interest with respect to such Mezz Cap Subordinate Companion Loan at the pre default interest rate thereon;
Eighth, to the holder of the related Mezz Cap Subordinate Companion Loan, in an amount equal to the principal balance of such Mezz Cap Subordinate Companion Loan until paid in full;
Ninth, to the holder of the related Mezz Cap Subordinate Companion Loan, in an amount equal to any prepayment premium, to the extent actually paid, allocable to such Mezz Cap Subordinate Companion Loan;
Tenth, to the holder of the related Mezz Cap Loan and then to the holder of the related Mezz Cap Subordinate Companion Loan, in an amount equal to any unpaid default interest accrued on such Mezz Cap Loan and such Mezz Cap Subordinate Companion Loan, respectively;
Eleventh, any amounts collected or recovered on the related Mezz Cap Whole Loan that represent late payment charges, other than a prepayment premium or default interest, that are not payable to any servicer or trustee in respect of the related Mezz Cap Loan or Mezz Cap Subordinate Companion Loan, are payable to the holder of such Mezz Cap Loan and such Mezz Cap Subordinate Companion Loan on a pro rata basis as determined by the initial balance of each of the related Mezz Cap Loan and the related Mezz Cap Subordinate Companion Loan, respectively; and
Twelfth, any excess amounts that are not required to be paid to the borrower or to a party other than the mortgagee under the related Mortgage Loan documents, to the holder of the related Mezz Cap Loan and the holder of the related Mezz Cap Subordinate Companion Loan, on a pro rata basis, determined by the initial principal balances of each of the related Mezz Cap Loan and the Mezz Cap Subordinate Companion Loan, respectively.
Notwithstanding the foregoing waterfall, if within ninety (90) days of the occurrence of a monetary event of default, (i) the related borrower has paid to the applicable servicer an amount (or amounts are otherwise available) sufficient to cure such monetary default (without taking into consideration default interest in excess of the applicable loan rate or any related late charges due and payable), (ii) no other material event of default (of the kind described in the first paragraph of this ‘‘—Application of Payments’’ section) exists, (iii) the applicable servicer determines that a workout which maintains the scheduled payments and the waiver or deferral of the unpaid default interest and late charges is the course of action to pursue with respect to the event of default, then the related Master Servicer and/or the related Special
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Servicer, as applicable, may apply the amount paid by the related borrower (or otherwise available) net of amounts payable to the related Master Servicer and/or the related Special Servicer, as applicable, or Trustee, first, to the holder of the related Mezz Cap Loan in an amount equal to the accrued and unpaid interest on such Mezz Cap Loan and then an amount equal to any current and delinquent scheduled principal payments on such Mezz Cap Loan and, second, to the holder of the related Mezz Cap Subordinate Companion Loan in an amount equal to the accrued and unpaid interest on such Mezz Cap Subordinate Companion Loan and then an amount equal to any current and delinquent scheduled principal payments on such Mezz Cap Subordinate Companion Loan.
The Caplease Loans
Servicing Provisions of the Caplease Intercreditor Agreement. With respect to the Caplease Loans, the Master Servicer and Special Servicer will service and administer each Caplease Loan and its related Caplease Subordinate Companion Loans pursuant to the Pooling and Servicing Agreement and the related Caplease Intercreditor Agreement for so long as each Caplease Loan is part of the Trust Fund. Each Caplease Loan and its related Caplease Subordinate Companion Loans are cross defaulted. However, upon an event of default which does not constitute a payment default but is limited to a default in the performance by the related borrower of its obligations under its lease, or the failure to reimburse a servicing advance made to fulfill such obligations, the Master Servicer will generally be required to make servicing advances to cure any such borrower default and prevent a default under the lease, subject to customary standards of recoverability, and will be prohibited from foreclosing on the related Mortgaged Property so long as any such advance, together with interest thereon, would be recoverable. Further, the Special Servicer will not be permitted to amend either Caplease Loan or its related Caplease Subordinate Companion Loans in a manner materially adverse to the holders of the related Caplease Subordinate Companion Loans without the consent of the holders of the related Caplease Subordinate Companion Loans. The holders of the related Caplease Subordinate Companion Loans will be entitled to advise the Special Servicer with respect to certain matters related to each Caplease Whole Loan. See ‘‘SERVICING OF THE MORTGAGE LOANS—The Controlling Class Representative’’ in this prospectus supplement.
In the event either Caplease Loan becomes 90 days or more delinquent, an acceleration of the Caplease Whole Loan after an event of default under the related Mortgage Loan documents occurs, the principal balance of either Caplease Whole Loan is not paid at maturity, or the related borrower files a petition for bankruptcy, the holders of the related Caplease Subordinate Companion Loans will be entitled to purchase the related Caplease Loan from the Trust Fund, pursuant to the related Caplease Intercreditor Agreement, for a purchase price equal to the sum of (i) the principal balance of the related Caplease Loan, together with accrued and unpaid interest thereon up to (but not exceeding) the date of purchase, (ii) unreimbursed advances together with accrued and unpaid interest thereon and (iii) certain other amounts payable under the related Mortgage Loan documents.
Applications of Payments. Pursuant to each Caplease Intercreditor Agreement, to the extent described below, the rights of the holders of the related Caplease Subordinate Companion Loans to receive payments with respect to the related Caplease Subordinate Companion Loans (other than payments in respect of Defaulted Lease Claims) are subordinated to the payment rights of the Trust Fund to receive payments with respect to the related Caplease Loan. For purposes of this section, the Caplease Subordinate Companion Loans are sometimes referred to herein as the ‘‘Caplease Senior Subordinate Companion Loan’’ and the ‘‘Caplease Junior Subordinate Companion Loan’’. All payments and proceeds of each Caplease Loan and the related Caplease Subordinate Companion Loans (including, among other things, regular payments, insurance proceeds and liquidation proceeds), other than in respect of Defaulted Lease Claims, whether before or after the occurrence of an event of default with respect to the related Caplease Loan, will be applied, in the event of liquidation of the real property, a determination that applicable servicing advances are nonrecoverable, or a lease acceleration or termination, first, to the holder of the related Caplease Loan, for reimbursement of servicing advances together with interest thereon and second, to the holders of the related Caplease Subordinate Companion Loans, for reimbursement of servicing advances together with interest thereon. All remaining amounts (or all amounts if no such liquidation, nonrecoverability determination or lease acceleration or termination has occurred), will be paid in the following manner:
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First, to the holder of the related Caplease Loan, in an amount equal to interest due with respect to such Caplease Loan at the pre default interest rate thereon;
Second, to the holder of the related Caplease Loan, in an amount equal to (i) the portion of any scheduled payments of principal, if any, due with respect to such Caplease Loan, plus, (ii) the pro rata portion (based on the outstanding principal balances of such Caplease Loan and the related Caplease Subordinate Companion Loans) of any unscheduled payments allocable to such Caplease Loan (including, following acceleration, the full principal balance thereof);
Third, if the related borrower is an affiliate of the holder of the related Caplease Senior Subordinate Companion Loan, to the holder of such Caplease Senior Subordinate Companion Loan, the amount of any property advance made by it (including any interest thereon) and outstanding upon final liquidation of the related Mortgage Loan or related Mortgaged Property or upon any earlier determination by the holder of such Caplease Senior Subordinate Companion Loan that such property advance is a nonrecoverable advance as certified by such party;
Fourth, to the holder of the related Caplease Senior Subordinate Companion Loan, in an amount equal to interest due with respect to such Caplease Senior Subordinate Companion Loan at the pre default interest rate thereon;
Fifth, to the holder of the related Caplease Senior Subordinate Companion Loan, in an amount equal to (i) the portion of any scheduled payments of principal, if any, due with respect to such Caplease Senior Subordinate Companion Loan, plus, (ii) the pro rata portion (based on the outstanding principal balances of the related Caplease Loan and the related Caplease Subordinate Companion Loans) of any unscheduled payments allocable to such Caplease Senior Subordinate Companion Loan (including, following acceleration, the full principal balance thereof);
Sixth, following any lease acceleration or termination, but only prior to any reinstatement of such credit lease following any cure or waiver of the default permitting such lease acceleration or termination, to the holder of the related Caplease Loan for any outstanding advances and any other unreimbursed costs made by or on behalf of such holder of the Caplease Loan;
Seventh, to fund any applicable reserves under the terms of the Mortgage Loan documents for the related Caplease Whole Loan;
Eighth, if the related borrower is an affiliate of the holder of the related Caplease Junior Subordinate Companion Loan, to the holder of such Caplease Junior Subordinate Companion Loan, the amount of any property advance made by it (including any interest thereon) and outstanding upon final liquidation of the related Mortgage Loan or related Mortgaged Property or upon any earlier determination by the holder of such Caplease Junior Subordinate Companion Loan that such property advance is a nonrecoverable advance as certified by such party;
Ninth, to the holder of the Caplease Junior Subordinate Companion Loan, in an amount equal to interest due with respect to such Caplease Junior Subordinate Companion Loan at the pre default interest rate thereon;
Tenth, to the holder of the related Caplease Junior Subordinate Companion Loan, in an amount equal to (i) the portion of any scheduled payments of principal, if any, due with respect to such Caplease Junior Subordinate Companion Loan, plus, (ii) the pro rata portion (based on the outstanding principal balances of the related Caplease Loan and the related Caplease Subordinate Companion Loans) of any unscheduled payments allocable to such Caplease Junior Subordinate Companion Loan (including, following acceleration, the full principal balance thereof);
Eleventh, to reimburse the Master Servicer, Special Servicer or the holders of the related Caplease Subordinate Companion Loans for any outstanding advances made by either such party on the related Caplease Loan or such Caplease Subordinate Companion Loans, to the extent then deemed to be nonrecoverable and not previously reimbursed;
Twelfth, to any prepayment premiums or yield maintenance charges (allocated pro rata based on the principal then prepaid);
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Thirteenth, to the holder of the related Caplease Loan, in an amount equal to the default interest accrued on such Caplease Loan;
Fourteenth, to the holder of the related Caplease Senior Subordinate Companion Loan, in an amount equal to the default interest accrued on such Caplease Senior Subordinate Companion Loan;
Fifteenth, to the holder of the related Caplease Junior Subordinate Companion Loan, in an amount equal to the default interest accrued on such Caplease Junior Subordinate Companion Loan; and
Sixteenth, any remaining amounts to be paid to the related borrower or as otherwise specified in the related Mortgage Loan documents.
Proceeds of Defaulted Lease Claims will generally be applied first, to payment of amounts due under the related Caplease Junior Subordinate Companion Loan, second, to payment of amounts due to the holder of the related Caplease Loan, and thereafter, to payment of amounts due under the related Caplease Senior Subordinate Companion Loan.
Application of Amounts Paid to Trust Fund. On or before each Distribution Date, amounts payable to the Trust Fund as holder of any Co-Lender Loan pursuant to the related Intercreditor Agreement will be included in the Available Distribution Amount for such Distribution Date to the extent described in this prospectus supplement and amounts payable to the holders of the related Companion Loans will be distributed to such holders net of fees and expenses on such Companion Loans; and in the case of the State Street Financial Center Loan, such amounts will be applied and distributed in accordance with the LB-UBS 2007-C1 Pooling and Servicing Agreement.
Mezzanine Loans
With respect to the Mortgage Loans with existing mezzanine debt, the holder of each mezzanine loan generally has the right to purchase the related Mortgage Loan from the Trust Fund if certain defaults on the related Mortgage Loan occur or upon the transfer of the related Mortgage Loan to special servicing as a result of an event of default under the related Mortgage Loan and, in some cases, may have the right to cure certain defaults occurring on the related Mortgage Loan. The purchase price required to be paid in connection with such a purchase is generally equal to the outstanding principal balance of the related Mortgage Loan, together with accrued and unpaid interest on, and all unpaid servicing expenses, advances and interest on advances relating to, such Mortgage Loan. The lenders for this mezzanine debt are generally not affiliates of the related Mortgage Loan borrower. Upon a default under the mezzanine debt, the holder of the mezzanine debt may, under certain circumstances, foreclose upon the ownership interests in the related borrower.
Certain Provisions of the Intercreditor Agreements with Respect to Certain Subordinate Loans
Pursuant to the terms of the related Intercreditor Agreements, the holders of the subordinate loans secured by the related Mortgaged Property (the ‘‘Subordinate Loans’’) with respect to 13 Mortgage Loans (loan numbers 2, 7, 14, 18, 29, 33, 43, 45, 80, 85, 159, 171 and 218) generally have a right to payment that is subordinate to the right to payment of the holder of the related Mortgage Loan.
In addition, the holders of the Subordinate Loans generally have the right, among other things, to (i) approve the annual operating budget of the related borrower in accordance with the terms of the related Mortgage Loan documents with respect to such Subordinate Loan; (ii) cause the termination of the property manager with respect to such Mortgaged Property and approve successor managers subject to certain conditions set forth in the related Intercreditor Agreements and (iii) purchase, in whole but not in part, the related Mortgage Loan for a price generally equal to the outstanding principal balance thereof, together with all accrued interest and other amounts due thereon and all costs and expenses actually incurred by the mortgagee in enforcing the terms of the related Mortgage Loan documents.
The holders of the Subordinate Loans shall also have the right to be notified prior to the commencement of any enforcement action by the mortgagee with respect to the related Mortgaged Property and to cure any default causing such action in accordance with the provisions of the related Intercreditor Agreement.
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The Mortgage Loan documents for the Subordinate Loans generally may be amended without the consent of the holder of the related Subordinate Loan; except for certain amendments relating to, among other things, the economic terms of the related Mortgage Loan, the cash management provisions and the collateral for the related Mortgage Loan; provided, however, in a work-out context the foregoing consent is generally not required.
The holders of the Subordinate Loans may not exercise any rights they may have under the related Mortgage Loan documents or applicable law with respect to a foreclosure or other realization upon the related Mortgaged Property without the prior written consent of the mortgagee, which consent can be withheld or conditioned in the mortgagee’s sole and absolute discretion.
Additional Mortgage Loan Information
For a detailed presentation of certain of the characteristics of the Mortgage Loans and the Mortgaged Properties, on an individual basis, see Annexes A-1, A-2, A-3, A-4, A-5, A-6, A-7, A-8, Annex B, Annex D and Annex E to this prospectus supplement. For purposes of numerical and statistical information set forth in this prospectus supplement and Annexes A-1, A-2, A-3, A-4, A-5, A-6, A-7, A-8, Annex B, Annex D and Annex E unless otherwise specified, such numerical and statistical information excludes any Subordinate Companion Loans and assumes that no future Pari Passu Companion Loans are advanced. For purposes of the calculation of the DSC Ratio, the LTV Ratio and Cut-Off Date Balance per Sq. Ft. or unit, with respect to the Peter Cooper Village & Stuyvesant Town Loan, the Five Times Square Loan, the State Street Financial Center Loan and the 485 Lexington Avenue Loan, such ratios are calculated based upon the aggregate debt service on or aggregate indebtedness of the Peter Cooper Village & Stuyvesant Town Loan and the Peter Cooper Village & Stuyvesant Town Pari Passu Loan, the Five Times Square Loan and the Five Times Square Pari Passu Loan, the State Street Financial Center Loan and the State Street Financial Center Pari Passu Loan (but not the State Street Subordinate Companion Loan) and the 485 Lexington Avenue Loan and the 485 Lexington Avenue Pari Passu Loan. Certain of the Mortgage Loans may have previously computed interest on a floating rate basis, but have been converted to a fixed rate prior to the Closing Date. With respect to these Mortgage Loans, all calculations in this prospectus supplement will be computed on the basis of the date any such Mortgage Loan was converted to a fixed rate, rather than the date of origination. Certain additional information regarding the Mortgage Loans is contained under ‘‘—Assignment of the Mortgage Loans; Repurchases and Substitutions’’ and ‘‘—Representations and Warranties; Repurchases and Substitutions,’’ in this prospectus supplement and under ‘‘DESCRIPTION OF THE TRUST FUNDS’’ and ‘‘CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS AND LEASES’’ in the accompanying prospectus.
In the schedule and tables set forth in Annexes A-1, A-2, A-3, A-4, A-5, A-6, A-7, A-8, Annex B, Annex D and Annex E to this prospectus supplement, cross-collateralized Mortgage Loans are not grouped together; instead, references are made under the heading ‘‘Cross Collateralized and Cross Defaulted Loan Flag’’ with respect to the other Mortgage Loans with which they are cross-collateralized.
Each of the tables herein and in the Annexes sets forth certain characteristics of the Mortgage Pool presented, where applicable, as of the Cut-Off Date. For purposes of the tables and Annexes A-1, A-2, A-3, A-4, A-5, A-6, A-7, A-8, Annex B, Annex D and Annex E:
(i) References to ‘‘DSC Ratio’’ and ‘‘DSCR’’ are references to debt service coverage ratios. Debt service coverage ratios are used by income property lenders to measure the ratio of (a) cash currently generated by a property that is available for debt service (that is, cash that remains after average cost of non-capital expenses of operation, tenant improvements, leasing commissions, replacement reserves and furniture, fixture and equipment reserves during the term of the Mortgage Loan) to (b) required debt service payments. However, debt service coverage ratios only measure the current, or recent, ability of a property to service mortgage debt. The DSC Ratio for any Mortgage Loan or Pari Passu Loan is the ratio of Net Cash Flow produced by the related Mortgaged Property to the annualized amount of debt service that will be payable under that Mortgage Loan commencing after the origination date. The ‘‘Net Cash Flow’’ for a Mortgaged Property is the ‘‘net cash flow’’ of such Mortgaged Property as set forth in, or determined by the applicable Mortgage Loan Seller on the basis of, Mortgaged Property operating statements, generally unaudited, and certified rent rolls
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(as applicable) supplied by the related borrower in the case of multifamily, mixed-use, retail, industrial, residential health care, self-storage and office properties (each a ‘‘Rental Property’’); provided, however, for purposes of calculating the DSC Ratios and DSCR provided herein (i) with respect to 97 Mortgage Loans, representing 22.3% of the Cut-Off Date Pool Balance (87 Mortgage Loans in Loan Group 1 or 28.9% of the Cut-Off Date Group 1 Balance and 10 Mortgage Loans in Loan Group 2 or 6.2% of the Cut-Off Date Group 2 Balance) where Periodic Payments are interest-only for a certain amount of time after origination after which date the Mortgage Loan amortizes principal for the remaining term of the loan the debt service used is the annualized amount of debt service that will be payable under the Mortgage Loan commencing after the amortization period begins; (ii) with respect to 14 Mortgage Loans (loan numbers 18, 21, 58, 62, 98, 124, 125, 151, 154, 172, 176, 190, 222 and 244), representing 2.9% of the Cut-Off Date Pool Balance (10 Mortgage Loans in Loan Group 1 or 3.3% of the Cut-Off Date Group 1 Balance and 4 Mortgage Loans in Loan Group 2 or 2.0% of the Cut-Off Date Group 2 Balance) such ratio was adjusted by taking into account amounts available under certain letters of credit or cash reserves; (iii) with respect to Mortgage Loans that are interest only until paid off at maturity, the annual debt service used is based on the outstanding loan amount times the applicable interest rate without regard to interest accrual basis with respect to all Mortgage Loans except those originated by Artesia; and (iv) with respect to 3 Mortgage Loans (loan numbers 25, 49 and 70), representing 1.2% of the Cut-Off Date Pool Balance (2 Mortgage Loans or 1.4% of the Cut-Off Date Group 1 Balance and 1 Mortgage Loan or 0.9% of the Cut-Off Date Group 2 Balance), such ratio was derived by using the average monthly debt service during the period in which amortization is due according to the related payment schedule mortgage, as described in Annex A-6, A-7, A-8, to this prospectus supplement; provided, further, for purposes of calculating the DSCR’s provided herein for each Pari Passu Loan, the debt service on the related Pari Passu Companion Loan will be taken into account, but it will be assumed that no future Pari Passu Companion Loans are advanced. In general, the Mortgage Loan Sellers relied on either full-year operating statements, rolling 12-month operating statements and/or applicable year-to-date financial statements, if available, and on rent rolls for all Rental Properties that were current as of a date not earlier than six months prior to the respective date of origination in determining Net Cash Flow for the Mortgaged Properties.
In the case of the certain Mortgage Loans, with respect to which a portion of the related Mortgaged Property has been leased to an affiliate of the related borrower (or to the related borrower itself), as tenant, but the related Mortgaged Property is not used by such tenant for business operations but instead is master leased in order to increase property net cash flow, the net cash flow for purposes of calculating DSCR includes the rent under such master lease.
In general, ‘‘Net Cash Flow’’ is the revenue derived from the use and operation of a Mortgaged Property less operating expenses (such as utilities, administrative expenses, repairs and maintenance, tenant improvement costs, leasing commissions, management fees and advertising), fixed expenses (such as insurance, real estate taxes and, if applicable, ground lease payments) and replacement reserves and an allowance for vacancies and credit losses. Net Cash Flow does not reflect interest expenses and non-cash items such as depreciation and amortization, and generally does not reflect capital expenditures, but does reflect reserves for replacements and an allowance for vacancies and credit losses. Each originator of commercial mortgage loans has its own underwriting criteria, and no assurance can be given that adjustments or calculations made by one originator would be made by other lenders. See ‘‘RISK FACTORS—Risks Relating to Net Cash Flow’’ in this prospectus supplement.
In determining the ‘‘revenue’’ component of Net Cash Flow for each Rental Property, the applicable Mortgage Loan Seller generally relied on the most recent rent roll and/or other known, signed tenant leases, executed extension options, master leases or other indications of anticipated income (generally supported by market considerations, cash reserves or letters of credit) supplied and, where the actual vacancy shown thereon and the market vacancy was less than 5.0%, assumed a 5.0% vacancy in determining revenue from rents, except that in the case of certain non-multifamily properties, space occupied by such anchor or single tenants or other large creditworthy tenants may have been disregarded (or a rate of less than 5.0% has been assumed) in performing the vacancy
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adjustment due to the length of the related leases or creditworthiness of such tenants, in accordance with the respective Mortgage Loan Seller’s underwriting standards. Where the actual or market vacancy was not less than 5.0%, the applicable Mortgage Loan Sellers determined revenue from rents by generally relying on the most recent rent roll and/or other known, signed leases, executed lease extension options, master leases or other indications of anticipated income (generally supported by market considerations, cash reserves or letters of credit) supplied and the greater of (a) actual historical vacancy at the related Mortgaged Property, (b) historical vacancy at comparable properties in the same market as the related Mortgaged Property, and (c) 5.0%. In determining rental revenue for multifamily and self storage properties, the Mortgage Loan Sellers generally either reviewed rental revenue shown on the certified rolling 12-month operating statements, the rolling 3-month operating statements for multifamily properties or annualized the rental revenue and reimbursement of expenses shown on rent rolls or operating statements with respect to the prior one-to-twelve month periods. For the other Rental Properties, the Mortgage Loan Sellers generally annualized rental revenue shown on the most recent certified rent roll (as applicable), after applying the vacancy factor, without further regard to the terms (including expiration dates) of the leases shown thereon. In the case of hospitality properties, gross receipts were generally determined based upon the average occupancy not to exceed 75.0% and daily rates achieved during the prior two-to-three year annual reporting period. In the case of residential health care facilities, receipts were based on historical occupancy levels, historical operating revenues and then current occupancy rates. Occupancy rates for the private health care facilities were generally within then current market ranges, and vacancy levels were generally a minimum of 5.0%. In general, any non-recurring items and non-property related revenue were eliminated from the calculation except in the case of residential health care facilities. Notwithstanding the foregoing, as indicated on Annex A-1, in certain cases, historical income and revenue information was not utilized in determining underwritten Net Cash Flow because such historical information either was not available or was not an accurate reflection of the current status of the related Mortgaged Property as a result of a change in circumstances at the related Mortgaged Property. In those cases, the related Mortgage Loan Seller generally relied on comparative market and sub-market leasing assumptions (including rental rates and vacancy), master leases and other potential revenue generators as well as budget projections provided by the borrower and information contained in the related mortgaged property appraisal in determining Net Cash Flow. However, with respect to 1 Mortgage Loan (loan number 1), representing 19.0% of the Cut-Off Date Pool Balance (65.5% of the Cut-Off Date Group 2 Balance), underwritten Net Cash Flow was determined using future cash flow projections that include various assumptions including the following: (1) an annual rate of conversion of units from rent-stabilized units to deregulated units consistent with a rate of conversion assumed by the appraisal of the Mortgaged Property, resulting in 6,397 deregulated units in existence by January 1, 2011, and (2) increases in (a) major capital improvements, (b) revenues from retail, professional and parking spaces and (c) real estate tax expenses, based on the appraisal’s projections for 2011. Conversion of units from rent-stabilized units to deregulated units at a rate lower than the assumed rate would have a negative impact on the underwritten DSCR. See ‘‘RISK FACTORS—Litigation May Have Adverse Effect on Borrowers’’ in the prospectus supplement.
In determining the ‘‘expense’’ component of Net Cash Flow for each Mortgaged Property, the Mortgage Loan Sellers generally relied on rolling 12-month operating statements and/or full-year or year-to-date financial statements supplied by the related borrower, except that (a) if tax or insurance expense information more current than that reflected in the financial statements was available, the newer information was used, (b) property management fees were generally assumed to be 1.0% to 7.0% of effective gross revenue (except with respect to full service hospitality properties, where a minimum of 3.0% of gross receipts was assumed, with respect to limited service hospitality properties, where a minimum of 4.0% of gross receipts was assumed, and with respect to single tenant properties, where fees as low as 1.0% of effective gross receipts were assumed), (c) assumptions were made with respect to reserves for leasing commissions, tenant improvement expenses and capital expenditures and (d) expenses were assumed to include annual replacement reserves. See ‘‘—Wachovia’s Underwriting Standards—Escrow Requirements—Replacement Reserves’’ and ‘‘—Artesia’s Underwriting Standards—Escrow Requirements’’ in this prospectus supplement. In addition, in some
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instances, the Mortgage Loan Sellers recharacterized as capital expenditures those items reported by borrowers as operating expenses (thus increasing ‘‘net cash flow’’) where the Mortgage Loan Sellers determined appropriate.
The borrowers’ financial information used to determine Net Cash Flow was in most cases borrower certified, but unaudited, and neither the Mortgage Loan Sellers nor the Depositor verified their accuracy.
(ii) References to ‘‘Cut-Off Date LTV’’ and ‘‘Cut-Off Date LTV Ratio’’ are references to the ratio, expressed as a percentage, of the Cut-Off Date Balance of a Mortgage Loan (or, in the case of the Peter Cooper Village & Stuyvesant Town Loan, the Five Times Square Loan, the State Street Financial Center Loan and the 485 Lexington Avenue Loan, or the related Whole Loan) to the appraised value of the related Mortgaged Property as shown on the most recent third-party appraisal thereof available to the Mortgage Loan Sellers, which for 20 Mortgaged Properties securing, in whole or in part, 20 Mortgage Loans (loan numbers 9, 19.01, 21, 27, 32, 33, 36, 37, 38, 43, 67, 109, 123, 124, 125, 130, 133, 145, 184 and 190), representing, by allocated loan amount, approximately 7.8% of the Cut-Off Date Pool Balance (14 Mortgage Loans in Loan Group 1 or 8.4% of the Cut-Off Date Group 1 Balance and 6 Mortgage Loans in Loan Group 2 or 6.3% of the Cut-Off Date Group 2 Balance), the appraised value represented is the ‘‘as-stabilized’’ value. The table below shows the Cut-Off Date LTV Ratios calculated using the ‘‘as-is’’ appraised values and the ‘‘as-stabilized’’ appraised values for the 20 Mortgage Loans:
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Loan Name | ![]() | ![]() | Mortgage Loan Number | ![]() | ![]() | ‘‘As-Is’’ Cut-Off Date LTV | ![]() | ![]() | ‘‘As-Is’’ Date | ![]() | ![]() | ‘‘As-Stabilized’’ Cut-Off Date LTV | ![]() | ![]() | As-Stabilized Date | |||||||||
Bank One Center | ![]() | ![]() | ![]() | ![]() | 9 | ![]() | ![]() | ![]() | ![]() | ![]() | 83.3 | % | ![]() | ![]() | 10/4/2006 | ![]() | ![]() | ![]() | ![]() | 72.9 | % | ![]() | ![]() | 10/1/2009 |
211 Grove Street | ![]() | ![]() | ![]() | ![]() | 19.01 | ![]() | ![]() | ![]() | ![]() | ![]() | 83.0 | % | ![]() | ![]() | 11/24/2006 | ![]() | ![]() | ![]() | ![]() | 80.0 | % | ![]() | ![]() | 12/1/2007 |
Gateway Crossing Center | ![]() | ![]() | ![]() | ![]() | 21 | ![]() | ![]() | ![]() | ![]() | ![]() | 83.3 | % | ![]() | ![]() | 11/17/2006 | ![]() | ![]() | ![]() | ![]() | 79.4 | % | ![]() | ![]() | 5/1/2007 |
The Aetna Building | ![]() | ![]() | ![]() | ![]() | 27 | ![]() | ![]() | ![]() | ![]() | ![]() | 87.7 | % | ![]() | ![]() | 1/5/2007 | ![]() | ![]() | ![]() | ![]() | 73.5 | % | ![]() | ![]() | 8/1/2008 |
Park Plaza Apartments | ![]() | ![]() | ![]() | ![]() | 32 | ![]() | ![]() | ![]() | ![]() | ![]() | 76.2 | % | ![]() | ![]() | 10/19/2006 | ![]() | ![]() | ![]() | ![]() | 70.5 | % | ![]() | ![]() | 10/19/2007 |
Eastland Center | ![]() | ![]() | ![]() | ![]() | 33 | ![]() | ![]() | ![]() | ![]() | ![]() | 71.0 | % | ![]() | ![]() | 9/1/2006 | ![]() | ![]() | ![]() | ![]() | 65.7 | % | ![]() | ![]() | 9/1/2007 |
Waterstone At The Grove | ![]() | ![]() | ![]() | ![]() | 36 | ![]() | ![]() | ![]() | ![]() | ![]() | 82.4 | % | ![]() | ![]() | 11/22/2006 | ![]() | ![]() | ![]() | ![]() | 69.9 | % | ![]() | ![]() | 11/22/2008 |
Southern Center | ![]() | ![]() | ![]() | ![]() | 37 | ![]() | ![]() | ![]() | ![]() | ![]() | 94.5 | % | ![]() | ![]() | 12/14/2006 | ![]() | ![]() | ![]() | ![]() | 78.8 | % | ![]() | ![]() | 12/1/2007 |
Marina Square | ![]() | ![]() | ![]() | ![]() | 38 | ![]() | ![]() | ![]() | ![]() | ![]() | 81.3 | % | ![]() | ![]() | 11/16/2006 | ![]() | ![]() | ![]() | ![]() | 80.0 | % | ![]() | ![]() | 6/1/2007 |
The Morgan Apartments | ![]() | ![]() | ![]() | ![]() | 43 | ![]() | ![]() | ![]() | ![]() | ![]() | 88.4 | % | ![]() | ![]() | 10/19/2006 | ![]() | ![]() | ![]() | ![]() | 77.1 | % | ![]() | ![]() | 11/1/2007 |
Storbox Self Storage | ![]() | ![]() | ![]() | ![]() | 67 | ![]() | ![]() | ![]() | ![]() | ![]() | 67.4 | % | ![]() | ![]() | 12/12/2006 | ![]() | ![]() | ![]() | ![]() | 58.7 | % | ![]() | ![]() | 12/12/2006 |
Paradise Foothills Apartments | ![]() | ![]() | ![]() | ![]() | 109 | ![]() | ![]() | ![]() | ![]() | ![]() | 77.8 | % | ![]() | ![]() | 11/21/2006 | ![]() | ![]() | ![]() | ![]() | 71.0 | % | ![]() | ![]() | 11/21/2007 |
Arbor Park Apartments | ![]() | ![]() | ![]() | ![]() | 123 | ![]() | ![]() | ![]() | ![]() | ![]() | 93.0 | % | ![]() | ![]() | 11/20/2006 | ![]() | ![]() | ![]() | ![]() | 73.3 | % | ![]() | ![]() | 5/1/2008 |
Crossroads Professional Center | ![]() | ![]() | ![]() | ![]() | 124 | ![]() | ![]() | ![]() | ![]() | ![]() | 80.6 | % | ![]() | ![]() | 11/14/2006 | ![]() | ![]() | ![]() | ![]() | 71.2 | % | ![]() | ![]() | 5/14/2007 |
Turnpike Business Park | ![]() | ![]() | ![]() | ![]() | 125 | ![]() | ![]() | ![]() | ![]() | ![]() | 78.8 | % | ![]() | ![]() | 11/10/2006 | ![]() | ![]() | ![]() | ![]() | 68.9 | % | ![]() | ![]() | 12/1/2008 |
Northwest Professional Center | ![]() | ![]() | ![]() | ![]() | 130 | ![]() | ![]() | ![]() | ![]() | ![]() | 84.6 | % | ![]() | ![]() | 11/1/2006 | ![]() | ![]() | ![]() | ![]() | 79.7 | % | ![]() | ![]() | 5/1/2007 |
The Bent Tree Apartments | ![]() | ![]() | ![]() | ![]() | 133 | ![]() | ![]() | ![]() | ![]() | ![]() | 79.9 | % | ![]() | ![]() | 11/15/2006 | ![]() | ![]() | ![]() | ![]() | 71.4 | % | ![]() | ![]() | 11/15/2007 |
BMG Warehouse | ![]() | ![]() | ![]() | ![]() | 145 | ![]() | ![]() | ![]() | ![]() | ![]() | 68.3 | % | ![]() | ![]() | 11/1/2006 | ![]() | ![]() | ![]() | ![]() | 61.7 | % | ![]() | ![]() | 11/1/2007 |
Lakeside at College Park | ![]() | ![]() | ![]() | ![]() | 184 | ![]() | ![]() | ![]() | ![]() | ![]() | 82.3 | % | ![]() | ![]() | 10/6/2006 | ![]() | ![]() | ![]() | ![]() | 74.3 | % | ![]() | ![]() | 10/1/2008 |
Ahwatukee Retail | ![]() | ![]() | ![]() | ![]() | 190 | ![]() | ![]() | ![]() | ![]() | ![]() | 74.6 | % | ![]() | ![]() | 11/8/2006 | ![]() | ![]() | ![]() | ![]() | 68.5 | % | ![]() | ![]() | 11/1/2007 |
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(iii) References to ‘‘Maturity Date LTV Ratio’’ and ‘‘LTV at ARD or Maturity’’ are references to the ratio, expressed as a percentage, of the expected balance of a Balloon Loan (or, in the case of the Peter Cooper Village & Stuyvesant Town Loan, the Five Times Square Loan, the State Street Financial Center Loan and the 485 Lexington Avenue Loan, or the related Whole Loan) on its scheduled maturity date (or for an ARD Loan on its Anticipated Repayment Date) (prior to the payment of any Balloon Payment or principal prepayments) to the appraised value of portions of the related Mortgaged Property as shown on the most recent third-party appraisal thereof available to the Mortgage Loan Sellers, which for 20 Mortgaged Properties securing in whole or in part 20 Mortgage Loans (loan numbers 9, 19.01, 21, 27, 32, 33, 36, 37, 38, 43, 67, 109, 123, 124, 125, 130, 133, 145, 184 and 190), representing, by allocated loan amount, approximately 7.8% of the Cut-Off Date
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Pool Balance (14 Mortgage Loans in Loan Group 1 or 8.4% of the Cut-Off Date Group 1 Balance and 6 Mortgage Loans in Loan Group 2 or 6.3% of the Cut-Off Date Group 2 Balance), the appraised value represented is the ‘‘as-stabilized’’ value. The table below shows the Maturity Date LTV Ratios calculated using the ‘‘as-is’’ appraised values and the ‘‘as-stabilized’’ appraised values for the 20 Mortgage Loans:
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Loan Name | ![]() | ![]() | Mortgage Loan Number | ![]() | ![]() | ‘‘As-Is’’ Maturity Date LTV | ![]() | ![]() | ‘‘As-Is’’ Date | ![]() | ![]() | ‘‘As-Stabilized’’ Maturity Date LTV | ![]() | ![]() | As-Stabilized Date | |||||||||
Bank One Center | ![]() | ![]() | ![]() | ![]() | 9 | ![]() | ![]() | ![]() | ![]() | ![]() | 77.7 | % | ![]() | ![]() | 10/4/2006 | ![]() | ![]() | ![]() | ![]() | 68.0 | % | ![]() | ![]() | 10/1/2009 |
211 Grove Street | ![]() | ![]() | ![]() | ![]() | 19.01 | ![]() | ![]() | ![]() | ![]() | ![]() | 83.0 | % | ![]() | ![]() | 11/24/2006 | ![]() | ![]() | ![]() | ![]() | 80.0 | % | ![]() | ![]() | 12/1/2007 |
Gateway Crossing Center | ![]() | ![]() | ![]() | ![]() | 21 | ![]() | ![]() | ![]() | ![]() | ![]() | 77.5 | % | ![]() | ![]() | 11/17/2006 | ![]() | ![]() | ![]() | ![]() | 73.8 | % | ![]() | ![]() | 5/1/2007 |
The Aetna Building | ![]() | ![]() | ![]() | ![]() | 27 | ![]() | ![]() | ![]() | ![]() | ![]() | 87.7 | % | ![]() | ![]() | 1/5/2007 | ![]() | ![]() | ![]() | ![]() | 73.5 | % | ![]() | ![]() | 8/1/2008 |
Park Plaza Apartments | ![]() | ![]() | ![]() | ![]() | 32 | ![]() | ![]() | ![]() | ![]() | ![]() | 76.2 | % | ![]() | ![]() | 10/19/2006 | ![]() | ![]() | ![]() | ![]() | 70.5 | % | ![]() | ![]() | 10/19/2007 |
Eastland Center | ![]() | ![]() | ![]() | ![]() | 33 | ![]() | ![]() | ![]() | ![]() | ![]() | 65.8 | % | ![]() | ![]() | 9/1/2006 | ![]() | ![]() | ![]() | ![]() | 60.9 | % | ![]() | ![]() | 9/1/2007 |
Waterstone At The Grove | ![]() | ![]() | ![]() | ![]() | 36 | ![]() | ![]() | ![]() | ![]() | ![]() | 82.4 | % | ![]() | ![]() | 11/22/2006 | ![]() | ![]() | ![]() | ![]() | 69.9 | % | ![]() | ![]() | 11/22/2008 |
Southern Center | ![]() | ![]() | ![]() | ![]() | 37 | ![]() | ![]() | ![]() | ![]() | ![]() | 94.5 | % | ![]() | ![]() | 12/14/2006 | ![]() | ![]() | ![]() | ![]() | 78.8 | % | ![]() | ![]() | 12/1/2007 |
Marina Square | ![]() | ![]() | ![]() | ![]() | 38 | ![]() | ![]() | ![]() | ![]() | ![]() | 81.3 | % | ![]() | ![]() | 11/16/2006 | ![]() | ![]() | ![]() | ![]() | 80.0 | % | ![]() | ![]() | 6/1/2007 |
The Morgan Apartments | ![]() | ![]() | ![]() | ![]() | 43 | ![]() | ![]() | ![]() | ![]() | ![]() | 88.4 | % | ![]() | ![]() | 10/19/2006 | ![]() | ![]() | ![]() | ![]() | 77.1 | % | ![]() | ![]() | 11/1/2007 |
Storbox Self Storage | ![]() | ![]() | ![]() | ![]() | 67 | ![]() | ![]() | ![]() | ![]() | ![]() | 60.5 | % | ![]() | ![]() | 12/12/2006 | ![]() | ![]() | ![]() | ![]() | 52.7 | % | ![]() | ![]() | 12/12/2006 |
Paradise Foothills Apartments | ![]() | ![]() | ![]() | ![]() | 109 | ![]() | ![]() | ![]() | ![]() | ![]() | 77.8 | % | ![]() | ![]() | 11/21/2006 | ![]() | ![]() | ![]() | ![]() | 71.0 | % | ![]() | ![]() | 11/21/2007 |
Arbor Park Apartments | ![]() | ![]() | ![]() | ![]() | 123 | ![]() | ![]() | ![]() | ![]() | ![]() | 93.0 | % | ![]() | ![]() | 11/20/2006 | ![]() | ![]() | ![]() | ![]() | 73.3 | % | ![]() | ![]() | 5/1/2008 |
Crossroads Professional Center | ![]() | ![]() | ![]() | ![]() | 124 | ![]() | ![]() | ![]() | ![]() | ![]() | 75.0 | % | ![]() | ![]() | 11/14/2006 | ![]() | ![]() | ![]() | ![]() | 66.3 | % | ![]() | ![]() | 5/14/2007 |
Turnpike Business Park | ![]() | ![]() | ![]() | ![]() | 125 | ![]() | ![]() | ![]() | ![]() | ![]() | 73.5 | % | ![]() | ![]() | 11/10/2006 | ![]() | ![]() | ![]() | ![]() | 64.3 | % | ![]() | ![]() | 12/1/2008 |
Northwest Professional Center | ![]() | ![]() | ![]() | ![]() | 130 | ![]() | ![]() | ![]() | ![]() | ![]() | 71.7 | % | ![]() | ![]() | 11/1/2006 | ![]() | ![]() | ![]() | ![]() | 67.5 | % | ![]() | ![]() | 5/1/2007 |
The Bent Tree Apartments | ![]() | ![]() | ![]() | ![]() | 133 | ![]() | ![]() | ![]() | ![]() | ![]() | 79.9 | % | ![]() | ![]() | 11/15/2006 | ![]() | ![]() | ![]() | ![]() | 71.4 | % | ![]() | ![]() | 11/15/2007 |
BMG Warehouse | ![]() | ![]() | ![]() | ![]() | 145 | ![]() | ![]() | ![]() | ![]() | ![]() | 61.5 | % | ![]() | ![]() | 11/1/2006 | ![]() | ![]() | ![]() | ![]() | 55.5 | % | ![]() | ![]() | 11/1/2007 |
Lakeside at College Park | ![]() | ![]() | ![]() | ![]() | 184 | ![]() | ![]() | ![]() | ![]() | ![]() | 76.8 | % | ![]() | ![]() | 10/6/2006 | ![]() | ![]() | ![]() | ![]() | 69.3 | % | ![]() | ![]() | 10/1/2008 |
Ahwatukee Retail | ![]() | ![]() | ![]() | ![]() | 190 | ![]() | ![]() | ![]() | ![]() | ![]() | 65.8 | % | ![]() | ![]() | 11/8/2006 | ![]() | ![]() | ![]() | ![]() | 60.4 | % | ![]() | ![]() | 11/1/2007 |
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(iv) References to ‘‘Loan per Sq. Ft., Unit, Pad, Room or Bed’’ are, for each Mortgage Loan secured by a lien on a multifamily property, mobile home park, hospitality property or assisted living facility or other healthcare property or student housing property, respectively, references to the Cut-Off Date Balance of such Mortgage Loan (or, in the case of the Peter Cooper Village & Stuyvesant Town Loan, the Five Times Square Loan, the State Street Financial Center Loan and the 485 Lexington Avenue Loan, or the related Whole Loan) divided by the number of dwelling units, pads, guest rooms or beds, respectively, that the related Mortgaged Property comprises, and, for each Mortgage Loan secured by a lien on a retail, industrial/warehouse, self-storage or office property, references to the Cut-Off Date Balance of such Mortgage Loan (or, in the case of the Peter Cooper Village & Stuyvesant Town Loan, the Five Times Square Loan, the State Street Financial Center Loan and the 485 Lexington Avenue Loan, or the related Whole Loan) divided by the net rentable square foot area of the related Mortgaged Property.
(v) References to ‘‘Year Built’’ are references to the year that a Mortgaged Property was originally constructed or substantially renovated. With respect to any Mortgaged Property which was constructed in phases, the ‘‘Year Built’’ refers to the year that the first phase was originally constructed.
(vi) References to ‘‘weighted averages’’ or ‘‘WA’’ are references to averages weighted on the basis of the Cut-Off Date Balances of the related Mortgage Loans.
(vii) References to ‘‘Underwritten Replacement Reserves’’ represent estimated annual capital costs, as used by the Mortgage Loan Sellers in determining Net Cash Flow.
(viii) References to ‘‘Administrative Cost Rate’’ for each Mortgage Loan represent the sum of (a) the Master Servicing Fee Rate for such Mortgage Loan and (b) 0.00028%, which percentage represents the Trustee Fee Rate with respect to each Mortgage Loan. The Administrative Cost Rate for each Mortgage Loan is set forth on Annex A-1 hereto.
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(ix) References to ‘‘Remaining Term to Maturity’’ represent, with respect to each Mortgage Loan, the number of months remaining from the Cut-Off Date to the stated maturity date of such Mortgage Loan (or the remaining number of months to the Anticipated Repayment Date with respect to each ARD Loan).
(x) References to ‘‘Remaining Amortization Term’’ represent, with respect to each Mortgage Loan, the number of months remaining from the later of the Cut-Off Date and the end of any interest-only period, if any, to the month in which such Mortgage Loan would fully or substantially amortize in accordance with such loan’s amortization schedule without regard to any Balloon Payment, if any, due on such Mortgage Loan.
(xi) References to ‘‘L ( )’’ or ‘‘Lockout’’ or ‘‘Lockout Period’’ represent, with respect to each Mortgage Loan, the period during which prepayments of principal are prohibited and no substitution of Defeasance Collateral is permitted. The number indicated in the parentheses indicates the number of monthly payments of such period (calculated for each Mortgage Loan from the date of its origination). References to ‘‘O ( )’’ represent the number of monthly payments for which (a) no Prepayment Premium or Yield Maintenance Charge is assessed and (b) defeasance is no longer required. References to ‘‘YM ( )’’ represent the period for which the Yield Maintenance Charge is assessed. ‘‘3% ( )’’, ‘‘2% ( )’’ and ‘‘1% ( )’’ each represents the period for which a Prepayment Premium is assessed and the respective percentage used in the calculation thereof. The periods, if any, between consecutive Due Dates occurring prior to the maturity date or Anticipated Repayment Date, as applicable, of a Mortgage Loan during which the related borrower will have the right to prepay such Mortgage Loan without being required to pay a Prepayment Premium or a Yield Maintenance Charge (each such period, an ‘‘Open Period’’) with respect to all of the Mortgage Loans have been calculated as those Open Periods occurring immediately prior to the maturity date or Anticipated Repayment Date, as applicable, of such Mortgage Loan as set forth in the related Mortgage Loan documents.
(xii) References to ‘‘D ( )’’ or ‘‘Defeasance’’ represent, with respect to each Mortgage Loan, the period (in months) during which the related holder of the Mortgage has the right to require the related borrower, in lieu of a principal prepayment, to pledge to such holder Defeasance Collateral.
(xiii) References to ‘‘Occupancy Percentage’’ are, with respect to any Mortgaged Property, references as of the most recently available rent rolls to (a) in the case of multifamily properties and assisted living facilities, the percentage of units or pads rented, (b) in the case of office and retail properties, the percentage of the net rentable square footage rented and is exclusive of hospitality properties, and (c) in the case of self-storage facilities, either the percentage of the net rentable square footage rented or the percentage of units rented (depending on borrower reporting), and is exclusive of hospitality properties. For commercial properties, Occupancy Percentages may include tenants who have signed leases but who are not currently occupying their space.
(xiv) References to ‘‘Original Term to Maturity’’ are references to the term from origination to maturity for each Mortgage Loan (or the term from origination to the Anticipated Repayment Date with respect to each ARD Loan).
(xv) References to ‘‘NA’’ indicate that, with respect to a particular category of data, such data is not applicable.
(xvi) References to ‘‘NAV’’ indicate that, with respect to a particular category of data, such data is not available.
(xvii) References to ‘‘Capital Imp. Reserve’’ are references to funded reserves escrowed for repairs, replacements and corrections of issues outlined in the engineering reports.
(xviii) References to ‘‘Replacement Reserve’’ are references to funded reserves escrowed for ongoing items such as repairs and replacements, including, in the case of hospitality properties, reserves for furniture, fixtures and equipment. In certain cases, however, the subject reserve will be subject to a maximum amount, and once such maximum amount is reached, such reserve will not thereafter be funded, except, in some such cases, to the extent it is drawn upon.
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(xix) References to ‘‘TI/LC Reserve’’ are references to funded reserves escrowed for tenant improvement allowances and leasing commissions. In certain cases, however, the subject reserve will be subject to a maximum amount, and once such maximum amount is reached, such reserve will not thereafter be funded, except, in some such cases, to the extent it is drawn upon.
(xx) References to ‘‘Contract Rent’’ means the total rent that is, or is anticipated to be, specified in the lease or other rental contract as payable by the tenant to the property owner for the rental of a dwelling unit, including fees or charges for management and maintenance services. In determining Contract Rent for each unit, the following rules generally have been applied:
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(a) | The average Contract Rent for each unit type was based upon a rent roll certified by the owner of the property or as completed by the appraiser based upon information provided by the borrower. |
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(b) | Rent concessions were not considered (i.e., Contract Rent was not reduced by any rent concessions). Contract rent also has not been reduced by any policeman’s discount. |
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(c) | Where the tenant pays a portion of the rent and the remainder is paid by a federal, state, or local rental assistance program, the Contract Rent is the amount of the rent payment by the tenant, and the payment from the assistance program has been disregarded. |
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(d) | In computing average Contract Rent for units of each bedroom type, the units described in the following table have been treated as indicated in the table: |
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Unit Type | ![]() | ![]() | Included in Computation? | ![]() | ![]() | Contract Rent Used in Computation |
Vacant unit being offered for rent | ![]() | ![]() | Yes | ![]() | ![]() | Contract Rent being asked for that unit |
Unit that is vacant because undergoing renovation | ![]() | ![]() | No | ![]() | ![]() | Not applicable |
Unit being used as a rental office or model unit | ![]() | ![]() | Yes | ![]() | ![]() | Not applicable |
Unit occupied by an employee at a discounted rent | ![]() | ![]() | Yes | ![]() | ![]() | Contract Rent being asked for comparable units |
Unit shared by multiple tenants under their own leases (e.g., student housing or seniors housing) | ![]() | ![]() | Yes, as a single unit | ![]() | ![]() | The aggregate Contract Rent being paid by the tenants sharing the unit |
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(xxi) The sum in any column of any of the following tables may not equal the indicated total due to rounding.
Certain other additional characteristics of the Mortgage Loans presented on a loan-by-loan basis are set forth in Annex A-1 to this prospectus supplement. Additionally, certain of the anticipated characteristics of the Mortgage Loans are set forth in Annex B to this prospectus supplement, and certain additional information regarding the Mortgage Loans is set forth in this prospectus supplement below under ‘‘—Wachovia’s Underwriting Standards’’ and ‘‘—Artesia’s Underwriting Standards’’ and ‘‘—Assignment of the Mortgage Loans; Repurchases and Substitutions’’ and in the prospectus under ‘‘DESCRIPTION OF THE TRUST FUNDS—Mortgage Loans—Leases’’ and ‘‘CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS AND LEASES’’. Certain Mortgage Loans, set forth on Annex E, have scheduled principal payments that, assuming no prepayments are made prior to their related maturity dates and the other assumptions set forth under ‘‘YIELD AND MATURITY CONSIDERATIONS—Yield Considerations’’ in this prospectus supplement, are expected to support distributions to the holders of the Class A-1, Class A-2, Class A-3, Class A-4 and Class A-PB Certificates.
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Twenty Largest Mortgage Loans
The following table describes the twenty largest Mortgage Loans or groups of cross-collateralized Mortgage Loans in the Mortgage Pool by Cut-Off Date Balance:
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![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() |
Loan Name | ![]() | ![]() | Mortgage Loan Seller | ![]() | ![]() | Number of Mortgage Loans/ Mortgaged Properties | ![]() | ![]() | Loan Group | ![]() | ![]() | Cut-Off Date Balance | ![]() | ![]() | % of Initial Pool Balance | ![]() | ![]() | % of Initial Group Balance | ![]() | ![]() | Property Type | ![]() | ![]() | Cut-Off Date Balance Per SF/ Unit Room(1) | ![]() | ![]() | Weighted Average DSCR(1)(2) | ![]() | ![]() | Cut-Off Date LTV Ratio(1)(2) | ![]() | ![]() | LTV Ratio at Maturity or ARD(1)(2) | ![]() | ![]() | Weighted Average Mortgage Rate | ||||||||||||||||||||||||||||||
Peter Cooper Village & Stuyvesant Town(3) | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 2 | ![]() | ![]() | ![]() | ![]() | 2 | ![]() | ![]() | ![]() | ![]() | $ | 1,500,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 19.0 | % | ![]() | ![]() | ![]() | ![]() | 65.5 | % | ![]() | ![]() | Multifamily — Conventional | ![]() | ![]() | ![]() | $ | 267,213 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.73x | ![]() | ![]() | ![]() | ![]() | ![]() | 55.6 | % | ![]() | ![]() | ![]() | ![]() | 55.6 | % | ![]() | ![]() | ![]() | ![]() | 6.434 | % |
Five Times Square | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 536,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 6.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 9.5 | % | ![]() | ![]() | Office — CBD | ![]() | ![]() | ![]() | $ | 973 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.10x | ![]() | ![]() | ![]() | ![]() | ![]() | 80.0 | % | ![]() | ![]() | ![]() | ![]() | 80.0 | % | ![]() | ![]() | ![]() | ![]() | 5.454 | % |
350 Park Avenue | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 430,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.4 | ![]() | ![]() | ![]() | ![]() | ![]() | 7.7 | % | ![]() | ![]() | Office — CBD | ![]() | ![]() | ![]() | $ | 799 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.21x | ![]() | ![]() | ![]() | ![]() | ![]() | 78.2 | % | ![]() | ![]() | ![]() | ![]() | 78.2 | % | ![]() | ![]() | ![]() | ![]() | 5.482 | % |
State Street Financial Center | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 387,500,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 4.9 | ![]() | ![]() | ![]() | ![]() | ![]() | 6.9 | % | ![]() | ![]() | Office — CBD | ![]() | ![]() | ![]() | $ | 756 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.16x | ![]() | ![]() | ![]() | ![]() | ![]() | 87.2 | % | ![]() | ![]() | ![]() | ![]() | 87.2 | % | ![]() | ![]() | ![]() | ![]() | 5.659 | % |
485 Lexington Avenue | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 315,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 4.0 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.6 | % | ![]() | ![]() | Office — CBD | ![]() | ![]() | ![]() | $ | 492 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.20x | ![]() | ![]() | ![]() | ![]() | ![]() | 70.9 | % | ![]() | ![]() | ![]() | ![]() | 70.9 | % | ![]() | ![]() | ![]() | ![]() | 5.608 | % |
One South Dearborn | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 280,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.5 | ![]() | ![]() | ![]() | ![]() | ![]() | 5.0 | % | ![]() | ![]() | Office — CBD | ![]() | ![]() | ![]() | $ | 333 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.21x | ![]() | ![]() | ![]() | ![]() | ![]() | 80.0 | % | ![]() | ![]() | ![]() | ![]() | 80.0 | % | ![]() | ![]() | ![]() | ![]() | 6.136 | % |
One Congress Street | ![]() | ![]() | ![]() | ![]() | Artesia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 190,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.4 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.4 | % | ![]() | ![]() | Mixed Use — Parking Garage/Office/Retail | ![]() | ![]() | ![]() | $ | 158 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.30x | ![]() | ![]() | ![]() | ![]() | ![]() | 73.7 | % | ![]() | ![]() | ![]() | ![]() | 73.7 | % | ![]() | ![]() | ![]() | ![]() | 6.074 | % |
Four Seasons Aviara Resort - Carlsbad, CA | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 186,500,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.4 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.3 | % | ![]() | ![]() | Hospitality — Full Service | ![]() | ![]() | ![]() | $ | 566,869 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.31x | ![]() | ![]() | ![]() | ![]() | ![]() | 74.3 | % | ![]() | ![]() | ![]() | ![]() | 74.3 | % | ![]() | ![]() | ![]() | ![]() | 5.940 | % |
Bank One Center | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 180,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 3.2 | % | ![]() | ![]() | Office — CBD | ![]() | ![]() | ![]() | $ | 118 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.33x | ![]() | ![]() | ![]() | ![]() | ![]() | 72.9 | % | ![]() | ![]() | ![]() | ![]() | 68.0 | % | ![]() | ![]() | ![]() | ![]() | 5.767 | % |
9 West 57th Street | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 100,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.3 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.8 | % | ![]() | ![]() | Land — Office(4) | ![]() | ![]() | ![]() | $ | 72 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.18x | ![]() | ![]() | ![]() | ![]() | ![]() | 43.9 | % | ![]() | ![]() | ![]() | ![]() | 43.9 | % | ![]() | ![]() | ![]() | ![]() | 5.450 | % |
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | 10/ 11 | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | $ | 4,105,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 51.9 | % | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | 1.42x | ![]() | ![]() | ![]() | ![]() | ![]() | 69.1 | % | ![]() | ![]() | ![]() | ![]() | 68.9 | % | ![]() | ![]() | ![]() | ![]() | 5.957 | % | ||||||
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||
New York Marriott at the Brooklyn Bridge | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | $ | 95,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.2 | % | ![]() | ![]() | ![]() | ![]() | 1.7 | % | ![]() | ![]() | Hospitality — Full Service | ![]() | ![]() | ![]() | $ | 144,817 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.98x | ![]() | ![]() | ![]() | ![]() | ![]() | 53.4 | % | ![]() | ![]() | ![]() | ![]() | 46.9 | % | ![]() | ![]() | ![]() | ![]() | 5.640 | % |
One & Two Eldridge Place | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 75,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.9 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.3 | % | ![]() | ![]() | Office — Suburban | ![]() | ![]() | ![]() | $ | 145 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.28x | ![]() | ![]() | ![]() | ![]() | ![]() | 74.3 | % | ![]() | ![]() | ![]() | ![]() | 68.9 | % | ![]() | ![]() | ![]() | ![]() | 5.410 | % |
NJ Office Pool | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 4 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 62,118,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.1 | % | ![]() | ![]() | Office — Suburban | ![]() | ![]() | ![]() | $ | 116 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.39x | ![]() | ![]() | ![]() | ![]() | ![]() | 60.8 | % | ![]() | ![]() | ![]() | ![]() | 60.8 | % | ![]() | ![]() | ![]() | ![]() | 6.170 | % |
PNC Corporate Plaza | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 61,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.1 | % | ![]() | ![]() | Office — CBD | ![]() | ![]() | ![]() | $ | 105 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.22x | ![]() | ![]() | ![]() | ![]() | ![]() | 77.8 | % | ![]() | ![]() | ![]() | ![]() | 72.8 | % | ![]() | ![]() | ![]() | ![]() | 5.996 | % |
1384 Broadway | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 60,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.1 | % | ![]() | ![]() | Office — CBD | ![]() | ![]() | ![]() | $ | 294 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.21x | ![]() | ![]() | ![]() | ![]() | ![]() | 77.1 | % | ![]() | ![]() | ![]() | ![]() | 69.3 | % | ![]() | ![]() | ![]() | ![]() | 5.700 | % |
Duane Reade - - 661 Eighth Avenue, New York, NY | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 60,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.1 | % | ![]() | ![]() | Retail — Single Tenant | ![]() | ![]() | ![]() | $ | 4,688 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.06x | ![]() | ![]() | ![]() | ![]() | ![]() | 75.0 | % | ![]() | ![]() | ![]() | ![]() | 75.0 | % | ![]() | ![]() | ![]() | ![]() | 5.850 | % |
818 West 7th Street | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 59,915,357 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.8 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.1 | % | ![]() | ![]() | Office — CBD | ![]() | ![]() | ![]() | $ | 159 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.32x | ![]() | ![]() | ![]() | ![]() | ![]() | 70.5 | % | ![]() | ![]() | ![]() | ![]() | 58.8 | % | ![]() | ![]() | ![]() | ![]() | 5.430 | % |
Spring Mill Corporate Center | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 1 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 57,100,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.0 | % | ![]() | ![]() | Mixed Use — Office/Industrial | ![]() | ![]() | ![]() | $ | 92 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.34x | ![]() | ![]() | ![]() | ![]() | ![]() | 70.8 | % | ![]() | ![]() | ![]() | ![]() | 65.5 | % | ![]() | ![]() | ![]() | ![]() | 5.810 | % |
Wildcat Self Storage Pool | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 9 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 53,200,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.9 | % | ![]() | ![]() | Self Storage | ![]() | ![]() | ![]() | $ | 67 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.37x | ![]() | ![]() | ![]() | ![]() | ![]() | 80.0 | % | ![]() | ![]() | ![]() | ![]() | 80.0 | % | ![]() | ![]() | ![]() | ![]() | 5.700 | % |
Sealy C Pool | ![]() | ![]() | ![]() | ![]() | Wachovia | ![]() | ![]() | ![]() | 1 / 14 | ![]() | ![]() | ![]() | ![]() | 1 | ![]() | ![]() | ![]() | ![]() | ![]() | 53,025,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.7 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.9 | % | ![]() | ![]() | Industrial — Flex | ![]() | ![]() | ![]() | $ | 53 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.24x | ![]() | ![]() | ![]() | ![]() | ![]() | 75.0 | % | ![]() | ![]() | ![]() | ![]() | 70.0 | % | ![]() | ![]() | ![]() | ![]() | 5.830 | % |
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | 10 / 34 | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | $ | 636,358,357 | ![]() | ![]() | ![]() | ![]() | ![]() | 8.1 | % | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | 1.38x | ![]() | ![]() | ![]() | ![]() | ![]() | 70.4 | % | ![]() | ![]() | ![]() | ![]() | 65.6 | % | ![]() | ![]() | ![]() | ![]() | 5.741 | % | ||||||
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | 20 / 45 | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | $ | 4,741,358,357 | ![]() | ![]() | ![]() | ![]() | ![]() | 60.0 | % | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | 1.41x | ![]() | ![]() | ![]() | ![]() | ![]() | 69.3 | % | ![]() | ![]() | ![]() | ![]() | 68.5 | % | ![]() | ![]() | ![]() | ![]() | 5.928 | % | ||||||
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(1) | The Peter Cooper Village & Stuyvesant Town Loan, the Five Times Square Loan, the State Street Financial Center Loan and the 485 Lexington Avenue Loan is part of a split loan structure that includes one or more pari passu companion loans that are not included in the Trust Fund. With respect to these Mortgage Loans, unless otherwise specified, the calculation of LTV Ratios, DSC Ratios and Cut-Off Date Balance per square foot/unit are based on the aggregate indebtedness of or debt service on, as applicable, the related Mortgage Loan and the related pari passu companion loan, but not any related subordinate companion loan or future pari passu companion loan. |
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(2) | Certain of the Mortgage Loans reflect LTV Ratios that have been calculated on an ‘‘as-stabilized’’ basis, or have LTV Ratios or DSC Ratios that have been adjusted to take into account certain cash reserves or letters of credit. See ‘‘Additional Mortgage Loan Information’’ herein. Also, see ‘‘DESCRIPTION OF THE MORTGAGE POOL—Additional Mortgage Loan Information’’ and ‘‘RISK FACTORS—Risks Relating to Net Cash Flow’’ and ‘‘—Inspections and Appraisals May Not Accurately Reflect Value or Condition of Mortgaged Property’’ in this prospectus supplement. |
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(3) | The underwritten net cash flow used to calculate the DSC Ratio was determined using future cash flow projections that include various assumptions including an assumed annual rate of conversion of units from rent-stabilized units to deregulated units. The DSC Ratio for the related Mortgaged Property calculated based on the net operating income for year 2006 is 0.58x. See ‘‘RISK FACTORS—Risks Relating to Net Cash Flow’’ in this prospectus supplement. |
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(4) | The Mortgaged Property related to the 9 West 57th Street Loan is improved by an office building that is not part of the collateral for the Mortgage Loan. |
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Detailed descriptions of loan numbers 1 through 10 and certain additional information with respect to loan numbers 11 through 20 are attached to this prospectus supplement as Annex D. Prospective investors are encouraged to carefully review the entire prospectus supplement, including each attached Annex, which are considered part of this prospectus supplement.
The Sponsors
Wachovia Bank, National Association
General. Wachovia Bank, National Association (‘‘Wachovia’’), a national banking association, is a Sponsor of this securitization, originated or acquired and underwrote 195 Mortgage Loans included in the Trust Fund (including 1 Mortgage Loan which Wachovia co-originated and co-underwrote with Column). Wachovia is a national bank and acquires and originates mortgage loans for its own portfolio and for public and private securitizations through its network of 13 regional offices and approximately 3,400 financial centers. Wachovia’s principal offices are located in Charlotte, North Carolina, and its telephone number is (704) 374-6161. Wachovia is also acting as a Mortgage Loan Seller and as the Master Servicer with respect to the Offered Certificates. Wachovia is an affiliate of Wachovia Capital Markets, LLC, one of the Underwriters, and of Wachovia Commercial Mortgage Securities, Inc. (the ‘‘Depositor’’). See ‘‘THE SPONSOR’’ in the accompanying prospectus.
Wachovia’s Securitization Program. One of Wachovia’s primary business lines is the underwriting and origination of mortgage loans secured by commercial or multifamily properties. With respect to mortgage loans that are originated for securitization purposes, Wachovia sells these loans through its CMBS securitization program. Wachovia, with its commercial mortgage lending affiliates and predecessors, began originating and securitizing commercial mortgage loans in 1995. As of October 1, 2006, the total amount of commercial mortgage loans originated and securitized by Wachovia since 1995 is approximately $57.0 billion. Approximately $53.7 billion have been securitized by an affiliate of Wachovia acting as depositor, and approximately $3.9 billion have been securitized by an unaffiliated entity acting as depositor. In its fiscal year ended December 31, 2005, Wachovia originated and securitized approximately $16.2 billion of commercial mortgage loans, of which approximately $15.7 billion were securitized by an affiliate of Wachovia acting as depositor, and approximately $500 million were securitized by an unaffiliated entity acting as depositor.
Wachovia and its affiliates have been and are currently involved with the origination and/or securitization of auto loans and leases, student loans, home equity loans, credit card receivables, manufactured housing contracts, commercial equipment leases, residential mortgage loans and commercial mortgage loans, as well as less traditional asset classes. Wachovia and its affiliates have also participated in a variety of collateralized loan obligation transactions, synthetic securitizations and asset-backed commercial paper programs. Wachovia and its affiliates have served as sponsors, issuers, dealers, and servicers in a wide array of securitization transactions. Additionally, Wachovia acts as master servicer, special servicer and/or swap counterparty on various commercial mortgage-backed securitizations.
Wachovia’s commercial mortgage loan securitization program has grown from approximately $423 million of securitized commercial mortgage loans in 1995 to approximately $3.4 billion of securitized commercial mortgage loans in 2001 and to approximately $16.2 billion of securitized commercial mortgage loans in 2005. The commercial mortgage loans originated and securitized by Wachovia include both fixed and floating-rate loans, that generally range in size from $2 million up to $500 million. Wachovia primarily originates loans secured by retail, office, multifamily, hospitality, industrial and self-storage properties, but also originates loans secured by manufactured housing communities, land subject to a ground lease and mixed use properties. Wachovia originates loans in each of the 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands.
As a Sponsor, Wachovia originates mortgage loans with the intent to securitize them and, either by itself or together with other sponsors or loan sellers, initiates a securitization by transferring the mortgage loans to a depositor, which in turn transfers them to the issuer for the related securitization. In coordination with Wachovia Capital Markets, LLC and other underwriters, Wachovia works with rating agencies, other loan sellers and servicers in structuring securitization transactions. Wachovia, or an
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affiliate, acts as sponsor, originator, underwriter or loan seller both in transactions in which it is the sole sponsor and mortgage loan seller as well as in transactions in which other entities act as sponsor and/or mortgage loan seller. Wachovia’s primary securitization program is the Wachovia Bank Commercial Mortgage Trust program, in which Wachovia and other national banks and corporations generally act as mortgage loan sellers and Wachovia Commercial Mortgage Securities, Inc., an affiliate of Wachovia, acts as the depositor. As of October 1, 2006, Wachovia securitized approximately $55.3 billion through the Wachovia Bank Commercial Mortgage Trust program (or predecessor programs).
Wachovia’s Underwriting Standards
General. Wachovia’s commercial real estate finance group has the authority, with the approval from the appropriate credit committee, to originate fixed-rate, first lien commercial or multifamily mortgage loans for securitization. Wachovia’s commercial real estate finance operation is staffed by real estate professionals. Wachovia’s loan underwriting group is an integral component of the commercial real estate finance group which also includes groups responsible for loan origination and closing mortgage loans.
Upon receipt of a loan application, Wachovia’s loan underwriters commence an extensive review of the borrower’s financial condition and creditworthiness and the real property which will secure the loan.
Notwithstanding the discussion below, given the unique nature of income-producing real properties, the underwriting and origination procedures and the credit analysis with respect to any particular multifamily or commercial mortgage loan may differ significantly from one asset to another, and will be driven by circumstances particular to that property, including, among others, its type, current use, physical quality, size, environmental condition, location, market conditions, capital reserve requirements and additional collateral, tenants and leases, borrower identity, borrower sponsorship and/or performance history, and certain other factors. Consequently, there can be no assurance that the underwriting of any particular multifamily or commercial mortgage loan will conform to the general guidelines described in this ‘‘—Wachovia’s Underwriting Standards’’ section.
Loan Analysis. Generally, Wachovia performs both a credit analysis and collateral analysis with respect to a loan applicant and the real estate that will secure the loan. In general, credit analysis of the borrower and the real estate includes a review of historical financial statements, including rent rolls (generally unaudited), third-party credit reports, judgment, lien, bankruptcy and pending litigation searches and, if applicable, the loan payment history of the borrower. Wachovia typically performs a qualitative analysis which incorporates independent credit checks and published debt and equity information with respect to certain principals of the borrower as well as the borrower itself. Borrowers are generally required to be single-purpose entities although they are generally not required to be structured to limit the possibility of becoming insolvent or bankrupt. The collateral analysis typically includes an analysis of the historical property operating statements, rent rolls, operating budgets, a projection of future performance, if applicable, and a review of tenant leases. Wachovia generally requires third-party appraisals, as well as environmental and property condition reports and, if determined by Wachovia to be applicable, seismic reports. Each report is reviewed for acceptability by a staff member of Wachovia or a third-party consultant for compliance with program standards. Generally, the results of these reviews are incorporated into the underwriting report. In some instances, one or more provisions of the guidelines were waived or modified by Wachovia where it was determined not to adversely affect the Mortgage Loans originated by it in any material respect.
Loan Approval. Prior to commitment, all mortgage loans to be originated by Wachovia must be approved by one or more—depending on loan size—specified internal committees or by officers of Wachovia, which may approve a mortgage loan as recommended, request additional due diligence, modify the loan terms or decline a loan transaction.
Determination of Revenue and Expense at a Mortgaged Property. The repayment of a Mortgage Loan is typically dependent upon the successful operation of the related Mortgaged Property and the ability of that Mortgaged Property to generate income sufficient to make payments on the loan. Accordingly, Wachovia will analyze whether cash flow expected to be derived from the Mortgaged Property will be sufficient to make the required payments under that Mortgage Loan over its expected term, taking into account, among other things, revenues and expenses for, and other debt currently
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secured by, or that in the future may be secured by, the Mortgaged Property as well as debt secured by pledges of the ownership interests in the related borrower, any related debt service reserves and other sources of income or payment or factors expected to affect such matters.
Wachovia uses both objective and subjective measures to determine the revenue generated and the expenses incurred at each Mortgaged Property. In determining the ‘‘revenue’’ component of Net Cash Flow for each Mortgaged Property securing a Wachovia Mortgage Loan, Wachovia generally relied on a rent roll and/or other known, signed tenant leases, executed extension options, or other indications of anticipated income (generally supported by market considerations, cash reserves or letters of credit) supplied and, where the actual vacancy shown thereon and the market vacancy was less than 5.0%, assumed a 5.0% vacancy in determining revenue from rents, except that in the case of certain non-multifamily properties, space occupied by such anchor or single tenants or other large creditworthy tenants may have been disregarded (or a rate of less than 5.0% has been assumed) in performing the vacancy adjustment due to the length of the related leases or creditworthiness of such tenants. Where the actual or market vacancy was greater than 5.0%, Wachovia determined revenue from rents by generally relying on a rent roll and/or other known, signed leases, executed lease extension options, or other indications of anticipated income (generally supported by market considerations, cash reserves or letters of credit) supplied and the greater of (a) actual historical vacancy at the related Mortgaged Property, (b) historical vacancy at comparable properties in the same market as the related Mortgaged Property, and (c) 5.0%. In determining revenue for multifamily and self storage properties, the Mortgage Loan Sellers generally either reviewed rental revenue shown on the rolling 3-month operating statements for multifamily properties or annualized the rental revenue and reimbursement of expenses shown on rent rolls or operating statements with respect to the prior one-to-twelve month periods. In the case of hospitality properties, gross receipts were generally determined based upon the average occupancy not to exceed 85.0% and daily rates achieved during the prior one-to-three year annual reporting period. In the case of residential health care facilities, receipts were based on historical occupancy levels, historical operating revenues and then current occupancy rates. Occupancy rates for the private health care facilities were generally within then current market ranges, and vacancy levels were generally a minimum of 5.0%. The borrowers’ financial information used to determine revenue was in most cases borrower certified, but unaudited, and neither the Mortgage Loan Sellers nor the Depositor verified their accuracy. In general, any non-recurring items and non-property related revenue were eliminated from the calculation except in the case of residential health care facilities.
In determining the ‘‘expense’’ component of Net Cash Flow for each Mortgaged Property securing a Wachovia Mortgage Loan, Wachovia generally relied on rolling 12-month operating statements and/or full-year or year-to-date financial statements supplied by the related borrower, except that (a) if tax or insurance expense information more current than that reflected in the financial statements was available, the newer information was used, (b) property management fees were generally assumed to be 1.0% to 7.0% of effective gross revenue, (c) assumptions were made with respect to reserves for leasing commissions, tenant improvement expenses and capital expenditures and (d) expenses were assumed to include annual replacement reserves. In addition, in some instances, Wachovia recharacterized as capital expenditures those items reported by borrowers as operating expenses (thus increasing ‘‘net cash flow’’) where Wachovia determined appropriate.
The amounts described as revenue and expense in the two preceding paragraphs are often highly subjective values. For example, when calculating revenue or expense for a Mortgaged Property securing a Wachovia Mortgage Loan, Wachovia may make assumptions regarding projected rental income, expenses and/or occupancy, including, without limitation, one or more of the following:
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• | the assumption that a particular tenant at a Mortgaged Property has executed a lease, but has not yet taken occupancy and/or has not yet commenced paying rent, will take occupancy and commence paying rent on a future date; |
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• | the assumption that an unexecuted lease that is currently being negotiated with respect to a particular tenant at a Mortgaged Property or is out for signature will be executed and in place on a future date; |
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• | the assumption that a portion of currently vacant and unleased space at a Mortgaged Property will be leased at current market rates and consistent with occupancy rates of comparable properties in the subject market; |
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• | the assumption that certain rental income that is to be payable commencing on a future date under a signed lease, but where the subject tenant is in an initial rent abatement or free rent period or has not yet taken occupancy, will be paid commencing on such future date; |
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• | assumptions regarding the probability of renewal or extension of particular leases and/or the re-leasing of certain space at a Mortgaged Property and the anticipated effect on capital and re-leasing expenditures; |
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• | assumptions regarding the costs and expenses, including leasing commissions and tenant improvements, associated with leasing vacant space or releasing occupied space at a future date; |
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• | assumptions regarding future increases or decreases in expenses, or whether certain expenses are capital expenses or should be treated as expenses which are not recurring; and |
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• | various additional lease-up assumptions and other assumptions regarding the payment of rent not currently being paid. |
There is no assurance that the foregoing assumptions made with respect to any prospective multifamily or commercial mortgage loan will, in fact, be consistent with actual property performance. Accordingly, based on such subjective assumptions and analysis, there can be no assurance that the underwriting analysis of any particular Wachovia Mortgage Loan will conform to the foregoing descriptions in every respect or to any similar analysis which may be performed by other persons or entities.
DSC Ratios and LTV Ratios. Generally, the DSC Ratios for Wachovia Mortgage Loans will be equal to or greater than 1.20x; provided, however, exceptions may be made when consideration is given to circumstances particular to the Mortgage Loan, the related Mortgaged Property, LTV Ratio, reserves or other factors. For example, Wachovia may originate a Mortgage Loan with a DSC Ratio below 1.20x based on, among other things, the amortization features of the Mortgage Loan (for example, if the Mortgage Loan provides for relatively rapid amortization) the type of tenants and leases at the Mortgaged Property, the taking of additional collateral such as reserves, letters of credit and/or guarantees, Wachovia’s judgment of improved property and/or market performance in the future and/or other relevant factors.
Generally, the LTV Ratio for Wachovia Mortgage Loans will be equal to or less than 80%; provided, however, exceptions may be made when consideration is given to circumstances particular to the Mortgage Loan, the related Mortgaged Property, debt service coverage, reserves or other factors. For example, Wachovia may originate a Mortgage Loan with an LTV Ratio above 80% based on, among other things, the amortization features of the mortgage loan (for example, if the mortgage loan provides for relatively rapid amortization), the type of tenants and leases at the related Mortgaged Property, the taking of additional collateral such as reserves, letters of credit and/or guarantees, Wachovia’s judgment of improved property and/or performance in the future and/or other relevant factors.
While the foregoing discussion generally reflects how calculations of DSC Ratios and LTV Ratios are made, it does not necessarily reflect the specific calculations made to determine the DSC Ratio and the LTV Ratio disclosed in this prospectus supplement. For specific details on the calculations of the DSC Ratio and the LTV Ratio, see ‘‘DESCRIPTION OF THE MORTGAGE POOL—Additional Mortgage Loan Information’’ and ‘‘RISK FACTORS—The Mortgage Loans—Risks Related to Property Inspections and Certain Assumptions in Appraisals’’ in this prospectus supplement.
Additional Debt. When underwriting a multifamily or commercial mortgage loan, Wachovia will take into account whether the mortgaged property and/or direct or indirect interest in a related borrower are encumbered by additional debt and will analyze the likely effect of that additional debt on repayment of the subject mortgage loan. It is possible that Wachovia or an affiliate will be the lender on that additional debt, and may either sell such debt to an unaffiliated third party or hold it in inventory.
The DSC Ratios and LTV Ratios described above under ‘‘—DSC Ratios and LTV Ratios’’ may be significantly below 1.20x and significantly above 80%, respectively, when calculated taking into account
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the existence of additional debt secured by the related real property collateral or directly or indirectly by equity interests in the related borrower.
Assessments of Property Condition. As part of the underwriting process, Wachovia will analyze the condition of the real property collateral for a prospective multifamily or commercial mortgage loan. To aid in that analysis, Wachovia may, subject to certain exceptions, inspect or retain a third party to inspect the property and will in most cases obtain the property assessments and reports described below.
Appraisals. Wachovia will, in most cases, require that the real property collateral for a prospective multifamily or commercial mortgage loan be appraised by a state certified appraiser, an appraiser belonging to the Appraisal Institute, a membership association of professional real estate appraisers, or an otherwise qualified appraiser. In addition, Wachovia will generally require that those appraisals be conducted in accordance with the Uniform Standards of Professional Appraisal Practices developed by The Appraisal Foundation, a not-for-profit organization established by the appraisal profession. Furthermore, the appraisal report will usually include or be accompanied by a separate letter that includes a statement by the appraiser that the guidelines in Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 were followed in preparing the appraisal. In some cases, however, Wachovia may establish the value of the subject real property collateral based on a cash flow analysis, a recent sales price or another method or benchmark of valuation.
Environmental Assessment. Wachovia may require a Phase I environmental assessment with respect to the real property collateral for a prospective multifamily or commercial mortgage loan. However, when circumstances warrant, Wachovia may utilize an update of a prior environmental assessment, a transaction screen or a desktop review. Alternatively, Wachovia might forego an environmental assessment in limited circumstances, such as when it has obtained the benefits of an environmental insurance policy or an environmental guarantee. Furthermore, an environmental assessment conducted at any particular real property collateral will not necessarily cover all potential environmental issues. For example, an analysis for radon, lead-based paint and lead in drinking water will usually be conducted only at multifamily rental properties and only when Wachovia or the environmental consultant believes that special circumstances warrant such an analysis.
Depending on the findings of the initial environmental assessment, Wachovia may require additional record searches or environmental testing, such as a Phase II environmental assessment with respect to the real property collateral.
Engineering Assessment. In connection with the origination process, Wachovia may require that an engineering firm inspect the real property collateral for any prospective multifamily or commercial mortgage loan to assess the structure, exterior walls, roofing, interior structure and/or mechanical and electrical systems. Based on the resulting report, Wachovia will determine the appropriate response, if any, to any recommended repairs, corrections or replacements and any identified deferred maintenance.
Seismic Report. If the subject real property collateral consists of improvements located in California or in seismic zones 3 or 4, Wachovia may require a report to establish the probable maximum or bounded loss for the improvements at the property as a result of an earthquake. If that loss is in excess of 20% of the estimated replacement cost for the improvements at the property, Wachovia may require retrofitting of the improvements or that the borrower obtain earthquake insurance if available at a commercially reasonable price. It should be noted, however, that because the seismic assessments may not necessarily have used the same assumptions in assessing probable maximum loss, it is possible that some of the real properties that were considered unlikely to experience a probable maximum loss in excess of 20% of estimated replacement cost might have been the subject of a higher estimate had different assumptions been used.
Zoning and Building Code Compliance. In connection with the origination of a multifamily or commercial mortgage loan, Wachovia will generally consider whether the use and occupancy of the related real property collateral is in material compliance with zoning, land-use, building rules, regulations and orders then applicable to that property. Evidence of this compliance may be in the form of one or more of the following: legal opinions; surveys; recorded documents; temporary or permanent certificates of occupancy; letters from government officials or agencies; title insurance endorsements; engineering or consulting reports; and/or representations by the related borrower.
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Where a property as currently operated is a permitted nonconforming use and/or structure and the improvements may not be rebuilt to the same dimensions or used in the same manner in the event of a major casualty, Wachovia will consider whether—
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• | any major casualty that would prevent rebuilding has a sufficiently remote likelihood of occurring; |
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• | casualty insurance proceeds together with the value of any additional collateral would be available in an amount estimated by Wachovia to be sufficient to pay off the related mortgage loan in full; |
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• | the real property collateral, if permitted to be repaired or restored in conformity with current law, would in Wachovia’s judgment constitute adequate security for the related mortgage loan; |
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• | a variance or other similar change in applicable zoning restrictions is potentially available, or whether the applicable governing entity is likely to enforce the related limitations; and/or |
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• | to require the related borrower to obtain law and ordinance insurance. |
While the foregoing discussion generally reflects how calculations of DSC Ratios are made, it does not necessarily reflect the specific calculations made to determine the DSC Ratio disclosed in this prospectus supplement. For specific details on the calculations of DSC Ratio in this prospectus supplement, see ‘‘DESCRIPTION OF THE MORTGAGE POOL—Additional Mortgage Loan Information’’ in this prospectus supplement.
Escrow Requirements. Generally, Wachovia requires most borrowers to fund various escrows for taxes and insurance, capital expenses and replacement reserves. Generally, the required escrows for mortgage loans originated by Wachovia are as follows:
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• | Taxes—Typically an initial deposit and monthly escrow deposits equal to 1/12th of the annual property taxes (based on the most recent property assessment and the current millage rate) are required to provide Wachovia with sufficient funds to satisfy all taxes and assessments. Wachovia may waive this escrow requirement under certain circumstances. |
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• | Insurance—If the property is insured under an individual policy (i.e., the property is not covered by a blanket policy), typically an initial deposit and monthly escrow deposits equal to 1/12th of the annual property insurance premium are required to provide Wachovia with sufficient funds to pay all insurance premiums. Wachovia may waive this escrow requirement under certain circumstances. |
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• | Replacement Reserves—Replacement reserves are generally calculated in accordance with the expected useful life of the components of the property during the term of the mortgage loan. Wachovia may waive this escrow requirement under certain circumstances. |
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• | Completion Repair/Environmental Remediation—Typically, a completion repair or remediation reserve is required where an environmental or engineering report suggests that such reserve is necessary. Upon funding of the applicable Mortgage Loan, Wachovia generally requires that at least 110% of the estimated costs of repairs or replacements be reserved and generally requires that repairs or replacements be completed within a year after the funding of the applicable Mortgage Loan. Wachovia may waive this escrow requirement under certain circumstances. |
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• | Tenant Improvement/Lease Commissions—In most cases, various tenants have lease expirations within the Wachovia Mortgage Loan term. To mitigate this risk, special reserves may be required to be funded either at closing of the Wachovia Mortgage Loan and/or during the related Mortgage Loan term to cover certain anticipated leasing commissions or tenant improvement costs which might be associated with re-leasing the space occupied by such tenants. |
Furthermore, Wachovia may accept an alternative to a cash escrow or reserve from a borrower, such as a letter of credit or a guarantee from the borrower or an affiliate of the borrower or periodic evidence that the items for which the escrow or reserve would have been established are being paid or addressed. In some cases, Wachovia may determine that establishing an escrow or reserve is not warranted given the
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amounts that would be involved and Wachovia’s evaluation of the ability of the Mortgaged Property, the borrower or a holder of direct or indirect ownership interests in the borrower to bear the subject expense or cost absent creation of an escrow or reserve.
Artesia Mortgage Capital Corporation
General Character of Artesia Mortgage Capital Corporation’s Business. Artesia Mortgage Capital Corporation (‘‘Artesia’’) is a Delaware Corporation, with its principal offices in Issaquah, Washington. Artesia is a Sponsor of this securitization and originated and underwrote 68 Mortgage Loans included in the Trust Fund. Artesia is a wholly owned non-bank U.S. subsidiary of Dexia Bank. Dexia Bank, which is rated ‘‘AA+’’ by Fitch, ‘‘AA’’ by S&P and ‘‘Aa2’’ by Moody’s, is part of Dexia Group, a diversified financial services firm located in Brussels, Belgium with a balance sheet of 509 billion Euros ($603 billion) and a stock market capitalization of approximately 22 billion Euros ($26 billion) as of December 2005.
Artesia originates commercial and multifamily mortgage loans for the purpose of securitizing them in CMBS transactions.
Artesia also engages in the origination, and/or buying and selling, of mortgages and other interests in mortgage loans for investment purposes.
Artesia’s Securitization Program. Artesia, directly or through correspondents, originates multifamily and commercial mortgage loans throughout the United States. Artesia has been engaged in the origination of multifamily and commercial mortgage loans for securitization since 1996. The multifamily and commercial mortgage loans originated and securitized by Artesia include both fixed-rate loans and floating-rate loans and both conduit balance loans—which are average-sized loans by industry standards —and large balance loans. Most of the multifamily and commercial mortgage loans included in commercial mortgage securitizations by Artesia have been originated, directly or through correspondents, by Artesia. During the fiscal years 2001 through 2006, the aggregate annual principal balance of commercial mortgage loans securitized by Artesia ranged from approximately $412.6 million in 2001, to approximately $610.1 million in 2003, to approximately $1.5 billion in 2005, and to approximately $2.0 billion in 2006.
When originating mortgage loans in conjunction with third-party correspondents, Artesia performs the underwriting based on its underwriting criteria (see ‘‘—Artesia’s Underwriting Standards’’ below) and originates the subject mortgage loan on a specified closing date prior to inclusion in the subject securitization.
In addition, in the normal course of its securitization program, Artesia may also acquire multifamily and commercial mortgage loans from various third party originators. These mortgage loans may have been originated using underwriting guidelines not established by Artesia.
In connection with the commercial mortgage securitization transactions it is involved in, Artesia generally transfers the subject mortgage assets to a depositor, who then transfers those mortgage assets to the issuing entity for the related securitization. In return for the transfer of the subject mortgage assets by the depositor to the issuing entity, the issuing entity issues commercial mortgage pass-through certificates backed by, and supported by the cash flows generated by, those mortgage assets.
Artesia also works, with respect to the mortgage loans it has originated, with rating agencies, unaffiliated sponsors, originators and servicers in putting together the securitization transaction. Artesia will generally act as a sponsor or originator in the commercial mortgage securitization transactions to which it contributes mortgage loans. Artesia does not act as servicer of the multifamily and commercial mortgage loans in the commercial mortgage securitizations it is involved in. Instead, Artesia and/or the related depositor contract with other entities to service the multifamily and commercial mortgage loans following their transfer into a trust fund for a series of securities.
Artesia may be obligated, specifically with respect to the mortgage loans that it is contributing, generally pursuant to a mortgage loan purchase agreement or other comparable agreement, to:
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• | deliver various specified loan documents; |
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• | file and/or record various specified loan documents and assignments of those documents; and |
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• | make various loan-specific representations and warranties. |
If it is later determined that any mortgage asset contributed by Artesia fails to conform to the specified representations and warranties or there is a defect in or an omission with respect to certain specified mortgage loan documents related to that mortgage asset, which breach, defect or omission, as the case may be, is determined to have a material adverse effect on the value of the subject mortgage asset and/or the interests of holders of securities issued in connection with the subject commercial mortgage securitization transaction, then Artesia will generally have an obligation to cure the subject defect, omission or breach or to repurchase or replace the subject mortgage asset.
Artesia’s Underwriting Standards
General. Set forth below is a discussion of certain general underwriting guidelines of Artesia with respect to multifamily and commercial mortgage loans originated by Artesia. The underwriting guidelines described below may not—and generally will not—apply to multifamily and commercial mortgage loans acquired by Artesia from third-party originators.
Notwithstanding the discussion below, given the unique nature of income-producing real properties, the underwriting and origination procedures and the credit analysis with respect to any particular multifamily or commercial mortgage loan may differ significantly from one asset to another, and will be driven by circumstances particular to that property, including, among others, its type, current use, physical quality, size, environmental condition, location, market conditions, capital reserve requirements and additional collateral, tenants and leases, borrower identity, borrower sponsorship and/or performance history. Consequently, there can be no assurance that the underwriting of any particular multifamily or commercial mortgage loan will conform to the general guidelines described in this ‘‘—Artesia’s Underwriting Standards’’ section.
Loan Analysis. Artesia performs both a credit analysis and a collateral analysis with respect to each multifamily and commercial mortgage loan it originates. The credit analysis of the borrower may include a review of third-party credit reports, reports resulting from judgment, lien, bankruptcy and pending litigation searches and, if applicable, the loan payment history of the borrower and its principals. Generally, borrowers are required to be single-purpose entities, although exceptions may be made from time to time on a case-by-case basis. The collateral analysis includes an analysis, in each case to the extent available, of historical property operating statements, rent rolls and a projection of future performance and a review of tenant leases. Depending on the type of real property involved and other relevant circumstances, Artesia’s underwriting staff, third party reviewers, and/or legal counsel will review leases of significant tenants. Artesia may also perform a limited qualitative review with respect to certain tenants located at the subject property, particularly significant tenants, credit tenants and sole tenants. Artesia generally requires third-party appraisals, as well as environmental reports, building condition reports and, if applicable, seismic reports. Each report is reviewed for acceptability by an Artesia staff member or a third-party reviewer. The results of these reviews are incorporated into the underwriting report.
Loan Approval. Prior to commitment, all multifamily and commercial mortgage loans to be originated by Artesia must be approved by one or more—depending on loan size—specified credit committees of Artesia or Dexia Bank. The credit committee(s) responsible for loan approval may approve a mortgage loan as recommended, request additional due diligence, modify the loan terms or decline a loan transaction.
Debt Service Coverage Ratio. The repayment of a multifamily or commercial mortgage loan is typically dependent upon the successful operation of the related mortgaged property and the ability of that property to generate income sufficient to make payments on the loan. Accordingly, in connection with the origination of any multifamily or commercial mortgage loan, Artesia will analyze whether cash flow expected to be derived from the subject mortgaged property will be sufficient to make the required payments under that mortgage loan, taking into account, among other things, revenues and expenses for, and other debt currently secured by, or that in the future may be secured by, the subject mortgaged property as well as debt secured by pledges of the ownership interests in the related borrower.
The debt service coverage ratio of a multifamily or commercial mortgage loan is an important measure of the likelihood of default on the loan. In general, the debt service coverage ratio of a multifamily or commercial mortgage loan at any given time is the ratio of—
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• | the amount of income, net of operating expenses, capital expenditures and other amounts required to be reserved for various purposes, derived or expected to be derived from the related mortgaged property for a given period that is available to pay debt service on the subject mortgage loan, to |
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• | the scheduled payments of principal and/or interest during that given period on the subject mortgage loan and any other loans that are secured by liens of senior or equal priority on the related mortgaged property. |
However, the amount described in the first bullet of the preceding sentence is often a highly subjective number based on variety of assumptions regarding, and adjustments to, revenues and expenses with respect to the related mortgaged property.
For example, when calculating the debt service coverage ratio for a multifamily or commercial mortgage loan, Artesia may utilize annual net cash flow that was calculated based on assumptions regarding projected rental income, expenses and/or occupancy, including, without limitation, one or more of the following:
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• | the assumption that a particular tenant at the subject mortgaged property that has executed a lease, but has not yet taken occupancy and/or has not yet commenced paying rent, will take occupancy and commence paying rent on a future date; |
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• | the assumption that an unexecuted lease that is currently being negotiated with respect to a particular tenant at the subject mortgaged property or is out for signature will be executed and in place on a future date; |
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• | the assumption that a portion of currently vacant and unleased space at the subject mortgaged property will be leased at current market rates and consistent with occupancy rates of comparable properties in the subject market; |
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• | the assumption that certain rental income that is to be payable commencing on a future date under a signed lease, but where the subject tenant is in an initial rent abatement or free rent period or has not yet taken occupancy, will be paid commencing on such future date; |
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• | assumptions regarding the probability of renewal of particular leases and/or the re-leasing of certain space at the subject mortgaged property and the anticipated effect on capital and re-leasing expenditures; and |
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• | various additional lease-up assumptions and other assumptions regarding the payment of rent not currently being paid. |
There is no assurance that the foregoing assumptions made with respect to any prospective multifamily or commercial mortgage loan will, in fact, be consistent with actual property performance.
Generally, the debt service coverage ratio for multifamily and commercial mortgage loans originated by Artesia, calculated as described above, will be equal to or greater than 1.20x (subject to the discussion under ‘‘—Additional Debt’’ below); however, exceptions may be made when consideration is given to circumstances particular to the mortgage loan or the related mortgaged property. For example, Artesia may originate a multifamily or commercial mortgage loan with a debt service coverage ratio below 1.20x based on, among other things, the amortization features of the mortgage loan (for example, if the mortgage loan provides for relatively rapid amortization), the type of tenants and leases at the subject mortgaged property, the taking of additional collateral such as reserves, letters of credit and/or guarantees, Artesia’s judgment of improved property performance in the future and/or other relevant factors.
While the foregoing discussion generally reflects how calculations of debt service ratios are made, it does not necessarily reflect the specific calculations made to determine the DSC Ratios disclosed in this prospectus supplement. For specific information regarding the details on the calculations of DSC Ratios in this prospectus supplement, see ‘‘DESCRIPTION OF THE MORTGAGE POOL—Additional Mortgage Loan Information’’.
Loan-to-Value Ratio. Artesia also looks at the loan-to-value ratio of a prospective multifamily or commercial mortgage loan as one of the factors it takes into consideration in evaluating the likelihood of
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recovery if a property is liquidated following a default. In general, the loan-to-value ratio of a multifamily or commercial mortgage loan at any given time is the ratio, expressed as a percentage, of—
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• | the then outstanding principal balance of the subject mortgage loan and any other loans that are secured by liens of senior or equal priority on the related mortgaged property, to |
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• | the estimated value of the related mortgaged property based on an appraisal, a cash flow analysis, a recent sales price or another method or benchmark of valuation. |
Generally, the loan-to-value ratio for multifamily and commercial mortgage loans originated by Artesia, calculated as described above, will be equal to or less than 80% (subject to the discussion under ‘‘—Additional Debt’’ below); however, exceptions may be made when consideration is given to circumstances particular to the mortgage loan or the related mortgaged property. For example, Artesia may originate a multifamily or commercial mortgage loan with a loan-to-value ratio above 80% based on, among other things, the amortization features of the mortgage loan (for example, if the mortgage loan provides for relatively rapid amortization), the type of tenants and leases at the subject mortgaged property, the taking of additional collateral such as reserves, letters of credit and/or guarantees, Artesia’s judgment of improved property performance in the future and/or other relevant factors.
Additional Debt. When underwriting a multifamily or commercial mortgage loan, Artesia will take into account whether the subject real property and/or direct or indirect interest in a related borrower are encumbered by additional debt and will analyze the likely effect of that additional debt on repayment of the subject mortgage loan. It is possible that Artesia will be the lender on that additional debt.
The debt service coverage ratios described above under ‘‘—Debt Service Coverage Ratio’’ and the loan-to-value ratios described above under ‘‘—Loan-to-Value Ratio’’ may be below 1.20x and above 80%, respectively, based on the existence of additional debt secured by the related mortgaged property or directly or indirectly by equity interests in the related borrower.
Assessments of Property Condition. As part of the underwriting process, Artesia will analyze the condition of the real property for a prospective multifamily or commercial mortgage loan. To aid in that analysis, Artesia may, subject to certain exceptions, inspect or retain a third party to inspect the property and will obtain the property assessments and reports described below.
Appraisals. Artesia will, in most cases, require that the real property for a prospective multifamily or commercial mortgage loan be appraised by a state certified appraiser or an appraiser belonging to the Appraisal Institute, a membership association of professional real estate appraisers. In addition, Artesia will generally require that those appraisals be conducted in accordance with the Uniform Standards of Professional Appraisal Practices developed by The Appraisal Foundation, a not-for-profit organization established by the appraisal profession. Furthermore, the appraisal report will usually include or be accompanied by a separate letter that includes a statement by the appraiser that the guidelines in Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 were followed in preparing the appraisal. In some cases, however, Artesia may establish the value of the subject real property based on a cash flow analysis, a recent sales price or another method or benchmark of valuation.
Environmental Assessment. Artesia may require a Phase I environmental assessment with respect to the real property for a prospective multifamily or commercial mortgage loan. However, when circumstances warrant, Artesia may utilize an update of a prior environmental assessment, a transaction screen or a desktop review. Alternatively, Artesia might forego an environmental assessment in limited circumstances, such as when it has obtained the benefits of an environmental insurance policy or an environmental guarantee. Furthermore, an environmental assessment conducted at any particular real property will not necessarily cover all potential environmental issues. For example, an analysis for radon, lead-based paint and lead in drinking water will usually be conducted only at multifamily rental properties and only when Artesia or the environmental consultant believes that such an analysis is warranted under the circumstances.
Depending on the findings of the initial environmental assessment, Artesia may require additional record searches or environmental testing, such as a Phase II environmental assessment with respect to the subject real property.
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Engineering Assessment. In connection with the origination process, Artesia may require that an engineering firm inspect the real property for any prospective multifamily or commercial mortgage loan to assess the structure, exterior walls, roofing, interior structure and/or mechanical and electrical systems. Based on the resulting report, Artesia will determine the appropriate response to any recommended repairs, corrections or replacements and any identified deferred maintenance.
Seismic Report. If the subject real property includes any material improvements and is located in California or in seismic zones 3 or 4, Artesia may require a report to establish the probable maximum or bounded loss for the improvements at the property as a result of an earthquake. If that loss is in excess of 20% of the estimated replacement cost for the improvements at the property, Artesia may require retrofitting of the improvements or that the borrower obtain earthquake insurance if available at a commercially reasonable price. It should be noted, however, that because the seismic assessments may not necessarily have used the same assumptions in assessing probable maximum loss, it is possible that some of the real properties that were considered unlikely to experience a probable maximum loss in excess of 20% of estimated replacement cost might have been the subject of a higher estimate had different assumptions been used.
Zoning and Building Code Compliance. In connection with the origination of a multifamily or commercial mortgage loan, Artesia will generally examine whether the use and occupancy of the related real property is in material compliance with zoning, land-use, building rules, regulations and orders then applicable to that property. Evidence of this compliance may be in the form of one or more of the following: legal opinions; surveys; recorded documents; temporary or permanent certificates of occupancy; letters from government officials or agencies; title insurance endorsements; engineering or consulting reports; and/or representations by the related borrower.
Where a property as currently operated is a permitted nonconforming use and/or structure and the improvements may not be rebuilt to the same dimensions or used in the same manner in the event of a major casualty, Artesia will analyze whether—
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• | any major casualty that would prevent rebuilding has a sufficiently remote likelihood of occurring; |
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• | casualty insurance proceeds together with the value of any additional collateral would be available in an amount estimated by Artesia to be sufficient to pay off the related mortgage loan in full; |
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• | the real property, if permitted to be repaired or restored in conformity with current law, would in Artesia’s judgment constitute adequate security for the related mortgage loan; and/or |
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• | to require the related borrower to obtain law and ordinance insurance. |
Escrow Requirements. Based on its analysis of the subject real property, the borrower and the principals of the borrower, Artesia may require a borrower under a multifamily or commercial mortgage loan to fund various escrows for taxes and/or insurance, capital expenses, replacement reserves, tenant improvements, leasing commissions, debt service and/or environmental remediation. Artesia conducts a case-by-case analysis to determine the need for a particular escrow or reserve. Consequently, the aforementioned escrows and reserves are not established for every multifamily and commercial mortgage loan originated by Artesia. Furthermore, Artesia may accept an alternative to a cash escrow or reserve from a borrower, such as a letter of credit or a guarantee from the borrower or an affiliate of the borrower or periodic evidence that the items for which the escrow or reserve would have been established are being paid or addressed.
Notwithstanding the foregoing discussion under this ‘‘—Artesia’s Underwriting Standards’’ section, Artesia may include mortgage loans in a trust fund which vary from, or do not comply with, Artesia’s underwriting guidelines. In addition, in some cases, Artesia may not have strictly applied these underwriting guidelines as the result of a case-by-case permitted exception based upon other compensating factors.
Certain Relationships
The Mortgage Loans that will be sold to the Depositor by Artesia Mortgage Capital Corporation were previously the subject of a custodial arrangement between Artesia and Wells Fargo Bank, N.A. in
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which Wells Fargo Bank, N.A. acted as a document custodian for Artesia. The terms of the custodial arrangement are customary for agreements in the commercial mortgage securitization industry providing for the delivery, receipt, review and safekeeping of mortgage loan files.
Wachovia Bank, National Association is currently servicing all but 1 of the Mortgage Loans that will be sold to the Depositor by Artesia pursuant to an interim servicing arrangement between Artesia and Wachovia. The terms of the interim servicing agreement are customary for agreements in the commercial mortgage securitization industry providing for the servicing of mortgage loans.
The Depositor
Wachovia Commercial Mortgage Securities, Inc., a North Carolina corporation, is the Depositor. The Depositor is a wholly-owned subsidiary of Wachovia Bank, National Association, a national banking association, which is a wholly-owned subsidiary of Wachovia Corporation, a North Carolina corporation. The Depositor purchases commercial mortgage loans and interests in commercial mortgage loans for the purpose of selling such commercial mortgage loans and interests to trusts created in connection with the securitization of pools of assets and does not engage in any activities unrelated thereto.
The Depositor remains responsible under the Pooling and Servicing Agreement for providing the Master Servicer, Special Servicer and Trustee with certain information and other assistance requested by those parties and reasonably necessary to performing their duties under the Pooling and Servicing Agreement. The Depositor also remains responsible for mailing notices to the Certificateholders upon the appointment of certain successor entities under the Pooling and Servicing Agreement.
Significant Obligors
The Peter Cooper Village & Stuyvesant Town Loan represents 19.0% of the Cut-Off Date Pool Balance (65.5% of the Cut-Off Date Group 2 Balance) and is a ‘‘significant obligor’’ with respect to this offering. The borrowers under the Peter Cooper Village & Stuyvesant Town mortgage loan are PCV ST Owner LP and ST Owner LP. See ‘‘DESCRIPTION OF THE MORTGAGE POOL—Significant Obligors’’, ‘‘—Twenty Largest Mortgage Loans’’ and Annex D in this prospectus supplement.
The Mortgage Loan Sellers
The Depositor will acquire the Mortgage Loans from the Mortgage Loan Sellers on or prior to the Closing Date pursuant to separate mortgage loan purchase agreements (each, a ‘‘Mortgage Loan Purchase Agreement’’ and together, the ‘‘Mortgage Loan Purchase Agreements’’). The Mortgage Loan Sellers originated or acquired the Mortgage Loans as described above under ‘‘—Mortgage Loan History’’.
One hundred ninety-five (195) of the Mortgage Loans (the ‘‘Wachovia Mortgage Loans’’), representing 88.7% of the Cut-Off Date Pool Balance (156 Mortgage Loans in Loan Group 1 or 86.4% of the Cut-Off Date Group 1 Balance and 39 Mortgage Loans in Loan Group 2 or 94.4% of the Cut-Off Date Group 2 Balance), were originated by Wachovia, 1 of which Mortgage Loans was co-underwritten and co-originated with Column and Morgan Stanley Mortgage Capital Inc (in which Wachovia retained a 40% interest).
Sixty-eight (68) of the Mortgage Loans (the ‘‘Artesia Mortgage Loans’’), representing 9.5% of the Cut-Off Date Pool Balance (56 Mortgage Loans in Loan Group 1 or 11.2% of the Cut-Off Date Group 1 Balance and 12 Mortgage Loans in Loan Group 2 or 5.6% of the Cut-Off Date Group 2 Balance), were originated by Artesia.
One (1) of the Mortgage Loans (the ‘‘Column Mortgage Loan’’), representing 1.7% of the Cut-Off Date Pool Balance (2.4% of the Cut-Off Date Group 1 Balance), was co-underwritten and co-originated by Column, Wachovia and Morgan Stanley Mortgage Capital Inc (in which Column retained a 30% interest).
Wachovia has no obligation to repurchase or substitute any of the Artesia Mortgage Loans or the Column Mortgage Loan. Artesia has no obligation to repurchase or substitute any of the Wachovia Mortgage Loans or the Column Mortgage Loan. Column has no obligation to repurchase or substitute any of the Wachovia Mortgage Loans or the Artesia Mortgage Loans.
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All information concerning the Wachovia Mortgage Loans contained in or used in the preparation of this prospectus supplement is as underwritten by Wachovia. All information concerning the Artesia Mortgage Loans contained in or used in the preparation of this prospectus supplement is as underwritten by Artesia.
Originators
Each of the Mortgage Loan Sellers are originators with respect to this offering. Morgan Stanley Mortgage Capital Inc. co-originated a portion of the 485 Lexington Loan. UBS Real Estate Investments Inc. co-originated a portion of the State Street Financial Center Loan. GIT Trading Corp. is the originator of 1 mortgage loan (loan number 147), representing 0.1% of the Cut-Off Date Pool Balance (0.1% of the Cut-Off Date Group 1 Balance).
Assignment of the Mortgage Loans; Repurchases and Substitutions
On the Closing Date, the Depositor will acquire the Mortgage Loans from each Mortgage Loan Seller and will simultaneously transfer the Mortgage Loans, without recourse, to the Trustee for the benefit of the Certificateholders.
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In connection with the above-described transfers, the Depositor will require each Mortgage Loan Seller to deliver to the Trustee or to a document custodian appointed by the Trustee (a ‘‘Custodian’’), among other things, the following documents with respect to each Mortgage Loan originated by the applicable Mortgage Loan Seller (the ‘‘Mortgage File’’): (i) the original Mortgage Note, endorsed on its face or by allonge attached thereto, without recourse, to the order of the Trustee or in blank (or, if the original Mortgage Note has been lost, an affidavit to such effect from the applicable Mortgage Loan Seller or another prior holder, together with a copy of the Mortgage Note); (ii) the original or a copy of the Mortgage, together with an original or copy of any intervening assignments of the Mortgage, in each case (unless not yet returned by the applicable recording office) with evidence of recording indicated thereon or certified by the applicable recorder’s office; (iii) the original or a copy of any related assignment of leases and of any intervening assignments thereof (if such item is a document separate from the Mortgage), in each case (unless not yet returned by the applicable recording office) with evidence of recording indicated thereon or certified by the applicable recorder’s office; (iv) an original assignment of the Mortgage in favor of the Trustee or in blank and (subject to the completion of certain missing
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recording information) in recordable form; (v) an original assignment of any related assignment of leases (if such item is a document separate from the Mortgage) in favor of the Trustee or in blank and (subject to the completion of certain missing recording information) in recordable form; (vi) the original assignment of all unrecorded documents relating to the Mortgage Loan, if not already assigned pursuant to items (iv) or (v) above; (vii) originals or copies of all modification, consolidation, assumption and substitution agreements in those instances in which the terms or provisions of the Mortgage or Mortgage Note have been modified or the Mortgage Loan has been assumed or consolidated; (viii) the original or a copy of the policy or certificate of lender’s title insurance issued on the date of the origination of such Mortgage Loan, or, if such policy has not been issued or located, an irrevocable, binding commitment (which may be a marked version of the policy that has been executed by an authorized representative of the title company or an agreement to provide the same pursuant to binding escrow instructions executed by an authorized representative of the title company or a ‘‘pro forma’’ title policy) to issue such title insurance policy; (ix) any filed copies (bearing evidence of filing) or other evidence of filing satisfactory to the Trustee of any UCC financing statements, related amendments and continuation statements in the possession of the applicable Mortgage Loan Seller; (x) an original assignment in favor of the Trustee of any financing statement executed and filed in favor of the applicable Mortgage Loan Seller in the relevant jurisdiction; (xi) the original or copy of any ground lease, memorandum of ground lease, ground lessor estoppel, environmental insurance policy, indemnity or guaranty relating to such Mortgage Loan; (xii) any intercreditor agreement relating to permitted debt (including mezzanine debt) of the mortgagor; (xiii) copies of any loan agreement, escrow agreement, or security agreement relating to such Mortgage Loan; (xiv) copies of franchise agreements and franchisor comfort letters, if any, for hospitality properties and any applicable transfer or assignment documents; and (xv) a copy of any letter of credit and related transfer documents related to such Mortgage Loan. Notwithstanding the foregoing, with respect to the State Street Financial Center Loan, the LB-UBS 2007-C1 Trustee will hold the original documents related to the State Street Financial Center Loan for the benefit of the LB-UBS 2007-C1 Trust Fund and the Trust Fund, other than the related Mortgage Note which will be held by the Trustee under the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement, the Trustee or a Custodian on its behalf is required to review each Mortgage File within a specified period following its receipt thereof. If any of the documents described in the preceding paragraph is found during the course of such review to be missing from any Mortgage File or defective, and in either case such omission or defect materially and adversely affects the value of the applicable Mortgage Loan, the interest of the Trust Fund or the interests of any Certificateholder, the applicable Mortgage Loan Seller, if it does not deliver the document or cure the defect (other than omissions solely due to a document not having been returned by the related recording office) within a period of 90 days following such Mortgage Loan Seller’s receipt of notice thereof, will be obligated pursuant to the applicable Mortgage Loan Purchase Agreement (the relevant rights under which will be assigned by the Depositor to the Trustee) to (1) repurchase the affected Mortgage Loan within such 90-day period at a price (the ‘‘Purchase Price’’) generally equal to the sum of (i) the unpaid principal balance of such Mortgage Loan, (ii) the unpaid accrued interest on such Mortgage Loan (calculated at the applicable Mortgage Rate) to but not including the Due Date in the Collection Period in which the purchase is to occur and (iii) certain Additional Trust Fund Expenses in respect of such Mortgage Loan, including but not limited to, servicing expenses that are reimbursable to the Master Servicer, the Special Servicer or the Trustee plus any interest thereon and on any related P&I Advances or (2) other than with respect to the Peter Cooper Village & Stuyvesant Town Loan, the Five Times Square Loan, the State Street Financial Center Loan and the 485 Lexington Avenue Loan, substitute a Qualified Substitute Mortgage Loan for such Mortgage Loan and pay the Master Servicer for deposit into the Certificate Account a shortfall amount equal to the difference between the Purchase Price of the deleted Mortgage Loan calculated as of the date of substitution and the Stated Principal Balance of such Qualified Substitute Mortgage Loan as of the date of substitution (the ‘‘Substitution Shortfall Amount’’); provided that unless the breach would cause the Mortgage Loan not to be a qualified mortgage within the meaning of Section 860G(a)(3) of the Internal Revenue Code of 1986, as amended (the ‘‘Code’’), the applicable Mortgage Loan Seller will generally have an additional 90-day period to deliver the document or cure the defect, as the case may be, if it is diligently proceeding to effect such delivery or cure and provided, further, no such document omission or defect (other than with respect to the Mortgage Note,
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the Mortgage, the title insurance policy, the ground lease, any letter of credit, any franchise agreement, comfort letter and comfort letter transfer document (the ‘‘Core Material Documents’’)) will be considered to materially and adversely affect the interests of the Certificateholders in, or the value of, the affected Mortgage Loans unless the document with respect to which the document omission or defect exists is required in connection with an imminent enforcement of the mortgagee’s rights or remedies under the related Mortgage Loan, defending any claim asserted by any borrower or third-party with respect to the Mortgage Loan, establishing the validity or priority of any lien or any collateral securing the Mortgage Loan or for any immediate significant servicing obligation. With respect to material document defects other than those involving the Core Material Documents, any applicable cure period may be extended if the document involved is not needed imminently. Such extension will end upon 30 days notice of such need as reasonably determined by the Master Servicer or Special Servicer (with a possible 30 day extension if the Master Servicer or Special Servicer agrees that the applicable Mortgage Loan Seller is diligently pursuing a cure). All material document defects regardless of the document involved will be cured no later than 2 years after the Closing Date; provided, however, the initial 90-day cure period described herein will not be reduced.
The foregoing repurchase or substitution obligation constitutes the sole remedy available to the Certificateholders and the Trustee for any uncured failure to deliver, or any uncured defect in, a constituent Mortgage Loan document. Each Mortgage Loan Seller is solely responsible for its repurchase or substitution obligation, and such obligations will not be the responsibility of the Depositor.
The Pooling and Servicing Agreement requires the Trustee promptly to cause each of the assignments described in clauses (iv), (v) and (x) of the third preceding paragraph to be submitted for recording or filing, as applicable, in the appropriate public records. See ‘‘DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS—Assignment of Mortgage Assets; Repurchases’’ in the accompanying prospectus. The Pooling and Servicing Agreement requires that the Trustee take the actions necessary to maintain the security interest of the Trust Fund in the Mortgage Loans.
Wells Fargo Bank is acting as custodian of the Mortgage Files pursuant to the Pooling and Servicing Agreement. In that capacity, Wells Fargo Bank is responsible for holding and safeguarding the Mortgage Notes and other contents of the Mortgage Files on behalf of the Trustee and the Certificateholders. Wells Fargo Bank maintains each Mortgage File in a separate file folder marked with a unique bar code to assure loan level file integrity and to assist in inventory management. Files are segregated by transaction and/or issuer. Wells Fargo Bank has been engaged in the mortgage document custody business for more than 25 years. Wells Fargo Bank maintains its commercial document custody facilities in Minneapolis, Minnesota. As of December 31, 2006, Wells Fargo Bank was acting as custodian of more than 45,000 commercial mortgage loan files.
A ‘‘Qualified Substitute Mortgage Loan’’ is a mortgage loan which must, on the date of substitution: (i) have an outstanding Stated Principal Balance, after application of all scheduled payments of principal and interest due during or prior to the month of substitution, not in excess of the Stated Principal Balance of the deleted Mortgage Loan as of the Due Date in the calendar month during which the substitution occurs; (ii) have a Mortgage Rate not less than the Mortgage Rate of the deleted Mortgage Loan; (iii) have the same Due Date as the deleted Mortgage Loan; (iv) accrue interest on the same basis as the deleted Mortgage Loan (for example, on the basis of a 360-day year consisting of twelve 30-day months); (v) have a remaining term to stated maturity not greater than, and not more than two years less than, the remaining term to stated maturity of the deleted Mortgage Loan; (vi) have an original loan-to-value ratio not higher than that of the deleted Mortgage Loan and a current loan-to-value ratio not higher than the then current loan-to-value ratio of the deleted Mortgage Loan; (vii) comply as of the date of substitution with all of the representations and warranties set forth in the applicable Mortgage Loan Purchase Agreement; (viii) have an environmental report with respect to the related Mortgaged Property which will be delivered as a part of the related servicing file; (ix) have an original debt service coverage ratio not less than the original debt service coverage ratio of the deleted Mortgage Loan; (x) be determined by an opinion of counsel to be a ‘‘qualified replacement mortgage’’ within the meaning of Section 860G(a)(4) of the Code; (xi) not have a maturity date after the date two years prior to the Rated Final Distribution Date; (xii) not be substituted for a deleted Mortgage Loan unless the Trustee has received prior confirmation in writing by each Rating Agency that such substitution will not result in the withdrawal,
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downgrade or qualification of the rating assigned by the Rating Agency to any Class of Certificates then rated by the Rating Agency (the cost, if any, of obtaining such confirmation to be paid by the applicable Mortgage Loan Seller); (xiii) have a date of origination that is not more than 12 months prior to the date of substitution; (xiv) have been approved by the Controlling Class Representative (or, if there is no Controlling Class Representative then serving, by the holders of Certificates representing a majority of the voting rights allocated to the Controlling Class); (xv) not be substituted for a deleted Mortgage Loan if it would result in the termination of the REMIC status of either of the REMICs or the imposition of tax on either of the REMICs other than a tax on income expressly permitted or contemplated to be received by the terms of the Pooling and Servicing Agreement; and (xvi) become a part of the same Loan Group as the deleted Mortgage Loan. In the event that one or more mortgage loans are substituted for one or more deleted Mortgage Loans, then the amounts described in clause (i) shall be determined on the basis of aggregate principal balances and the rates described in clause (ii) above and the remaining term to stated maturity referred to in clause (v) above shall be determined on a weighted average basis; provided that no individual Mortgage Loan shall have a Mortgage Rate, net of the related Administrative Cost Rate, that is less than the highest Pass-Through Rate of any Class of Sequential Pay Certificates then outstanding bearing a fixed rate. When a Qualified Substitute Mortgage Loan is substituted for a deleted Mortgage Loan, the applicable Mortgage Loan Seller will be required to certify that such Mortgage Loan meets all of the requirements of the above definition and shall send such certification to the Trustee. Notwithstanding the foregoing, no substitutions will be permitted for the Peter Cooper Village & Stuyvesant Town Loan, the Five Times Square Loan, the State Street Financial Center Loan or the 485 Lexington Avenue Loan.
Representations and Warranties; Repurchases and Substitutions
In each Mortgage Loan Purchase Agreement, the applicable Mortgage Loan Seller has represented and warranted with respect to each Mortgage Loan (subject to certain exceptions specified in each Mortgage Loan Purchase Agreement), as of the Closing Date, or as of such other date specifically provided in the representation and warranty, among other things, generally that:
(i) the information set forth in the schedule of Mortgage Loans attached to the applicable Mortgage Loan Purchase Agreement (which contains certain of the information set forth in Annex A-1 to this prospectus supplement) was true and correct in all material respects as of the Cut-Off Date;
(ii) as of the date of its origination, such Mortgage Loan complied in all material respects with, or was exempt from, all requirements of federal, state or local law relating to the origination of such Mortgage Loan;
(iii) immediately prior to the sale, transfer and assignment to the Depositor, the applicable Mortgage Loan Seller had good and marketable title to, and was the sole owner of, each Mortgage Loan, and is transferring the Mortgage Loan free and clear of any and all liens, pledges, charges, security interests or any other ownership interests of any nature encumbering such Mortgage Loan;
(iv) the proceeds of such Mortgage Loan have been fully disbursed and there is no requirement for future advances thereunder by the mortgagee;
(v) each related Mortgage Note, Mortgage, assignment of leases, if any, and other agreements executed in connection with such Mortgage Loan is the legal, valid and binding obligation of the related mortgagor (subject to any nonrecourse provisions therein and any state anti-deficiency or market value limit deficiency legislation), enforceable in accordance with its terms, except (a) that certain provisions contained in such Mortgage Loan documents are or may be unenforceable in whole or in part under applicable state or federal laws, but neither the application of any such laws to any such provision nor the inclusion of any such provision renders any of the Mortgage Loan documents invalid as a whole and such Mortgage Loan documents taken as a whole are enforceable to the extent necessary and customary for the practical realization of the rights and benefits afforded thereby, and (b) as such enforcement may be limited by bankruptcy, insolvency, receivership, reorganization, moratorium, redemption, liquidation or other laws affecting the enforcement of creditors’ rights generally, and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law);
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(vi) as of the date of its origination, there was no valid offset, defense, counterclaim, abatement or right to rescission with respect to any of the related Mortgage Notes, Mortgage(s) or other agreements executed in connection therewith, and, as of the Cut-Off Date, there was no valid offset, defense, counterclaim or right to rescission with respect to such Mortgage Note, Mortgage(s) or other agreements, except in each case, with respect to the enforceability of any provisions requiring the payment of default interest, late fees, additional interest, prepayment premiums or yield maintenance charges and the applicable Mortgage Loan Seller has no knowledge of any such rights, defenses or counterclaims having been asserted;
(vii) each related assignment of Mortgage and assignment of leases from the applicable Mortgage Loan Seller to the Trustee constitutes the legal, valid and binding first priority assignment from such Mortgage Loan Seller (subject to the customary limitations set forth in (v) above);
(viii) the related Mortgage is a valid and enforceable first lien on the related Mortgaged Property except for the exceptions set forth in paragraph (v) above and (a) the lien of current real property taxes, ground rents, water charges, sewer rents and assessments not yet due and payable, (b) covenants, conditions and restrictions, rights of way, easements and other matters of public record, none of which, individually or in the aggregate, materially and adversely interferes with the current use of the Mortgaged Property or the security intended to be provided by such Mortgage or with the mortgagor’s ability to pay its obligations under the Mortgage Loan when they become due or materially and adversely affects the value of the Mortgaged Property, (c) the exceptions (general and specific) and exclusions set forth in the related title insurance policy or appearing of record, none of which, individually or in the aggregate, materially and adversely interferes with the current use of the Mortgaged Property or the security intended to be provided by such Mortgage or with the mortgagor’s ability to pay its obligations under the Mortgage Loan when they become due or materially and adversely affects the value of the Mortgaged Property, (d) other matters to which like properties are commonly subject, none of which, individually or in the aggregate, materially and adversely interferes with the current use of the Mortgaged Property or the security intended to be provided by such Mortgage or with the mortgagor’s ability to pay its obligations under the Mortgage Loan when they become due or materially and adversely affects the value of the Mortgaged Property, (e) the right of tenants (whether under ground leases, space leases or operating leases) at the Mortgaged Property to remain following a foreclosure or similar proceeding (provided that such tenants are performing under such leases) and (f) if such Mortgage Loan is cross-collateralized with any other Mortgage Loan, the lien of the Mortgage for such other Mortgage Loan, none of which, individually or in the aggregate, materially and adversely interferes with the current use of the Mortgaged Property or the security intended to be provided by such Mortgage or with the mortgagor’s ability to pay its obligations under the Mortgage Loan when they become due or materially and adversely affects the value of the Mortgaged Property;
(ix) all real estate taxes and governmental assessments, or installments thereof, which would be a lien on the Mortgaged Property and that prior to the Cut-Off Date have become delinquent in respect of the related Mortgaged Property have been paid, or an escrow of funds in an amount sufficient to cover such payments has been established;
(x) as of the date of origination, there was no proceeding pending, and subsequent to that date, the applicable Mortgage Loan Seller has not received notice of any pending or threatening proceeding for the condemnation of all or any material portion of such Mortgaged Property;
(xi) each Mortgaged Property was covered by (1) a fire and extended perils included within the classification ‘‘All Risk of Physical Loss’’ insurance policy in an amount (subject to a customary deductible) at least equal to the lesser of the replacement cost of improvements located on such Mortgaged Property, with no deduction for depreciation, or the outstanding principal balance of the Mortgage Loan and in any event, the amount necessary to avoid the operation of any co-insurance provisions; (2) business interruption or rental loss insurance in an amount at least equal to 12 months of operations of the related Mortgaged Property; and (3) comprehensive general liability insurance against claims for personal and bodily injury, death or property damage occurring on, in or about the related Mortgaged Property in an amount customarily required by prudent commercial mortgage
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lenders, but not less than $1 million; such insurance is required by the Mortgage or related Mortgage Loan documents and was in full force and effect with respect to each related Mortgaged Property at origination and to the knowledge of the Mortgage Loan Seller, all insurance coverage required under each Mortgage is in full force and effect with respect to each Mortgaged Property; and no notice of termination or cancellation with respect to any such insurance policy has been received by the Mortgage Loan Seller; except for certain amounts not greater than amounts which would be considered prudent by a commercial mortgage lender with respect to a similar Mortgage Loan and which are set forth in the related Mortgage, any insurance proceeds in respect of a casualty loss, will be applied either to the repair or restoration of the related Mortgaged Property with mortgagee or a third-party custodian acceptable to mortgagee having the right to hold and disburse the proceeds as the repair or restoration progresses, other than with respect to amounts that are customarily acceptable to commercial and multifamily mortgage lending institutions, or the reduction of the outstanding principal balance of the Mortgage Loan and accrued interest thereon; to the Mortgage Loan Seller’s knowledge, the insurer with respect to each policy is qualified to do business in the relevant jurisdiction to the extent required; the insurance policies contain a standard mortgagee clause or names the mortgagee, its successors and assigns as loss payees in the case of property insurance policies and additional insureds in the case of liability insurance policies and provide that they are not terminable and may not be reduced without 30 days prior written notice to the mortgagee (or, with respect to non-payment of premiums, 10 days prior written notice to the mortgagee) or such lesser period as prescribed by applicable law; and each Mortgage requires that the mortgagor maintain insurance as described above or permits the mortgagee to require insurance as described above;
(xii) other than payments due but not yet 30 days or more delinquent, there is no material default, breach, violation or event of acceleration existing under the related Mortgage or the related Mortgage Note, and, to the applicable Mortgage Loan Seller’s actual knowledge, no event (other than payments due but not yet delinquent) which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a material default, breach, violation or event of acceleration;
(xiii) as of the Closing Date, each Mortgage Loan was not, and in the prior 12 months (or since the date of origination if such Mortgage Loan has been originated within the past 12 months), has not been, 30 days or more past due in respect of any Scheduled Payment;
(xiv) one or more environmental site assessments or updates thereof were performed by an environmental consulting firm independent of the applicable Mortgage Loan Seller and the applicable Mortgage Loan Seller’s affiliates with respect to each related Mortgaged Property during the 18-month period preceding the origination of the related Mortgage Loan, and the applicable Mortgage Loan Seller, having made no independent inquiry other than to review the report(s) prepared in connection with the assessment(s) referenced herein, has no actual knowledge and has received no notice of any material and adverse environmental condition or circumstance affecting such Mortgaged Property that was not disclosed in such report(s); and
(xv) an appraisal of the related Mortgaged Property was conducted in connection with the origination of such Mortgage Loan; and such appraisal satisfied either (A) the requirements of the ‘‘Uniform Standards of Professional Appraisal Practice’’ as adopted by the ‘‘Appraisal Standards Board of the Appraisal Professional Appraisal Practice’’ as adopted by the Appraisal Standards Board of the Appraisal Foundation, or (B) the guidelines in Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, in either case as in effect on the date such Mortgage Loan was originated.
In the case of a breach of any of the representations and warranties in any Mortgage Loan Purchase Agreement that materially and adversely affects the value of a Mortgage Loan (or in the case of certain representations and warranties, is deemed to materially and adversely affect the value of a Mortgage Loan), the interests of the Trust Fund therein or the interests of any Certificateholder, the applicable Mortgage Loan Seller, if it does not cure such breach within a period of 90 days following its receipt of notice thereof, is obligated pursuant to the applicable Mortgage Loan Purchase Agreement (the relevant
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rights under which have been assigned by the Depositor to the Trustee) to either substitute a Qualified Substitute Mortgage Loan and pay any Substitution Shortfall Amount (other than with respect to the Peter Cooper Village & Stuyvesant Town Loan, the Five Times Square Loan, the State Street Financial Center Loan or the 485 Lexington Avenue Loan) or to repurchase the affected Mortgage Loan within such 90-day period at the applicable Purchase Price; provided that unless the breach would cause the Mortgage Loan not to be a qualified mortgage within the meaning of Section 860G(a)(3) of the Code, the applicable Mortgage Loan Seller generally has an additional 90-day period to cure such breach if it is diligently proceeding with such cure. Each Mortgage Loan Seller is solely responsible for its repurchase or substitution obligation, and such obligations will not be the responsibility of the Depositor.
The foregoing substitution or repurchase obligation constitutes the sole remedy available to the Certificateholders and the Trustee for any uncured breach of any Mortgage Loan Seller’s representations and warranties regarding its Mortgage Loans. There can be no assurance that the applicable Mortgage Loan Seller will have the financial resources to repurchase any Mortgage Loan at any particular time. Each Mortgage Loan Seller is the sole warranting party in respect of the Mortgage Loans sold by such Mortgage Loan Seller to the Depositor, and none of the Depositor nor any of such party’s affiliates (except with respect to Wachovia Bank, National Association in its capacity as a Mortgage Loan Seller) will be obligated to substitute or repurchase any such affected Mortgage Loan in connection with a breach of a Mortgage Loan Seller’s representations and warranties if such Mortgage Loan Seller defaults on its obligation to do so.
With respect to any Mortgage Loan which has become a Defaulted Mortgage Loan under the Pooling and Servicing Agreement or with respect to which the related Mortgaged Property has been foreclosed and which is the subject of a repurchase claim under the related Mortgage Loan Purchase Agreement, the Special Servicer with the consent of the Controlling Class Representative will be required to notify the related Mortgage Loan Seller in writing of its intention to sell such Defaulted Mortgage Loan or such foreclosed Mortgaged Property at least 45 days prior to commencing any such action. Such Mortgage Loan Seller shall have 10 business days to determine whether or not to consent to such sale. If such Mortgage Loan Seller does not consent to such sale, the Special Servicer shall contract with a third-party set forth in the Pooling and Servicing Agreement (a ‘‘Determination Party’’) as to the merits of such sale. If the related Determination Party determines that the proposed sale is reasonable, given the circumstances, and subsequent to such sale, a court of competent jurisdiction determines that such Mortgage Loan Seller was liable under the related Mortgage Loan Purchase Agreement and required to repurchase such Defaulted Mortgage Loan or REO Property in accordance with the terms thereof, then such Mortgage Loan Seller will be required to pay an amount equal to the difference (if any) between the proceeds of the related action and the price at which such Mortgage Loan Seller would have been obligated to pay had such Mortgage Loan Seller repurchased such Defaulted Mortgage Loan or REO Property in accordance with the terms thereof which shall generally include the costs related to contracting with the Determination Party. In the event that (a) the Special Servicer ignores the determination of the Determination Party and liquidates the related Defaulted Mortgage Loan or REO Property and/or (b) a court of competent jurisdiction determines that such Mortgage Loan Seller was not obligated to repurchase the related Defaulted Mortgage or REO Property, the costs of contracting with the Determination Party will constitute Additional Trust Fund Expenses, and the Mortgage Loan Seller will not be liable for any such difference.
Repurchase or Substitution of Cross-Collateralized Mortgage Loans
If (i) any Mortgage Loan is required to be repurchased or substituted for in the manner described above in ‘‘—Assignment of the Mortgage Loans; Repurchases and Substitutions’’ or ‘‘—Representations and Warranties; Repurchases and Substitutions’’, (ii) such Mortgage Loan is cross-collateralized and cross-defaulted with one or more other Mortgage Loans (each a ‘‘Crossed Loan’’ and, collectively, a ‘‘Crossed Group’’), and (iii) the applicable document omission or defect (a ‘‘Defect’’) or breach of a representation and warranty (a ‘‘Breach’’) does not constitute a Defect or Breach, as the case may be, as to each other Crossed Loan in such Crossed Group (without regard to this paragraph), then the applicable Defect or Breach, as the case may be, will be deemed to constitute a Defect or Breach, as the case may be, as to any other Crossed Loan in the Crossed Group for purposes of this paragraph, and the related
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Mortgage Loan Seller will be required to repurchase or substitute for such other Crossed Loan(s) in the related Crossed Group as provided above in ‘‘—Assignment of the Mortgage Loans; Repurchases and Substitutions’’ or ‘‘—Representations and Warranties; Repurchases and Substitutions’’ unless: (i) the debt service coverage ratio for all of the remaining Crossed Loans for the four calendar quarters immediately preceding the repurchase or substitution is not less than the debt service coverage ratio for all such related Crossed Loans, including the affected Crossed Loan, for the four calendar quarters immediately preceding the repurchase or substitution, (ii) the loan-to-value ratio for any of the remaining related Crossed Loans, determined at the time of repurchase or substitution, is not greater than the loan-to-value ratio for all such related Crossed Loans, including the affected Crossed Loan, determined at the time of repurchase or substitution, and (iii) the Trustee receives an opinion of counsel to the effect that such repurchase or substitution is permitted by the REMIC provisions. In the event that the remaining Crossed Loans satisfy the aforementioned criteria, the related Mortgage Loan Seller may elect either to repurchase or substitute for only the affected Crossed Loan as to which the related Breach or Defect exists or to repurchase or substitute for all of the Crossed Loans in the related Crossed Group.
To the extent that the related Mortgage Loan Seller repurchases or substitutes for an affected Crossed Loan as described in the immediately preceding paragraph while the Trustee continues to hold any related Crossed Loans, the related Mortgage Loan Seller and the Depositor have agreed in the related Mortgage Loan Purchase Agreement to forbear from enforcing any remedies against the other’s Primary Collateral (as defined below), but each is permitted to exercise remedies against the Primary Collateral securing its respective affected Crossed Loans, including, with respect to the Trustee, the Primary Collateral securing Mortgage Loans still held by the Trustee, so long as such exercise does not materially impair the ability of the other party to exercise its remedies against its Primary Collateral. If the exercise of remedies by one party would materially impair the ability of the other party to exercise its remedies with respect to the Primary Collateral securing the Crossed Loans held by such party, then both parties have agreed in the related Mortgage Loan Purchase Agreement to forbear from exercising such remedies until the loan documents evidencing and securing the relevant Mortgage Loans can be modified in a manner that complies with the related Mortgage Loan Purchase Agreement to remove the threat of material impairment as a result of the exercise of remedies or some other accommodation can be reached. ‘‘Primary Collateral’’ means the Mortgaged Property directly securing a Crossed Loan and excluding any property as to which the related lien may only be foreclosed upon by virtue of the cross collateralization features of such loans.
Changes in Mortgage Pool Characteristics
The descriptions in this prospectus supplement of the Mortgage Loans and the Mortgaged Properties are based upon the Mortgage Pool as it is expected to be constituted as of the close of business on the Closing Date, assuming that (i) all scheduled principal and interest payments due on or before the Cut-Off Date will be made and (ii) there will be no principal prepayments on or before the Cut-Off Date. Prior to the issuance of the Certificates, Mortgage Loans may be removed from the Mortgage Pool as a result of prepayments, delinquencies, incomplete documentation or otherwise, if the Depositor or any Mortgage Loan Seller deems such removal necessary, appropriate or desirable. A limited number of other mortgage loans may be included in the Mortgage Pool prior to the issuance of the Certificates, unless including such mortgage loans would materially alter the characteristics of the Mortgage Pool as described in this prospectus supplement. The Depositor believes that the information set forth in this prospectus supplement will be representative of the characteristics of the Mortgage Pool as it will be constituted at the time the Certificates are issued, although the range of Mortgage Rates and maturities as well as other characteristics of the Mortgage Loans described in this prospectus supplement may vary.
A Current Report on Form 8-K (the ‘‘Form 8-K’’) will be available to purchasers of the Offered Certificates on or shortly after the Closing Date and will be filed, together with the Pooling and Servicing Agreement, with the SEC within fifteen days after the initial issuance of the Offered Certificates.
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SERVICING OF THE MORTGAGE LOANS
General
The Master Servicer and the Special Servicer, either directly or through sub-servicers, are required to service and administer the Mortgage Loans (other than the State Street Financial Center Loan) for the benefit of the Certificateholders, and the Companion Loans (other than the State Street Financial Center Pari Passu Companion Loan) for the benefit of the holders of such Companion Loans, in accordance with applicable law, the terms of the Pooling and Servicing Agreement, the terms of the related Intercreditor Agreement, if applicable, and the terms of the respective Mortgage Loans and, if applicable, the Companion Loans, to the extent consistent with the foregoing, (a) in the same manner in which, and with the same care, skill, prudence and diligence with which, the Master Servicer or the Special Servicer, as the case may be, generally services and administers similar mortgage loans with similar borrowers (i) for other third-parties, giving due consideration to customary and usual standards of practice of prudent institutional commercial mortgage lenders servicing their own loans, or (ii) held in its own portfolio, whichever standard is higher, (b) with a view to the maximization of the recovery on such Mortgage Loans on a net present value basis and the best interests of the Certificateholders and the Trust Fund or, if a Co-Lender Loan and its related Companion Loan(s) (a ‘‘Loan Pair’’) are involved, with a view towards the maximization of recovery on such Loan Pair to the Certificateholders, the holder of the related Companion Loan and the Trust Fund (as a collective whole, taking into account that the Subordinate Companion Loans are subordinate to the related Mortgage Loans and that the related Pari Passu Companion Loans are pari passu in right of entitlement to payment with the related Pari Passu Loans, to the extent set forth in the related Intercreditor Agreement), and (c) without regard to (i) any relationship that the Master Servicer or the Special Servicer, as the case may be, or any affiliate thereof, may have with the related borrower, a Mortgage Loan Seller or any other party to the Pooling and Servicing Agreement or any affiliate thereof; (ii) the ownership of any Certificate or Companion Loan by the Master Servicer or the Special Servicer, as the case may be, or by any affiliate thereof; (iii) the right of the Master Servicer or the Special Servicer, as the case may be, to receive compensation or other fees for its services rendered pursuant to the Pooling and Servicing Agreement; (iv) the obligation of the Master Servicer to make Advances (as defined in this prospectus supplement); (v) the ownership, servicing or management by the Master Servicer or the Special Servicer or any affiliate thereof for others of any other mortgage loans or real property; (vi) any obligation of the Master Servicer, or any affiliate thereof, to repurchase or substitute a Mortgage Loan as a Mortgage Loan Seller; (vii) any obligation of the Master Servicer or any affiliate thereof to cure a breach of a representation and warranty with respect to a Mortgage Loan; and (viii) any debt the Master Servicer or the Special Servicer or any affiliate thereof has extended to any obligor or any affiliate thereof on a Mortgage Note (the foregoing referred to as the ‘‘Servicing Standard’’).
Generally, for purposes of the servicing provisions described in this section, the term Mortgage Loan excludes the State Street Financial Center Loan. See ‘‘—Servicing of the State Street Financial Center Loan’’ below for a description of the servicing of the State Street Financial Center Loan.
The Master Servicer and the Special Servicer may appoint sub-servicers with respect to the Mortgage Loans and Companion Loans; provided that the Master Servicer and the Special Servicer will remain obligated under the Pooling and Servicing Agreement for the servicing of the Mortgage Loans. The Trust Fund will not be responsible for any fees owed to any sub-servicer retained by the Master Servicer or the Special Servicer. Each sub-servicer retained thereby will be reimbursed by the Master Servicer or the Special Servicer, as the case may be, for certain expenditures which it makes, generally to the same extent the Master Servicer or the Special Servicer would be reimbursed under the Pooling and Servicing Agreement.
Set forth below, following the subsection captioned ‘‘—Servicing of the State Street Financial Center Loan’’, is a description of certain pertinent provisions of the Pooling and Servicing Agreement relating to the servicing of the Mortgage Loans and the Companion Loans (but excluding the State Street Financial Center Loan and its Pari Passu Companion Loan). Reference is also made to the accompanying prospectus, in particular to the section captioned ‘‘DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS’’, for important information in addition to that set forth in this prospectus
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supplement regarding the terms and conditions of the Pooling and Servicing Agreement as they relate to the rights and obligations of the Master Servicer and the Special Servicer thereunder. The Special Servicer generally has all of the rights to indemnity and reimbursement, and limitations on liability, that the Master Servicer is described as having in the accompanying prospectus and certain additional rights to indemnity as provided in the Pooling and Servicing Agreement relating to actions taken at the direction of the Controlling Class Representative (and, in certain circumstances, the holder of a Subordinate Companion Loan), and the Special Servicer rather than the Master Servicer will perform the servicing duties described in the accompanying prospectus with respect to Specially Serviced Mortgage Loans and REO Properties (each as described in this prospectus supplement). In addition to the circumstances for resignation of the Master Servicer set forth in the accompanying prospectus, the Master Servicer and the Special Servicer each has the right to resign at any other time; provided that (i) a willing successor thereto has been found, (ii) each of the Rating Agencies confirms in writing that the successor’s appointment will not result in a withdrawal, qualification or downgrade of any rating or ratings assigned to any Class of Certificates, (iii) the resigning party pays all costs and expenses in connection with such transfer, and (iv) the successor accepts appointment prior to the effectiveness of such resignation. Under the terms of the Pooling and Servicing Agreement, if a successor to the Master Servicer is not appointed, the Trustee will function as the Master Servicer until a successor is appointed. See ‘‘DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS—Certain Matters Regarding the Master Servicer and the Depositor’’ in the accompanying prospectus.
With respect to any Loan Pair, the Companion Loan for which is included in a securitization trust that is subject to the provisions of Regulation AB of the Securities Act, the Master Servicer, Special Servicer, Trustee and any subservicer will be required to provide such reports and information and otherwise take such commercially reasonable actions with respect to such Companion Loan as is necessary for the Depositor, Issuing Entity, Master Servicer, Special Servicer and Trustee to comply with all requirements of Regulation AB of the Securities Act.
The Master Servicer
Wachovia Bank, National Association, will act as the master servicer (in such capacity, the ‘‘Master Servicer’’) under the Pooling and Servicing Agreement. The Master Servicer is a national banking association organized under the laws of the United States of America and is a wholly-owned subsidiary of Wachovia Corporation. The Master Servicer has been servicing commercial and multifamily mortgage loans in excess of ten years. The Master Servicer’s primary servicing system runs on EnableUs software. The Master Servicer reports to trustees in the CMSA format. The Master Servicer’s principal servicing offices are located at NC 1075, 8739 Research Drive URP4, Charlotte, North Carolina 28262. The table below sets forth information about the Master Servicer’s portfolio of master or primary serviced commercial and multifamily mortgage loans as of the dates indicated:
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Commercial and Multifamily Mortgage Loans | ![]() | ![]() | As of December 31, 2003 | ![]() | ![]() | As of December 31, 2004 | ![]() | ![]() | As of December 31, 2005 | ![]() | ![]() | As of December 31, 2006 | ||||||||||||
By Approximate Number | ![]() | ![]() | ![]() | ![]() | 10,015 | ![]() | ![]() | ![]() | ![]() | ![]() | 15,531 | ![]() | ![]() | ![]() | ![]() | ![]() | 17,641 | ![]() | ![]() | ![]() | ![]() | ![]() | 20,725 | ![]() |
By Approximate Aggregate Unpaid Principal Balance (in Billions) | ![]() | ![]() | ![]() | $ | 88.6 | ![]() | ![]() | ![]() | ![]() | $ | 141.3 | ![]() | ![]() | ![]() | ![]() | $ | 182.5 | ![]() | ![]() | ![]() | ![]() | $ | 262.1 | ![]() |
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Within this portfolio, as of December 31, 2006, are approximately 20,725 commercial and multifamily mortgage loans with an unpaid principal balance of approximately $262.1 billion related to commercial mortgage backed securities (or commercial real estate collateralized debt obligation securities).
In addition to servicing loans related to commercial mortgage-backed securities and commercial real estate collateralized debt obligation securities, the Master Servicer also services whole loans for itself and a variety of investors. The properties securing loans in the Master Servicer’s servicing portfolio as of December 31, 2006, were located in all 50 states, the District of Columbia, Guam, Mexico, the Bahamas, the Virgin Islands and Puerto Rico and include retail, office, multifamily, industrial, hospitality and other types of income-producing properties.
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The Master Servicer utilizes a mortgage-servicing technology platform with multiple capabilities and reporting functions. This platform allows the Master Servicer to process mortgage servicing activities including but not limited to: (i) performing account maintenance; (ii) tracking borrower communications; (iii) tracking real estate tax escrows and payments, insurance escrows and payments, replacement reserve escrows and operating statement data and rent rolls; (iv) entering and updating transaction data; and (v) generating various reports.
The table below sets forth information regarding the aggregate amount of principal and interest advances and servicing advances (i) made by the Master Servicer on commercial and multifamily mortgage loans included in commercial mortgage-backed securitizations master serviced by the Master Servicer and (ii) outstanding as of the dates indicated:
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Date | ![]() | ![]() | Approximate Securitized Master Serviced Portfolio (UPB)* | ![]() | ![]() | Approximate Outstanding Advances (P&I and PPA)* | ![]() | ![]() | Approximate Outstanding Advances as % of UPB | |||||||||
December 31, 2003 | ![]() | ![]() | ![]() | $ | 74,461,414,561 | ![]() | ![]() | ![]() | ![]() | $ | 84,616,014 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.1 | % |
December 31, 2004 | ![]() | ![]() | ![]() | $ | 113,159,013,933 | ![]() | ![]() | ![]() | ![]() | $ | 129,858,178 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.1 | % |
December 31, 2005 | ![]() | ![]() | ![]() | $ | 142,222,662,628 | ![]() | ![]() | ![]() | ![]() | $ | 164,516,780 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.1 | % |
December 31, 2006 | ![]() | ![]() | ![]() | $ | 201,283,960,215 | ![]() | ![]() | ![]() | ![]() | $ | 162,396,491 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.1 | % |
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* | ‘‘UPB’’ means unpaid principal balance, ‘‘P&I’’ means principal and interest advances and ‘‘PPA’’ means property protection advances. |
The Master Servicer is rated by Fitch and S&P as a primary servicer and master servicer. The Master Servicer’s ratings by each of these agencies is outlined below:
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Primary Servicer | ![]() | ![]() | ![]() | ![]() | CPS2+ | ![]() | ![]() | ![]() | ![]() | ![]() | Strong | ![]() |
Master Servicer | ![]() | ![]() | ![]() | ![]() | CMS2 | ![]() | ![]() | ![]() | ![]() | ![]() | Strong | ![]() |
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The short-term debt ratings of Wachovia Bank, National Association are ‘‘A-1+’’ by S&P, ‘‘P-1’’ by Moody’s and ‘‘F1+’’ by Fitch.
The Master Servicer has developed policies, procedures and controls relating to its servicing functions to maintain compliance with applicable servicing agreements and servicing standards, including procedures for handling delinquent loans during the period prior to the occurrence of a special servicing transfer event.
The Master Servicer’s servicing policies and procedures are updated periodically to keep pace with the changes in the commercial mortgage-backed securities industry and have been generally consistent for the last three years in all material respects. The only significant changes in the Master Servicer’s policies and procedures have come in response to changes in federal or state law or investor requirements, such as updates issued by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation. The Master Servicer may perform any of its obligations under the Pooling and Servicing Agreement through one or more third-party vendors, affiliates or subsidiaries. The Master Servicer may engage third-party vendors to provide technology or process efficiencies. The Master Servicer monitors its third-party vendors in compliance with its internal procedures and applicable law. The Master Servicer has entered into contracts with third-party vendors for the following functions:
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• | monitoring and applying interest rate changes with respect to adjustable rate mortgage loans in accordance with loan documents; |
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• | provision of Strategy and Strategy CS software; |
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• | identification, classification, imaging and storage of documents; |
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• | analysis and determination of amounts to be escrowed for payment of taxes and insurance; |
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• | entry of rent roll information and property performance data from operating statements; |
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• | tracking and reporting of flood zone changes; |
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• | tracking, maintenance and payment of rents due under ground leases; |
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• | abstracting of insurance requirements contained in loan documents; |
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• | comparison of insurance certificates to insurance requirements contained in loan documents and reporting of expiration dates and deficiencies, if any; |
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• | abstracting of leasing consent requirements contained in loan documents; |
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• | legal representation; |
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• | assembly of data regarding buyer and seller (borrower) with respect to proposed loan assumptions and preparation of loan assumption package for review by the Master Servicer; |
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• | maintenance and storage of letters of credit; |
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• | tracking of anticipated repayment dates for loans with such terms; |
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• | reconciliation of deal pricing, tapes and annexes prior to securitization; |
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• | entry of new loan data and document collection; |
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• | initiation of loan payoff process and provision of payoff quotes; |
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• | printing, imaging and mailing of statements to borrowers; |
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• | performance of property inspections; |
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• | performance of tax parcel searches based on property legal description, monitoring and reporting of delinquent taxes, and collection and payment of taxes; |
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• | review of financial spreads performed by sub-servicers; |
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• | review of borrower requests for disbursements from reserves for compliance with loan documents, which are submitted to the Master Servicer for approval; and |
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• | performance of UCC searches and filing of UCCs. |
The Master Servicer may also enter into agreements with certain firms to act as a primary servicer and to provide cashiering or non-cashiering sub-servicing on certain loans.
Generally, all amounts received by the Master Servicer on the Mortgage Loans are initially deposited into a common clearing account with collections on other mortgage loans serviced by the Master Servicer and are then allocated and transferred to the appropriate account within the time described in this prospectus supplement. On the day any amount is to be disbursed by the Master Servicer, that amount is transferred to a common disbursement account prior to disbursement.
The Master Servicer will not have primary responsibility for custody services of original documents evidencing the Mortgage Loans. On occasion, the Master Servicer may have custody of certain of such documents as necessary for enforcement actions involving Mortgage Loans or otherwise. To the extent the Master Servicer performs custodial functions as the master servicer, documents will be maintained in a manner consistent with the Servicing Standard. Custodial functions will be performed by the Trustee as described under ‘‘DESCRIPTION OF THE MORTGAGE POOL—Assignment of the Mortgage Loans; Repurchases and Substitutions’’ in this prospectus supplement.
There are no legal proceedings pending against Wachovia Bank, National Association, or to which any property of Wachovia Bank, National Association is subject, that are material to the Certificateholders, nor does Wachovia Bank, National Association have actual knowledge of any proceedings of this type contemplated by governmental authorities.
The information set forth herein regarding the Master Servicer has been provided by Wachovia Bank, National Association.
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The Special Servicer
CWCapital Asset Management LLC (‘‘CWCAM’’), a Massachusetts limited liability company, will initially be appointed as Special Servicer of the underlying Mortgage Loans under the Pooling and Servicing Agreement. The principal servicing offices of CWCAM are located at 700 Twelfth Street, N.W., Suite 700, Washington, D.C. 20005 and its telephone number is (888) 880-8958. CWCAM and its affiliates are involved in the real estate investment, finance and management business, including:
• originating commercial and multifamily real estate loans;
• investing in high yielding real estate loans and other commercial real estate debt instruments; and
• investing in, surveilling and managing as special servicer, unrated and non investment grade rated securities issued pursuant to CMBS and CRE CDO transactions.
CWCAM was organized in June 2005. In July of 2005, it acquired Allied Capital Corporation’s special servicing operations and replaced Allied Capital Corporation as special servicer for all transactions for which Allied Capital Corporation served as special servicer. In February 2006, an affiliate of CWCAM merged with CRIIMI MAE, Inc. (‘‘CMAE’’) and the special servicing operations of CRIIMI MAE Services L.P., the special servicing subsidiary of CMAE, were consolidated into the special servicing operations of CWCAM. An affiliate or affiliates of CWCAM may acquire certain of the Non Offered Certificates. CWCAM is a wholly owned subsidiary of CW Financial Services LLC. CWCAM and its affiliates own and are in the business of acquiring assets similar in type to the assets of the Trust Fund. Accordingly, the assets of CWCAM and its affiliates may, depending upon the particular circumstances including the nature and location of such assets, compete with the mortgaged real properties for tenants, purchasers, financing and so forth.
Because CWCAM was not formed until June 2005, CWCAM did not serve as special servicer for any CMBS pools as of December 31, 2003, or as of December 31, 2004. As of December 31, 2005, CWCAM acted as special servicer with respect to 25 domestic CMBS pools containing approximately 3670 loans secured by properties throughout the United States with a then current face value in excess of $32 billion. As of December 31, 2006, CWCAM acted as special servicer with respect to 94 domestic and 2 Canadian CMBS pool containing approximately 11,100 loans secured by properties throughout the United States and Canada with a then current face value in excess of $108.7 billion. Those loans include commercial mortgage loans secured by the same types of income producing properties as those securing the Mortgage Loans backing the Certificates.
CWCAM has three offices (Washington, D.C., Rockville, Maryland and Needham, Massachusetts) and CWCAM provides special servicing activities for investments in over 88 markets throughout the United States. As of December 31, 2006, CWCAM had 57 employees responsible for the special servicing of commercial real estate assets. As of December 31, 2006, within the CMBS pools described in the preceding paragraph, 162 assets were actually in special servicing. The assets owned or managed by CWCAM and its affiliates may, depending upon the particular circumstances, including the nature and location of such assets, compete with the mortgaged real properties securing the underlying Mortgage Loans for tenants, purchasers, financing and so forth. CWCAM does not service or manage any assets other than commercial and multifamily real estate assets.
Since its formation, policies and procedures of special servicing at CWCAM have been adopted from the best practices of the Allied Capital Corporation and CRIIMI MAE Services L.P., operations that it has acquired. These policies and procedures for the performance of its special servicing obligations among other things in compliance with applicable servicing criteria set forth in Item 1122 of Regulation AB of the Securities Act, including managing delinquent loans and loans subject to the bankruptcy of the borrower. Standardization and automation have been pursued, and continue to be pursued, wherever possible so as to provide for continued accuracy, efficiency, transparency, monitoring and controls.
CWCAM occasionally engages consultants to perform property inspections and to provide close surveillance on a property and its local market; it currently does not have any plans to engage sub servicers to perform on its behalf any of its duties with respect to this transaction. CWCAM does not believe that its financial condition will have any adverse effect on the performance of its duties under the
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Pooling and Servicing Agreement and, accordingly, will not have any material impact on the mortgage pool performance or the performance of the Certificates. CWCAM does not have any material primary principal and interest advancing obligations with respect to the CMBS pools as to which it acts as special servicer and only has primary property protection advancing obligations for one CMBS pool.
CWCAM will not have primary responsibility for custody services of original documents evidencing the underlying Mortgage Loans. On occasion, CWCAM may have custody of certain of such documents as necessary for enforcement actions involving particular Mortgage Loans or otherwise. To the extent that CWCAM has custody of any such documents, such documents will be maintained in a manner consistent with the servicing standard.
There are currently no legal proceedings pending, and no legal proceedings known to be contemplated by governmental authorities, against CWCAM or of which any of its property is the subject, that is material to the Certificateholders.
CWCAM is not an affiliate of the Depositor, the Trust Fund, the Master Servicer or the Trustee. However, CWCAM is an affiliate of CWCapital LLC, a Sponsor under this transaction and an affiliate of Cadim TACH inc., the anticipated initial holder of certain Non Offered Certificates. There are no specific relationships involving or relating to this transaction or the underlying Mortgage Loans between CWCAM or any of its affiliates, on the one hand, and the Depositor, the Master Servicer or the Trust Fund, on the other hand, that currently exist or that existed during the past two years. In addition, there are no business relationships, agreements, arrangements, transactions or understandings that have been entered into outside the ordinary course of business or on terms other than would be obtained in an arm’s length transaction with an unrelated third party—apart from the subject securitization transaction— between CWCAM or any of its affiliates, on the one hand, and the Depositor, the Master Servicer or the Trust Fund, on the other hand, that currently exist or that existed during the past two years and that are material to an investor’s understanding of the Offered Certificates.
No securitization transaction involving commercial or multifamily mortgage loans in which CWCAM was acting as special servicer has experienced an event of default as a result of any action or inaction performed by CWCAM as special servicer. In addition, there has been no previous disclosure of material non compliance with servicing criteria by CWCAM with respect to any other securitization transaction involving commercial or multifamily mortgage loans in which CWCAM was acting as special servicer.
From time to time, CWCAM and its affiliates may be parties to lawsuits and other legal proceedings arising in the ordinary course of business. CWCAM does not believe that any such lawsuits or legal proceedings would, individually or in the aggregate, have a material adverse effect on its business or its ability to service as special servicer.
The information set forth herein regarding the Special Servicer has been provided by CWCAM.
Certain Special Servicing Provisions
With respect to the Mortgage Loans, the Pooling and Servicing Agreement permits the holder (or holders) of the majority of the Voting Rights allocated to the Controlling Class to replace the Special Servicer and to select a representative (the ‘‘Controlling Class Representative’’) who may advise the Special Servicer and whose approval is required for certain actions by the Special Servicer under certain circumstances. With respect to the State Street Financial Center Loan, the rights of the Controlling Class Representative to advise on certain servicing actions are shared with the LB-UBS 2007-C1 Controlling Class Representative, however in the event the two parties are not able to agree on such servicing actions the LB-UBS 2007-C1 Controlling Class Representative shall control the decisions. Additionally, the LB-UBS 2007-C1 Special Servicer may be removed at any time, with or without cause, by the LB-UBS 2007-C1 Controlling Class Representative, without the consent of the Controlling Class Representative. See ‘‘—Servicing of the State Street Financial Center Loan’’ below. With respect to the Five Times Square Loan and the 485 Lexington Avenue Loan, if either of the related Pari Passu Companion Loans is included in a securitization, the rights of the Controlling Class Representative to advise on certain servicing actions will be shared with the controlling class representative with respect to such securitization. Notwithstanding anything contained in this prospectus supplement to the contrary, the
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holders of the Companion Loans may have the ability to exercise some or all of the rights of the Controlling Class and the Controlling Class Representative as well as certain additional rights as more fully described in ‘‘—The Controlling Class Representative’’ below including, with respect to the One Congress Street Loan, the Tyco International Building Loan, the Morgan Apartments Loan, the Five Times Square Loan, the PNC Corporate Plaza Loan, the Spring Mill Corporate Center Loan and the Eastland Center Loan, the right to replace the Special Servicer solely with respect to the related Mortgage Loan. The Controlling Class Representative with respect to the Mortgage Loans is selected by holders of Certificates representing more than 50% of the Certificate Balance of the Controlling Class. See ‘‘—The Controlling Class Representative’’ below. Such holder (or holders) will be required to pay all out-of-pocket costs related to the transfer of servicing if the Special Servicer is replaced other than due to an event of default, including without limitation, any costs relating to Rating Agency confirmation and legal fees associated with the transfer. The ‘‘Controlling Class’’ is the Class of Sequential Pay Certificates, (i) which bears the latest payment priority and (ii) the Certificate Balance of which is greater than 25% of its original Certificate Balance; provided, however, if no Class of Sequential Pay Certificates satisfies clause (ii) above, the Controlling Class shall be the outstanding Class of Sequential Pay Certificates bearing the latest payment priority. The Class A-1, Class A-2, Class A-3, Class A-4, Class A-PB, Class A-5 and Class A-1A Certificates will be treated as one Class for purposes of determining the Controlling Class.
The Special Servicer is responsible for servicing and administering any Mortgage Loan (other than the State Street Financial Center Loan) or Companion Loan (other than the State Street Financial Center Pari Passu Companion Loan) as to which (a) the related mortgagor has (i) failed to make any Balloon Payment; provided, however, if the borrower continues to make its Assumed Scheduled Payment and diligently pursues refinancing, a Servicing Transfer Event shall not occur until 60 days following such default (or, if the Master Servicer has, within 60 days after the Due Date of such Balloon Payment, received written evidence from an institutional lender of such lender’s binding commitment (which is reasonably acceptable to the Special Servicer and the Controlling Class Representative has given its consent (which consent shall be deemed denied if not granted within 10 Business Days)) to refinance such Mortgage Loan, 120 days following such default) (provided that if such refinancing does not occur during such time specified in the commitment, a Servicing Transfer Event will be deemed to have occurred), or (ii) failed to make when due any Periodic Payment (other than a Balloon Payment), and such failure has continued unremedied for 60 days; (b) the Master Servicer or the Special Servicer (in the case of the Special Servicer, with the consent of the Controlling Class Representative) has determined, in its good faith reasonable judgment and in accordance with the Servicing Standard, based on communications with the related mortgagor, that a default in making a Periodic Payment (including a Balloon Payment) or any other default under the applicable Mortgage Loan documents that would (with respect to such other default) materially impair the value of the Mortgaged Property as security for the Mortgage Loan and, if applicable, Companion Loan or otherwise would materially adversely affect the interests of Certificateholders and would continue unremedied beyond the applicable grace period under the terms of the Mortgage Loan (or, if no grace period is specified, for 60 days; provided that a default would give rise to an acceleration right without any grace period shall be deemed to have a grace period equal to zero) is likely to occur and is likely to remain unremedied for at least 60 days; (c) there shall have occurred a default (other than as described in clause (a) above and, in certain circumstances, the failure to maintain insurance for terrorist or similar attacks or for other risks required by the Mortgage Loan documents to be insured against pursuant to the terms of the Pooling and Servicing Agreement) that the Master Servicer or the Special Servicer (in the case of the Special Servicer, with the consent of the Controlling Class Representative) shall have determined, in its good faith and reasonable judgment and in accordance with the Servicing Standard, materially impairs the value of the Mortgaged Property as security for the Mortgage Loan and, if applicable, Companion Loan or otherwise materially adversely affects the interests of Certificateholders (and, if applicable, the holders of the Companion Loans) and that continues unremedied beyond the applicable grace period under the terms of the Mortgage Loan (or, if no grace period is specified, for 60 days; provided that a default that gives rise to an acceleration right without any grace period shall be deemed to have a grace period equal to zero); (d) a decree or order under any bankruptcy, insolvency or similar law shall have been entered against the related borrower and such decree or order shall have remained in force, undischarged, undismissed or unstayed for a period of 60 days; (e) the related borrower shall consent to the appointment of a conservator or receiver or liquidator
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in any insolvency or similar proceedings of or relating to such related borrower or of or relating to all or substantially all of its property; (f) the related borrower shall admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage of any applicable insolvency or reorganization statute, make an assignment for the benefit of its creditors, or voluntarily suspend payment of its obligations; (g) the Master Servicer shall have force placed insurance against damages or losses arising from acts of terrorism due to the failure of the related borrower to maintain or cause such insurance to be maintained and (1) subsequent to such force placement such borrower fails to maintain or cause to be maintained insurance coverage against damages or losses arising from acts of terrorism for a period of 60 days (or such shorter time period as the Controlling Class Representative may consent to) or (2) the Master Servicer fails to have been reimbursed for any Servicing Advances made in connection with the force placement of such insurance coverage (unless the circumstances giving rise to such forced placement of such insurance coverage have otherwise been cured and the Master Servicer has been reimbursed for any Servicing Advances made in connection with the forced placement of such insurance coverage); or (h) the Master Servicer shall have received notice of the commencement of foreclosure or similar proceedings with respect to the related Mortgaged Property (each event described in clauses (a) through (h) above, a ‘‘Servicing Transfer Event’’).
In general, as long as a Co-Lender Loan (other than the State Street Financial Center Loan) is owned by the Trust Fund, each related Companion Loan will be serviced and administered under the Pooling and Servicing Agreement as if it were a Mortgage Loan and the holder of the related promissory note were a Certificateholder. If a Companion Loan (other than the State Street Financial Center Pari Passu Companion Loan) becomes specially serviced, then the Co-Lender Loan will become a Specially Serviced Mortgage Loan. If a Co-Lender Loan (other than the State Street Financial Center Loan) becomes a Specially Serviced Mortgage Loan, then the related Companion Loan will become a Specially Serviced Mortgage Loan.
If any amounts due under a Co-Lender Loan or the related Subordinate Companion Loan are accelerated after an event of default under the applicable Mortgage Loan documents, the holder of any related Subordinate Companion Loan will be entitled to purchase the related Mortgage Loan at the price described under ‘‘DESCRIPTION OF THE MORTGAGE POOL—Co-Lender Loans’’ in this prospectus supplement.
If a Servicing Transfer Event occurs with respect to any Mortgage Loan (other than the State Street Financial Center Loan) or a related Companion Loan, the Master Servicer is in general required to transfer its servicing responsibilities with respect to such Mortgage Loan and Companion Loan to the Special Servicer. Notwithstanding such transfer, the Master Servicer will continue to receive payments on such Mortgage Loan and/or Companion Loan (including amounts collected by the Special Servicer), to make certain calculations with respect to such Mortgage Loan and Companion Loan, and to make remittances (including, if necessary, P&I Advances, as described in the Pooling and Servicing Agreement) and prepare certain reports to the Trustee with respect to such Mortgage Loan. If title to the related Mortgaged Property is acquired by the Trust Fund (upon acquisition, an ‘‘REO Property’’), whether through foreclosure, deed in lieu of foreclosure or otherwise, the Special Servicer will continue to be responsible for the management thereof.
Mortgage Loans and Companion Loans serviced by the Special Servicer, together with any REO Properties are referred to in this prospectus supplement as ‘‘Specially Serviced Mortgage Loans’’. The Master Servicer has no responsibility for the Special Servicer’s performance of its duties under the Pooling and Servicing Agreement.
A Mortgage Loan (other than the State Street Financial Center Loan) or Companion Loan (other than the State Street Financial Center Pari Passu Companion Loan) will cease to be a Specially Serviced Mortgage Loan (and will become a ‘‘Corrected Mortgage Loan’’ as to which the Master Servicer will re-assume servicing responsibilities):
(a) with respect to the circumstances described in clause (a) of the definition of Servicing Transfer Event, when the related borrower has made three consecutive full and timely Periodic Payments under the terms of such Mortgage Loan (as such terms may be changed or modified in
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connection with a bankruptcy or similar proceeding involving the related borrower or by reason of a modification, waiver or amendment granted or agreed to by the Special Servicer);
(b) with respect to any of the circumstances described in clauses (b), (d), (e) and (f) of the definition of Servicing Transfer Event, when such circumstances cease to exist in the good faith, reasonable judgment of the Special Servicer, but, with respect to any bankruptcy or insolvency proceedings described in clauses (d), (e) and (f) no later than the entry of an order or decree dismissing such proceeding;
(c) with respect to the circumstances described in clause (c) of the definition of Servicing Transfer Event, when such default is cured; and
(d) with respect to the circumstances described in clause (h) of the definition of Servicing Transfer Event, when such proceedings are terminated;
so long as at that time no other Servicing Transfer Event then exists and provided no additional default is foreseeable in the reasonable good faith judgment of the Special Servicer.
The Master Servicer (or, in certain limited cases with respect to Specially Serviced Mortgage Loans, the Special Servicer), either directly or through sub-servicers, will direct the deposit, transfer and disbursement of collections on the Mortgage Loans consistent with the Servicing Standard. Account activity will not generally be independently audited or verified. See ‘‘DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS—Certificate Account’’ and ‘‘—Collection and Other Servicing Procedures’’ in the attached prospectus.
Servicing of the State Street Financial Center Loan
The State Street Financial Center Loan, and any related REO Property, is being serviced under the pooling and servicing agreement which governs the LB-UBS 2007-C1 Transaction (the ‘‘LB-UBS 2007-C1 Pooling and Servicing Agreement’’). Accordingly, the master servicer under the LB-UBS 2007-C1 Pooling and Servicing Agreement (the ‘‘LB-UBS 2007-C1 Master Servicer’’) will generally make servicing advances (but not principal interest advances with respect to the State Street Financial Center Loan) and remit collections on the State Street Financial Center Loan to or on behalf of the Trust Fund. However, the Master Servicer will generally be obligated to compile reports, that include information on the State Street Financial Center Loan, and to enforce the terms the State Street Financial Center Intercreditor Agreement and make certain principal and interest advances with respect to the State Street Financial Center Loan, subject to its non-recoverability determination. The servicing arrangements under the LB-UBS 2007-C1 Pooling and Servicing Agreement are generally similar (but are not identical) to the servicing arrangements under the Pooling and Servicing Agreement.
In that regard:
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• | KeyCorp Real Estate Capital Markets, Inc. is the LB-UBS 2007-C1 Master Servicer under the LB-UBS 2007-C1 Pooling and Servicing Agreement. The special servicer under the LB-UBS 2007-C1 Pooling and Servicing Agreement with respect to each of the mortgage loans serviced under the LB-UBS 2007-C1 Pooling and Servicing Agreement is Midland Loan Services, Inc. (the ‘‘LB-UBS 2007-C1 Special Servicer’’). The controlling class representative under the LB-UBS 2007-C1 Transaction is entitled to remove and replace the LB-UBS 2007-C1 Special Servicer without cause and without the consent of the Controlling Class Representative. |
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• | The trustee under the LB-UBS 2007-C1 Pooling and Servicing Agreement is LaSalle Bank National Association (the ‘‘LB-UBS 2007-C1 Trustee’’), who will be the mortgagee of record for the State Street Financial Center Loan. |
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• | The Master Servicer, the Special Servicer or the Trustee under the Pooling and Servicing Agreement will have no obligation or authority to (a) supervise the LB-UBS 2007-C1 Master Servicer, the LB-UBS 2007-C1 Special Servicer or the LB-UBS 2007-C1 Trustee or (b) except as described below, make servicing advances with respect to the State Street Financial Center Loan. The obligation of the Master Servicer to provide information and collections to the Trustee and the Certificateholders with respect to the State Street Financial Center Loan is dependent on its receipt of the corresponding information and collection from the LB-UBS 2007-C1 Master Servicer or the LB-UBS 2007-C1 Special Servicer. |
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• | Pursuant to the LB-UBS 2007-C1 Pooling and Servicing Agreement, the liquidation fee, the special servicing fee and the workout fee with respect to the State Street Financial Center Loan will be generally the same as under the Pooling and Servicing Agreement. |
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• | The LB-UBS 2007 C-1 Master Servicer will have a property inspection performed at least once every two years for each mortgaged property with allocated loan amounts of $2,000,000 or less, and at least once a year for all other mortgaged properties. |
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• | The Master Servicer will be required to make P&I Advances with respect to the State Street Financial Center Loan, unless the Master Servicer, after receiving the necessary information from the LB-UBS 2007-C1 Master Servicer, has determined that such advance would not be recoverable from collections on the State Street Financial Center Loan. |
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• | If the LB-UBS 2007-C1 Master Servicer determines that a servicing advance it made with respect to the State Street Financial Center Loan, or the Mortgaged Property, as applicable, is nonrecoverable, it will be entitled to be reimbursed from general collections on all Mortgage Loans. |
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• | In connection with the sale of a defaulted mortgage loan under the LB-UBS 2007 C-1 Pooling and Servicing Agreement, the LB-UBS 2007-C1 Special Servicer and the holder(s) of a majority of the voting rights of the controlling class under the LB-UBS 2007-C1 Pooling and Servicing Agreement are granted purchase options with respect to the defaulted mortgage loan and may submit competing bids within ten days following notice that the LB-UBS 2007 C-1 Special Servicer has received a fair value bid. If a bid is accepted by the LB-UBS 2007 C-1 Special Servicer, such purchase option holder will have ten days to purchase the default mortgage loan. If the LB-UBS 2007 C-1 Special Servicer has not accepted a fair value bid within 120 days, then a purchase option holder can request updated fair value bid, which the LB-UBS 2007 C-1 Special Servicer will have 45 days to re-calculate. |
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• | The LB-UBS 2007-C1 Master Servicer is responsible for any request made by the applicable borrower under the State Street Financial Center Whole Loan to approve certain leasing activities other than granting or entering into any subordination, non-disturbance or attornment agreement (an ‘‘SNDA’’), it being agreed pursuant to the terms of the LB-UBS 2007-C1 Pooling and Servicing Agreement, that the LB-UBS 2007-C1 Master Servicer shall not grant, but shall forward to the LB-UBS 2007-C1 Special Servicer, all requests for and any lease that requires an SNDA (or any waiver, consent, approval, amendment or modification in connection therewith). |
Compensation and Payment of Expenses
The Master Servicer, the Special Servicer and the Trustee will be entitled to payment of certain fees as compensation for its services performed under the Pooling and Servicing Agreement. Certain additional fees and costs payable by the related Mortgagors are allocable to the Master Servicer, the Special Servicer and the Trustee, but such amounts are not payable from amounts that the Trust Fund is entitled to receive.
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The table below summarizes the related fees and expenses to be paid from the assets of the Trust Fund and the recipient, general purpose and frequency of payments for those fees and expenses:
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Type / Recipient(1)(2) | ![]() | ![]() | Amount | ![]() | ![]() | Source(3) | ![]() | ![]() | Frequency |
Fees | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||
Master Servicing Fee / Master Servicer | ![]() | ![]() | With respect to the pool of Mortgage Loans (other than Specially Serviced Mortgage Loans) in the Trust Fund, one-twelfth of the product of the related annual Master Servicing Fee Rate (4) calculated on the outstanding principal amount of the pool of Mortgage Loans in the Trust Fund. | ![]() | ![]() | First, out of recoveries of interest with respect to that Mortgage Loan and then, if the related Mortgage Loan and any related REO Property has been liquidated, out of general collections on deposit in the Certificate Account. | ![]() | ![]() | Monthly |
Additional Master Servicing Compensation / Master Servicer | ![]() | ![]() | Prepayment Interest Excesses, net of Prepayment Interest Shortfalls, on underlying Mortgage Loans that are the subject of a principal prepayment in full or in part after its due date in any collection period. | ![]() | ![]() | Interest payments made by the related borrower intended to cover interest accrued on the subject principal prepayment with respect to the related Mortgage Loan during the period from and after the related Due Date. | ![]() | ![]() | Time to time |
![]() | ![]() | All interest and investment income earned on amounts on deposit in the collection account. | ![]() | ![]() | Interest and investment income related to the subject accounts (net of investment losses). | ![]() | ![]() | Monthly | |
![]() | ![]() | All interest and investment income earned on amounts on deposit in the servicing accounts and reserve accounts, to the extent not otherwise payable to the borrower. | ![]() | ![]() | Interest and investment income related to the subject accounts (net of investment losses). | ![]() | ![]() | Monthly | |
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Type / Recipient(1)(2) | ![]() | ![]() | Amount | ![]() | ![]() | Source(3) | ![]() | ![]() | Frequency |
![]() | ![]() | Late payment charges and default interest actually collected with respect to any Mortgage Loan in the Trust Fund during any collection period, but only to the extent that such late payment charges and default interest accrued while it was a non-specially serviced Mortgage Loan and are not otherwise allocable to pay the following items with respect to the related Mortgage Loan: (i) interest on advances; or (ii) Additional Trust Fund Expenses (exclusive of Special Servicing Fees, Liquidation Fees and Workout Fees) currently payable or previously paid with respect to the related Mortgage Loan or Mortgaged Property from collections on the mortgage pool and not previously reimbursed. | ![]() | ![]() | Payments of late payment charges and default interest made by borrowers with respect to the underlying Mortgage Loans. | ![]() | ![]() | Time to time | |
Special Servicing Fee / Special Servicer | ![]() | ![]() | With respect to each Mortgage Loan that is being specially serviced or as to which the related Mortgaged Property has become an REO Property, one-twelfth of the product of the annual Special Servicing Fee Rate(5) computed on the basis of the same principal amount in respect of which any related interest payment is due on such Mortgage Loan or REO Loan. | ![]() | ![]() | Out of general funds on deposit in the Certificate Account. | ![]() | ![]() | Monthly |
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Type / Recipient(1)(2) | ![]() | ![]() | Amount | ![]() | ![]() | Source(3) | ![]() | ![]() | Frequency |
Workout Fee / Special Servicer | ![]() | ![]() | With respect to each Mortgage Loan that is a worked-out Mortgage Loan, the Workout Fee Rate of 1.00% multiplied by all payments of interest and principal received on the subject Mortgage Loan for so long as it remains a Corrected Mortgage Loan or, with respect to the Peter Cooper Village & Stuyvesant Town Loan, the lesser of (i) 0.50% of all payments of interest and principal received on such mortgage loan for so long as it remains a corrected mortgage loan, and (ii) $15,000,000 . | ![]() | ![]() | Out of each collection of interest (other than default interest), principal, and prepayment consideration received on the related Mortgage Loan. | ![]() | ![]() | Time to time |
Liquidation Fee / Special Servicer | ![]() | ![]() | With respect to any Specially Serviced Mortgage Loan for which the Special Servicer obtains a full or partial payment of any liquidation proceeds an amount calculated by application of a liquidation fee rate of 1.00% to the related payment or proceeds (exclusive of default interest) or, with respect to the Peter Cooper Village & Stuyvesant Town Loan, the lesser of (i) 0.50% of any whole or partial cash payments of liquidation proceeds received in respect thereof and (ii) $15,000,000. | ![]() | ![]() | Out of the full, partial or discounted payoff obtained from the related borrower and/or liquidation proceeds (exclusive of any portion of that payment or proceeds that represents a recovery of default interest) in respect of the related Specially Serviced Mortgage Loan or related REO Property, as the case may be.(6) | ![]() | ![]() | Time to time |
Additional Special Servicing Compensation / Special Servicer | ![]() | ![]() | All interest and investment income earned on amounts on deposit in the Special Servicer’s REO accounts. | ![]() | ![]() | Interest and investment income related to the subject accounts (net of investment losses). | ![]() | ![]() | Time to time |
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Type / Recipient(1)(2) | ![]() | ![]() | Amount | ![]() | ![]() | Source(3) | ![]() | ![]() | Frequency |
![]() | ![]() | Late payment charges and default interest actually collected with respect to any Mortgage Loan, but only to the extent such late payment charges and default interest (a) accrued with respect to that Mortgage Loan while it was specially serviced or after the related mortgaged property became an REO Property and (b) are not otherwise allocable to pay the following items with respect to the related Mortgage Loan or REO Property: (i) interest on advance, or (ii) Additional Trust Fund Expenses (exclusive of special servicing fees, liquidation fees and workout fees) currently payable or previously paid with respect to the related Mortgage Loan, Mortgaged Property or REO Property from collections on the mortgage pool and not previously reimbursed. | ![]() | ![]() | Late payment charges and default interest actually collected in respect of the underlying Mortgage Loans. | ![]() | ![]() | Time to time | |
Additional Servicing Compensation / Master Servicer and/or Special Servicer | ![]() | ![]() | All modification fees, assumption fees, defeasance fees and other application fees actually collected on the Mortgage Loans.(7) | ![]() | ![]() | Related payments made by borrowers with respect to the related Mortgage Loans. | ![]() | ![]() | Monthly |
Trustee Fee / Trustee | ![]() | ![]() | With respect to each Distribution Date, an amount equal to one-twelfth of the product of the annual Trustee Fee Rate(8) calculated on the outstanding principal amount of the pool of Mortgage Loans in the Trust Fund. | ![]() | ![]() | Out of general funds on deposit in the Distribution Account. | ![]() | ![]() | Monthly |
Additional Trustee Compensation / Trustee | ![]() | ![]() | All interest and investment income earned on amounts on deposit in the Distribution Account, the Interest Reserve Account, the Additional Interest Account and the Gain-On-Sale Reserve Account. | ![]() | ![]() | Interest and investment income related to the subject accounts (net of investment losses). | ![]() | ![]() | Monthly |
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Type / Recipient(1)(2) | ![]() | ![]() | Amount | ![]() | ![]() | Source(3) | ![]() | ![]() | Frequency |
Expenses | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||
Servicing Advances / Master Servicer, Special Servicer or Trustee | ![]() | ![]() | To the extent of funds available, the amount of any servicing advances. | ![]() | ![]() | First, from funds collected with respect to the related Mortgage Loan and then out of general funds on deposit in the Certificate Account, subject to certain limitations, and, under certain circumstances, from collections on the related Companion Loan. | ![]() | ![]() | Time to time |
Interest on Servicing Advances / Master Servicer, Special Servicer or Trustee | ![]() | ![]() | At a rate per annum equal to the Reimbursement Rate calculated on the number of days the related Advance remains unreimbursed. | ![]() | ![]() | First, out of default interest and late payment charges on the related Mortgage Loan and then, after or at the same time that advance is reimbursed, out of any other amounts then on deposit in the Master Servicer’s Certificate Account, and, under certain circumstances, from collections on the related Companion Loan. | ![]() | ![]() | Monthly |
P&I Advances / Master Servicer and Trustee | ![]() | ![]() | To the extent of funds available, the amount of any P&I Advances. | ![]() | ![]() | First, from funds collected with respect to the related Mortgage Loan and then out of general funds on deposit in the Certificate Account, subject to certain limitations. | ![]() | ![]() | Time to time |
Interest on P&I Advances / Master Servicer and Trustee | ![]() | ![]() | At a rate per annum equal to Reimbursement Rate. | ![]() | ![]() | First, out of default interest and late payment charges on the related Mortgage Loan and then, after or at the same time that advance is reimbursed, out of any other amounts then on deposit in the Master Servicer’s Certificate Account. | ![]() | ![]() | Monthly |
Indemnification Expenses / Depositor, Master Servicer, Special Servicer or Trustee and any director, officer, employee or agent of any of the foregoing parties | ![]() | ![]() | Amount to which such party is entitled for indemnification under the Pooling and Servicing Agreement. | ![]() | ![]() | Out of general funds on deposit in the Certificate Account, subject to certain limitations. | ![]() | ![]() | Time to time |
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(1) | The LB-UBS 2007-C1 Master Servicer and the LB-UBS 2007-C1 Special Servicer are generally entitled to payment of similar fees and expenses from the same sources of funds with respect to the State Street Financial Center Loan pursuant to the LB-UBS 2007-C1 Pooling and Servicing Agreement. See ‘‘—Servicing of the State Street Financial Center Loan’’ in this prospectus supplement. |
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(2) | If the Trustee succeeds to the position of Master Servicer, it will be entitled to receive the same fees and expenses of the Master Servicer described in this prospectus supplement. Any change to the fees and expenses described in this prospectus supplement would require an amendment to the Pooling and Servicing Agreement. See ‘‘DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS—Amendment’’ in the accompanying prospectus. |
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(3) | Unless otherwise specified, the fees and expenses shown in this table are paid (or retained by the Master Servicer or the Trustee in the case of amounts owed to any of them) prior to distributions on the Certificates. |
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(4) | The Master Servicing Fee for each Mortgage Loan will range, on a loan-by-loan basis, from 0.0200% per annum to 0.0700% per annum, as described in this ‘‘—Compensation and Payment of Expenses’’ section. |
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(5) | The Special Servicing Fee Rate for each Mortgage Loan will equal 0.25% per annum, as described in this ‘‘—Compensation and Payment of Expenses’’ section. |
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(6) | Circumstances as to when a Liquidation Fee is not payable are set forth in this ‘‘—Compensation and Payment of Expenses’’ section. |
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(7) | Allocable between the Master Servicer and the Special Servicer as provided in the Pooling and Servicing Agreement. |
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(8) | The Trustee Fee Rate will equal 0.00028% per annum, as described in this prospectus supplement under ‘‘DESCRIPTION OF THE CERTIFICATES—The Trustee’’. |
As compensation for its services, the Trustee will be entitled to receive monthly, from general funds on deposit in the Distribution Account, the Trustee Fee. The ‘‘Trustee Fee’’ for each Mortgage Loan and REO Mortgage Loan for any Distribution Date equals one month’s interest for the most recently ended calendar month (calculated on the basis of a 360-day year consisting of twelve 30-day months), accrued at the Trustee Fee Rate on the Stated Principal Balance of such Mortgage Loan or REO Mortgage Loan, as the case may be, outstanding immediately following the prior Distribution Date (or, in the case of the initial Distribution Date, as of the Closing Date).
The principal compensation to be paid to the Master Servicer in respect of its servicing activities is the Master Servicing Fee. The ‘‘Master Servicing Fee’’ is payable monthly on a loan-by-loan basis from amounts received in respect of interest on each Mortgage Loan and each Specially Serviced Mortgage Loan (and from revenue with respect to each REO Mortgage Loan), is calculated on the basis of a 360-day year consisting of twelve 30-day months, accrues at the related Master Servicing Fee Rate and is computed on the basis of the same principal amount respecting which any related interest payment due on the Mortgage Loan is computed. The ‘‘Master Servicing Fee Rate’’ is a per annum rate ranging from 0.0200% to 0.0700%. As of the Cut-Off Date the weighted average Master Servicing Fee Rate will be approximately 0.02105% per annum. The Master Servicer will not be entitled to receive a separate fee with respect to a Companion Loan unless such fee is expressly set forth in the related Intercreditor Agreement. Otherwise, all references in this section to ‘‘Mortgage Loans’’ will include the Companion Loans unless otherwise specified.
The State Street Financial Center Loan will be serviced by the LB-UBS 2007-C1 Master Servicer.
The principal compensation to be paid to the Special Servicer in respect of its special servicing activities is the Special Servicing Fee (together with the Master Servicing Fee, the ‘‘Servicing Fees’’) and, under the circumstances described in this prospectus supplement, Liquidation Fees and Workout Fees. The ‘‘Special Servicing Fee’’ is calculated on the basis of a 360-day year consisting of twelve 30-day months, accrues at a rate (the ‘‘Special Servicing Fee Rate’’) equal to 0.25% per annum, and is computed on the basis of the same principal amount respecting which any related interest payment due on such Specially Serviced Mortgage Loan or REO Mortgage Loan, as the case may be, is paid. However, earned Special Servicing Fees are payable out of general collections on the Mortgage Loans then on deposit in the Certificate Account. The Special Servicing Fee with respect to any Specially Serviced Mortgage Loan (or REO Mortgage Loan) will cease to accrue if such loan (or the related REO Property) is liquidated or if such loan becomes a Corrected Mortgage Loan.
The Special Servicer is entitled to a ‘‘Liquidation Fee’’ with respect to each Specially Serviced Mortgage Loan, which Liquidation Fee generally will be in an amount equal to 1.00% of all whole or partial cash payments of Liquidation Proceeds (as defined in the accompanying Prospectus) received in respect thereof or, with respect to the Peter Cooper Village & Stuyvesant Town Loan, the lesser of
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(i) 0.50% of any whole or partial cash payments of liquidation proceeds received in respect thereof and (ii) $15,000,000; provided, however, in no event shall the Liquidation Fee be payable to the extent a Workout Fee is payable concerning the related cash payments. However, no Liquidation Fee will be payable in connection with, or out of, insurance proceeds, condemnation proceeds or Liquidation Proceeds (as defined in the accompanying Prospectus) resulting from, the purchase of any Specially Serviced Mortgage Loan (i) by any Mortgage Loan Seller (as described in this prospectus supplement under ‘‘DESCRIPTION OF THE MORTGAGE POOL—Assignment of the Mortgage Loans; Repurchases and Substitutions’’ and ‘‘—Representations and Warranties; Repurchases and Substitutions’’) within the time period specified therein, (ii) by the Master Servicer, the Special Servicer, the Depositor or the Majority Subordinate Certificateholder as described in this prospectus supplement under ‘‘DESCRIPTION OF THE CERTIFICATES—Termination’’ or (iii) in certain other limited circumstances.
The Special Servicer also is entitled to a ‘‘Workout Fee’’ with respect to each Corrected Mortgage Loan, which is generally equal to 1.00% of all payments of interest and principal received on such Mortgage Loan for so long as it remains a Corrected Mortgage Loan or, with respect to the Peter Cooper Village & Stuyvesant Town Loan, the lesser of (i) 0.50% of all payments of interest and principal received on such mortgage loan for so long as it remains a corrected mortgage loan, and (ii) $15,000,000. If the Special Servicer is terminated or resigns, it will retain the right to receive any and all Workout Fees payable with respect to any Mortgage Loan that became a Corrected Mortgage Loan during the period that it acted as Special Servicer and remained a Corrected Mortgage Loan at the time of its termination or resignation or if the Special Servicer resolved the circumstances and/or conditions (including by way of a modification of the related Mortgage Loan documents) causing the Mortgage Loan to be a Specially Serviced Mortgage Loan, but the Mortgage Loan had not as of the time the Special Servicer is terminated or resigns become a Corrected Mortgage Loan because the related borrower had not made three consecutive monthly debt service payments and subsequently becomes a Corrected Mortgage Loan as a result of making such three consecutive payments. The successor Special Servicer will not be entitled to any portion of those Workout Fees.
If a borrower prepays a Mortgage Loan on a date that is prior to its Due Date in any Collection Period, the amount of interest (net of related Master Servicing Fees and, if applicable, Additional Interest) that accrues on the Mortgage Loan during such Collection Period will be less (such shortfall, a ‘‘Prepayment Interest Shortfall’’) than the amount of interest (net of related Master Servicing Fees and, if applicable, Additional Interest and without regard to any Prepayment Premium or Yield Maintenance Charge actually collected) that would have accrued on the Mortgage Loan through its Due Date. If such a principal prepayment occurs during any Collection Period after the Due Date for such Mortgage Loan in such Collection Period, the amount of interest (net of related Master Servicing Fees) that accrues and is collected on the Mortgage Loans during such Collection Period will exceed (such excess, a ‘‘Prepayment Interest Excess’’) the amount of interest (net of related Master Servicing Fees, and without regard to any Prepayment Premium or Yield Maintenance Charge actually collected) that would have been collected on the Mortgage Loan during such Collection Period if the borrower had not prepaid. Any Prepayment Interest Excesses collected will be paid to the Master Servicer as additional servicing compensation. However, with respect to each Distribution Date, the Master Servicer is required to deposit into the Certificate Account (such deposit, a ‘‘Compensating Interest Payment’’), without any right of reimbursement therefor, with respect to each Mortgage Loan (other than a Specially Serviced Mortgage Loan and other than any Mortgage Loan on which the Special Servicer has waived a prepayment restriction and other than any Companion Loan) that was subject to a voluntary principal prepayment during the most recently ended Collection Period creating a Prepayment Interest Shortfall, an amount equal to the lesser of (i) the sum of (a) the Master Servicing Fee (up to a Master Servicing Fee Rate of 0.01% per annum) received by the Master Servicer during such Collection Period on such Mortgage Loan and (b) investment income earned by the Master Servicer on the related principal prepayment during the most recently ended Collection Period, and (ii) the amount of the related Prepayment Interest Shortfall; provided, however, to the extent any such Prepayment Interest Shortfall is the result of the Master Servicer’s failure to enforce the applicable Mortgage Loan documents, the amount in clause (a) shall include the entire Master Servicing Fee on the applicable Mortgage Loan for such Collection Period. Compensating Interest Payments will not cover shortfalls in Mortgage Loan interest accruals that result from any liquidation of
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a defaulted Mortgage Loan, or of any REO Property acquired in respect thereof, that occurs during a Collection Period prior to the related Due Date therein or involuntary prepayments.
As additional servicing compensation, the Master Servicer and/or the Special Servicer is entitled to retain all modification fees, assumption fees, defeasance fees, assumption and other application fees, late payment charges and default interest (to the extent not used to offset interest on Advances, Additional Trust Fund Expenses (other than Special Servicing Fees, Workout Fees and/or Liquidation Fees) and the cost of property inspections as provided in the Pooling and Servicing Agreement and to the extent not otherwise allocated to the Companion Loan in accordance with the related Intercreditor Agreement) and Prepayment Interest Excesses collected from borrowers on Mortgage Loans. In addition, to the extent the Master Servicer or the Special Servicer receives late payment charges or default interest on a Mortgage Loan for which interest on Advances or Additional Trust Fund Expenses (other than Special Servicing Fees, Workout Fees and/or Liquidation Fees) related to such Mortgage Loan has been paid and not previously reimbursed to the Trust Fund, such late payment charges or default interest will be used to reimburse the Trust Fund for such payment of interest or Additional Trust Fund Expenses. In addition, each of the Master Servicer and the Special Servicer is authorized to invest or direct the investment of funds held in those accounts maintained by it that relate to the Mortgage Loans or REO Properties, as the case may be, in certain short-term United States government securities and certain other permitted investment grade obligations, and the Master Servicer and the Special Servicer each will be entitled to retain any interest or other income earned on such funds held in those accounts maintained by it, but shall be required to cover any losses on investments of funds held in those accounts maintained by it, from its own funds without any right to reimbursement, except in certain limited circumstances described in the Pooling and Servicing Agreement.
Each of the Master Servicer and Special Servicer is, in general, required to pay all ordinary expenses incurred by it in connection with its servicing activities under the Pooling and Servicing Agreement, including the fees and any additional servicing compensation of any sub-servicers retained by it, and is not entitled to reimbursement therefor except as expressly provided in the Pooling and Servicing Agreement. However, each of the Master Servicer and Special Servicer is permitted to pay certain of such expenses (including certain expenses incurred as a result of a Mortgage Loan default) directly out of the Certificate Account and at times without regard to the Mortgage Loan with respect to which such expenses were incurred. See ‘‘DESCRIPTION OF THE CERTIFICATES—Distributions’’ in this prospectus supplement and ‘‘DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS—Certificate Account’’ and ‘‘—Servicing Compensation and Payment of Expenses’’ in the accompanying prospectus.
As and to the extent described in this prospectus supplement under ‘‘DESCRIPTION OF THE CERTIFICATES—P&I Advances’’, each of the Master Servicer and the Trustee is entitled to receive interest, at the Reimbursement Rate, on any reimbursable servicing expenses incurred by it. Such interest will compound annually and will be paid, contemporaneously with the reimbursement of the related servicing expense, first out of late payment charges and default interest received on the related Mortgage Loan during the Collection Period in which such reimbursement is made and then from general collections on the Mortgage Loans then on deposit in the Certificate Account. In addition, to the extent the Master Servicer receives late payment charges or default interest on a Mortgage Loan for which interest on servicing expenses related to such Mortgage Loan has been paid from general collections on deposit in the Certificate Account and not previously reimbursed, such late payment charges or default interest will be used to reimburse the Trust Fund for such payment of interest.
Modifications, Waivers and Amendments
The Pooling and Servicing Agreement permits the Special Servicer (subject, with respect to the Co-Lender Loans, to certain rights of the holder of any related Companion Loan and subject to the Master Servicer’s right to approve certain transfers of the equity interests in the related borrowers and waivers regarding due-on-sale and due-on-encumbrance provisions for certain Mortgage Loans as described below) to modify, waive or amend any term of any Mortgage Loan (other than the State Street Financial Center Loan) if (a) it determines, in accordance with the Servicing Standard, that it is appropriate to do so and the Special Servicer determines that such modification, waiver or amendment is not ‘‘significant’’ within the meaning of Treasury Regulations Section 1.860G-2(b), and (b) except as
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described in the following paragraph, such modification, waiver or amendment, will not (i) affect the amount or timing of any related payments of principal, interest or other amount (including Prepayment Premiums and Yield Maintenance Charges) payable under the Mortgage Loan, (ii) affect the obligation of the related borrower to pay a Prepayment Premium or Yield Maintenance Charge or permit a principal prepayment during the applicable Lockout Period, (iii) except as expressly provided by the related Mortgage or in connection with a material adverse environmental condition at the related Mortgaged Property, result in a release of the lien of the related Mortgage on any material portion of such Mortgaged Property without a corresponding principal prepayment in an amount not less than the fair market value of the property released, (iv) if such Mortgage Loan is equal to or in excess of 5% of the then aggregate current principal balances of all Mortgage Loans or $35,000,000, or is one of the ten largest Mortgage Loans by Stated Principal Balance as of such date, permit the transfer of (A) the related Mortgaged Property or any interest therein or (B) equity interests in the related borrower or an equity owner of the borrower that would result, in the aggregate during the term of the related Mortgage Loan, in a transfer greater than 49% of the total interest in the borrower and/or any equity owner of the borrower or a transfer of voting control in the borrower or an equity owner of the borrower without the prior written confirmation from each Rating Agency (as applicable) that such change will not result in the qualification, downgrade or withdrawal of the ratings then assigned to the Certificates, (v) allow any additional lien on the related Mortgaged Property if such Mortgage Loan is equal to or in excess of 2% of the then aggregate current principal balances of the Mortgage Loans or $20,000,000, is one of the ten largest Mortgage Loans by Stated Principal Balance as of such date, or with respect to S&P only, has an aggregate LTV that is equal to or greater than 85% or has an aggregate DSCR that is less than 1.20x, without the prior written confirmation from each Rating Agency (as applicable) that such change will not result in the qualification, downgrade or withdrawal of the ratings then assigned to the Certificates, or (vi) in the good faith, reasonable judgment of the Special Servicer, materially impair the security for the Mortgage Loan or reduce the likelihood of timely payment of amounts due thereon. As provided in the Pooling and Servicing Agreement, the Master Servicer may approve certain transfers of the equity interests in the related borrowers and waivers regarding due-on-sale or due-on-encumbrance provisions relating to Mortgage Loans with tenants-in-common borrowing entities, subject to the Servicing Standard, the related Mortgage Loan documents and certain limiting conditions as set forth in the Pooling and Servicing Agreement, including Rating Agency approval of any such waivers for Mortgage Loans with certain outstanding Stated Principal Balances and that meet certain other financial thresholds.
Notwithstanding clause (b) of the preceding paragraph and, with respect to the Co-Lender Loans (other than the State Street Financial Center Loan), subject to certain rights of the holders of any related Companion Loan, the Special Servicer may (i) reduce the amounts owing under any Specially Serviced Mortgage Loan by forgiving principal, accrued interest and/or any Prepayment Premium or Yield Maintenance Charge, (ii) reduce the amount of the Periodic Payment on any Specially Serviced Mortgage Loan, including by way of a reduction in the related Mortgage Rate, (iii) forbear in the enforcement of any right granted under any Mortgage Note or Mortgage relating to a Specially Serviced Mortgage Loan, (iv) extend the maturity date of any Specially Serviced Mortgage Loan (and the Master Servicer may extend the maturity date of Mortgage Loans with an original maturity of five years or less with Controlling Class approval for up to two six-month extensions), and/or (v) accept a principal prepayment during any Lockout Period; provided that (x) the related borrower is in default with respect to the Specially Serviced Mortgage Loan or, in the reasonable, good faith judgment of the Special Servicer, such default by the borrower is reasonably foreseeable, (y) in the reasonable, good faith judgment of the Special Servicer, such modification would increase the recovery to Certificateholders (and any of the holders of the Companion Loans, taken as a collective whole, as applicable) on a net present value basis determined in accordance with the Servicing Standard and (z) such modification, waiver or amendment does not result in a tax being imposed on the Trust Fund or cause any REMIC relating to the assets of the Trust Fund to fail to qualify as a REMIC at any time the Certificates are outstanding. In no event, however, is the Special Servicer permitted to (i) extend the maturity date of a Mortgage Loan beyond a date that is two years prior to the Rated Final Distribution Date, (ii) reduce the Mortgage Rate of a Mortgage Loan to less than the lesser of (a) the original Mortgage Rate of such Mortgage Loan, (b) the highest Pass-Through Rate of any Class of Certificates (other than any Class X-P, Class X-C or Class X-W Certificates) then outstanding, or (c) a rate below the then prevailing interest rate for comparable loans,
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as determined by the Special Servicer, (iii) if the Mortgage Loan is secured by a ground lease (and not also by the corresponding fee simple interest), extend the maturity date of such Mortgage Loan beyond a date which is 20 years prior to the expiration of the term of such ground lease or (iv) defer interest due on any Mortgage Loan in excess of 10% of the Stated Principal Balance of such Mortgage Loan or defer the collection of interest on any Mortgage Loan without accruing interest on such deferred interest at a rate at least equal to the Mortgage Rate of such Mortgage Loan. The Special Servicer will have the ability, subject to the Servicing Standard described under ‘‘—General’’ above, to modify Mortgage Loans with respect to which default is reasonably foreseeable, but which are not yet in default.
The Special Servicer is required to notify the Trustee, the Master Servicer, the Controlling Class Representative and the Rating Agencies and, with respect to the Co-Lender Loans (other than the State Street Financial Center Loan), subject to certain rights of the holders of the related Companion Loans, of any material modification, waiver or amendment of any term of any Specially Serviced Mortgage Loan, and to deliver to the Trustee or the related Custodian (with a copy to the Master Servicer), for deposit in the related Mortgage File, an original counterpart of the agreement related to such modification, waiver or amendment, promptly (and in any event within ten business days) following the execution thereof. Copies of each agreement whereby any such modification, waiver or amendment of any term of any Specially Serviced Mortgage Loan is effected are required to be available for review during normal business hours at the offices of the Special Servicer. See ‘‘DESCRIPTION OF THE CERTIFICATES—Reports to Certificateholders; Available Information’’ in this prospectus supplement.
For any Mortgage Loan other than a Specially Serviced Mortgage Loan and/or the State Street Financial Center Loan, and subject to the rights of the Special Servicer, and, with respect to the Co-Lender Loans, subject to certain rights of the holders of the related Companion Loans, the Master Servicer is responsible for any request by a borrower for the consent to modify, waive or amend certain terms as specified in the Pooling and Servicing Agreement, including, without limitation, (i) approving certain leasing activities subject to certain thresholds as more particularly set forth in the Pooling and Servicing Agreement, (ii) approving certain substitute property managers, (iii) approving certain waivers regarding the timing or need to audit certain financial statements, (iv) approving certain modifications in connection with a defeasance permitted by the terms of the applicable Mortgage Loan documents and (v) approving certain consents with respect to non-material rights-of-way and easements and consents to subordination of the related Mortgage Loan to such non-material easements or rights-of-way as more specifically set forth in the Pooling and Servicing Agreement.
Generally, any modification, extension, waiver or amendment of the payment terms of a Co-Lender Loan will be required to be structured so as to be consistent with the allocation and payment priorities in the related Mortgage Loan documents and the related Intercreditor Agreement, such that neither the Trust Fund as holder of the Co-Lender Loan, nor the holder(s) of the related Companion Loans gain a priority over the other such holder that is not reflected in the related Mortgage Loan documents and the related Intercreditor Agreement.
The Controlling Class Representative
Subject to the succeeding paragraphs, and other than with respect to the State Street Financial Center Loan, the Controlling Class Representative is entitled to advise the Special Servicer with respect to the following actions of the Special Servicer, and the Special Servicer is not permitted to take any of the following actions as to which the Controlling Class Representative has objected in writing within ten business days of being notified thereof (provided that if such written objection has not been received by the Special Servicer within such ten business day period, then the Controlling Class Representative’s approval will be deemed to have been given):
(i) any actual or proposed foreclosure upon or comparable conversion (which may include acquisitions of an REO Property) of the ownership of properties securing such of the Specially Serviced Mortgage Loans as come into and continue in default;
(ii) any modification or waiver of any term of the related Mortgage Loan documents of a Mortgage Loan that relates to the Maturity Date, Mortgage Rate, principal balance, amortization term, payment frequency or any provision requiring the payment of a Prepayment Premium or Yield
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Maintenance Charge (other than a modification consisting of the extension of the maturity date of a Mortgage Loan for one year or less) or a material non-monetary term;
(iii) any actual or proposed sale of an REO Property (other than in connection with the termination of the Trust Fund as described under ‘‘DESCRIPTION OF THE CERTIFICATES— Termination’’ in this prospectus supplement or pursuant to a Purchase Option as described below under ‘‘—Defaulted Mortgage Loans; REO Properties; Purchase Option’’);
(iv) any determination to bring an REO Property into compliance with applicable environmental laws or to otherwise address hazardous materials located at an REO Property;
(v) any acceptance of substitute or additional collateral or release of material collateral for a Mortgage Loan unless required by the underlying Mortgage Loan documents;
(vi) any waiver of a ‘‘due-on-sale’’ or ‘‘due-on-encumbrance’’ clause;
(vii) any release of any performance or ‘‘earn-out’’ reserves, escrows or letters of credit;
(viii) any acceptance of an assumption agreement releasing a borrower from liability under a Mortgage Loan (other than in connection with a defeasance permitted under the terms of the applicable Mortgage Loan documents);
(ix) any termination of, or modification of, any applicable franchise agreements related to a Mortgage Loan secured by a hotel;
(x) any termination of the related property manager for Mortgage Loans having an outstanding principal balance of greater than $5,000,000;
(xi) any determination to allow a borrower not to maintain terrorism or, to the extent provided in the Pooling and Servicing Agreement, windstorm insurance; and
(xii) any determination to decrease the time period referenced in clause (g) of the definition of Servicing Transfer Event.
In addition, the Controlling Class Representative may direct the Special Servicer to take, or to refrain from taking, such other actions as the Controlling Class Representative may deem advisable or as to which provision is otherwise made in the Pooling and Servicing Agreement; provided that no such direction and no objection contemplated by the prior paragraph may (i) require or cause the Special Servicer to violate any REMIC provisions, any provision of the Pooling and Servicing Agreement or applicable law, including the Special Servicer’s obligation to act in accordance with the Servicing Standard, or (ii) expose the Master Servicer, the Special Servicer, the Trust Fund or the Trustee to liability, or materially expand the scope of the Special Servicer or its responsibilities under the Pooling and Servicing Agreement or cause the Special Servicer to act or fail to act in a manner which, in the reasonable judgment of the Special Servicer, is not in the best interests of the Certificateholders. Cadim TACH inc. or an affiliate, will be the initial Controlling Class Representative.
Pursuant to the LB-UBS 2007-C1 Pooling and Servicing Agreement and the State Street Financial Center Intercreditor Agreement, with respect to the State Street Financial Center Loan, the Controlling Class Representative will have certain consultation rights it exercises with the controlling class representative under the LB-UBS 2007-C1 Pooling and Servicing Agreement (the ‘‘LB-UBS 2007-C1 Controlling Class Representative’’) in connection with the rights given to the LB-UBS 2007-C1 Controlling Class Representative under the LB-UBS 2007-C1 Pooling and Servicing Agreement to direct the LB-UBS 2007-C1 Master Servicer and/or LB-UBS 2007-C1 Special Servicer with respect to the servicing of the State Street Financial Center Loan and the related Pari Passu Companion Loan. Anthracite Capital, Inc. is the LB-UBS 2007-C1 Controlling Class Representative. In general, in the event that the LB-UBS 2007-C1 Controlling Class Representative is required to give its consent or advice or otherwise take any action with respect to the State Street Financial Center Loan, the LB-UBS 2007-C1 Controlling Class Representative will generally be required to confer with the Controlling Class Representative regarding such advice or consent. In the event that the LB-UBS 2007-C1 Controlling Class Representative and the Controlling Class Representative disagree with respect to such advice, consent or action, the State Street Financial Center Intercreditor Agreement and the LB-UBS 2007-C1
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Pooling and Servicing Agreement provide that the decision of the LB-UBS 2007-C1 Controlling Class Representative will control in the event such disagreement is not resolved within 10 Business Days.
Notwithstanding the foregoing, provided no One Congress Street Control Appraisal Period is in effect under the One Congress Street Intercreditor Agreement, the holder of the One Congress Street Subordinate Companion Loan will have the right to consult with and/or consent to certain actions of the Master Servicer and/or the Special Servicer with respect to the One Congress Street Whole Loan and the Controlling Class, and the Controlling Class Representative, will not have the consent and advice rights otherwise described in this prospectus supplement; provided, however, the Controlling Class Representative will be entitled to discuss (without any consent right) any of the actions described below with the applicable Special Servicer. Generally, provided no One Congress Street Control Appraisal Period is in effect under the One Congress Street Intercreditor Agreement, the holder of the One Congress Street Subordinate Companion Loan or its designee will be entitled to exercise rights and powers with respect to the One Congress Street Whole Loan that are the same as or similar to those of the Controlling Class Representative otherwise described above and must be notified of, and give its prior written approval to (and will be entitled to advise with respect to) the following additional actions in accordance with the One Congress Street Intercreditor Agreement: (A) any acceptance of a discounted payoff with respect to the One Congress Street Loan or the One Congress Street Subordinate Companion Loan; (B) any renewal or replacement of the then existing insurance policies to the extent that the renewal or replacement policy does not comply with the terms of the related Mortgage Loan documents or any material waiver, modification or amendment of any material insurance requirements under the related Mortgage Loan documents (in each case if the mortgagee’s approval or determination is required by the related Mortgage Loan documents); (C) any modification, execution, termination or renewal of any material lease (to the extent mortgagee’s approval is required by the related Mortgage Loan documents), including any master lease of the parking garage portion of the related mortgaged property; (D) the voting of any plan or reorganization, restructuring or similar plan in the bankruptcy of the related borrower; (E) any renewal or replacement of the then-existing insurance policies (to the extent the mortgagee’s approval is required under the related Mortgage Loan documents); (F) any incurrence of additional debt by the related borrower or any mezzanine financing by any beneficial owner of the related borrower; (G) any release of the related borrower or any guarantor of any of the obligations of the borrower from liability; (H) any transfer of the related Mortgaged Property or any portion thereof or any transfer of any direct or indirect ownership interest in the related borrower or any consent to an assignment and assumption of the related One Congress Street Whole Loan pursuant to the related Mortgage Loan documents; (I) any exercise of any right of mortgagee under the related Mortgage Loan documents to terminate a property management agreement for the related Mortgaged Property or any approval rights with respect to any change of the property manager for the related Mortgaged Property; (J) any material reduction or material waiver of the related borrower’s obligations to pay any reserve amounts under the related Mortgage Loan documents (except for reductions that occur according to the express terms of the related Mortgage Loan documents); (K) the settlement of any insurance claim or condemnation proceeding for a cash payment that will be applied to the principal amount of the One Congress Street Whole Loan, if such settlement would result in a shortfall of amounts due and payable to the holder of the One Congress Street Subordinate Companion Loan; (L) following the occurrence of an event of default under the One Congress Street Whole Loan, any initiation of any proceedings, judicial or otherwise, under the related Mortgage Loan documents not otherwise described or referred to above; (M) the release to the borrower of any escrow for which the borrower is not entitled expressly entitled to under the loan documents or under applicable law, (N) the approval of significant repair or renovation projects or tenant build-out work or reimbursement to tenant therefor (other than in connection with a casualty or condemnation event) that are intended to be funded through the disbursement of any funds from any reserve accounts established in accordance with the related Mortgaged Loan documents (to the extent the mortgagee’s consent is required by the related Mortgaged Loan documents), (O) any determination that one or more specified leasing achievement release criteria have been satisfied for purposes of releases from the leasing achievement reserve established under the One Congress Street Whole Loan and any determination that certain release criteria have been satisfied for purposes of releases from the debt service reserve established under the One Congress Street Whole Loan; (P) the approval or adoption of any budget for, or any material alteration to, the related mortgaged property (if the mortgagee’s approval is required by
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the related Mortgaged Loan documents and, if so, notwithstanding anything to the contrary set forth herein, subject to the same standard of approval as is set forth in the applicable related Mortgaged Loan documents); and (Q) the designation of any replacement Special Servicer for the One Congress Street Whole Loan or the appointment or removal of any sub-servicer for the One Congress Street Whole Loan (other than in connection with the Trustee becoming the successor thereto pursuant to the terms of the Pooling and Servicing Agreement).
Notwithstanding the foregoing, provided no Tyco International Building Control Appraisal Period is in effect under the Tyco International Building Intercreditor Agreement, the holder of the Tyco International Building Subordinate Companion Loan will have the right to advise on and/or consent to certain actions of the Master Servicer and/or the Special Servicer with respect to the Tyco International Building Whole Loan and the Controlling Class, and the Controlling Class Representative, will not have the consent and advice rights described in this prospectus supplement; provided, however, the Controlling Class Representative will be entitled to discuss (without any consent right) any of the following actions with the Special Servicer. Generally, the holder of the Tyco International Building Subordinate Companion Loan will be entitled to rights including that (i) the Special Servicer and/or the Master Servicer will be required to consult with the holder of the Tyco International Building Subordinate Companion Loan or its designee in connection with any adoption or implementation of a business plan submitted by the related borrower with respect to the related Mortgaged Property, the execution or renewal of any lease, the release of any escrow held in conjunction with the Tyco International Building Whole Loan to the borrower not expressly required by the terms of the Mortgage Loan documents or under applicable law, alterations on the related Mortgaged Property if approval by the mortgagee is required by the related Mortgage Loan documents, material change in any ancillary Mortgage Loan documents or the waiver of any notice provisions related to prepayment; and (ii) the holder of the Tyco International Building Subordinate Companion Loan or its designee will be entitled to exercise rights and powers with respect to the Tyco International Building Whole Loan that are the same as or similar to those of the Controlling Class Representative described above and must be notified of, and give its prior written approval to the following additional actions in accordance with the Tyco International Building Intercreditor Agreement: (A) any modification of, or waiver with respect to, the Tyco International Building Whole Loan that would result in the extension of the maturity date or extended maturity date thereof, a reduction in the interest rate borne thereby or the monthly debt service payment, prepayment premium or extension fee payable thereon or a deferral or a forgiveness of interest on or principal of the Tyco International Building Whole Loan or a modification or waiver of any other monetary term of the Tyco International Building Whole Loan relating to the timing or amount of any payment of principal or interest (other than default interest) or any other material sums due and payable under the related Mortgage Loan documents or a modification or waiver of any provision of the Tyco International Building Whole Loan which restricts the borrower or its equity owners from incurring additional indebtedness; (B) any modification of, or waiver with respect to, the Tyco International Building Whole Loan that would result in a discounted pay-off of the Tyco International Building Whole Loan; (C) any foreclosure upon or comparable conversion of the ownership of the related Mortgaged Property or any acquisition of the related Mortgaged Property by deed-in-lieu of foreclosure; (D) any sale of the related Mortgaged Property or any material portion thereof (other than pursuant to a purchase option contained in the Tyco International Building Intercreditor Agreement or in the Pooling and Servicing Agreement) or, except, as specifically permitted in the related Mortgage Loan documents, the transfer of any direct or indirect interest in the borrower or any sale of the Tyco International Building Whole Loan; (E) any action to bring the related Mortgaged Property or REO Property into compliance with any laws relating to hazardous materials; (F) any substitution or release of collateral for the Tyco International Building Whole Loan (other than in accordance with the terms of, or upon satisfaction of, the Tyco International Building Whole Loan); (G) any release of the borrower or any guarantor from liability with respect to the Tyco International Building Whole Loan; (H) any waiver of or determination not to enforce a ‘‘due-on-sale’’ or ‘‘due-on-encumbrance’’ clause (unless such clause is not exercisable under applicable law or such exercise is reasonably likely to result in successful legal action by the borrower); (I) any material changes to or waivers of any of the insurance requirements under the related Mortgage Loan documents; (J) the voting on any plan of reorganization, restructuring or similar plan in the bankruptcy of the borrowers.
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Further, notwithstanding the foregoing, provided no Morgan Apartments Control Appraisal Period is in effect under the Morgan Apartments Intercreditor Agreement, the holder of the Morgan Apartments Companion Loan will have the right to direct and/or consent to certain actions of the Master Servicer and/or the Special Servicer with respect to the Morgan Apartments Whole Loan and the Controlling Class, and the Controlling Class Representative, will not have the consent and advice rights described in this prospectus supplement; provided, however, the Controlling Class Representative will be entitled to discuss (without any consent or direction right) any of the following actions with the Special Servicer. Generally, the holder of the Morgan Apartments Companion Loan will be entitled to such rights. These rights include that (i) the Special Servicer and/or the Master Servicer will be required to consult with the holder of the Morgan Apartments Companion Loan or its designee in connection with any adoption or implementation of a business plan submitted by the borrower with respect to the related Mortgaged Property, the execution or renewal of any lease, the release of any escrow held in conjunction with the Morgan Apartments Whole Loan to the borrower not expressly required by the terms of the related Mortgage Loan documents or under applicable law, alterations on the related Mortgaged Property if approval by the mortgagee is required by the related Mortgage Loan documents, material change in any ancillary Mortgage Loan documents or the waiver of any notice provisions related to prepayment; and (ii) the holder of the Morgan Apartments, prepay next premium Companion Loan or its designee will be entitled to exercise rights and powers with respect to the Morgan Apartments Whole Loan that are the same as or similar to those of the Controlling Class Representative described above and must be notified of, and give its prior written approval to the following additional actions in accordance with the Morgan Apartments Intercreditor Agreement: (A) any modification of, or waiver with respect to, the Morgan Apartments Whole Loan that would result in the extension of the maturity date or extended maturity date thereof, a reduction in the interest rate borne thereby or the monthly debt service payment, prepayment premium or extension fee payable thereon or a deferral or a forgiveness of interest on or principal of the Morgan Apartments Whole Loan or a modification or waiver of any other monetary term of the Morgan Apartments Whole Loan relating to the timing or amount of any payment of principal or interest (other than default interest) or any other material sums due and payable under the Mortgage Loan documents or a modification or waiver of any provision of the Morgan Apartments Whole Loan which restricts the borrower or its equity owners from incurring additional indebtedness; (B) any modification of, or waiver with respect to, the Morgan Apartments Whole Loan that would result in a discounted pay-off of the Morgan Apartments Whole Loan; (C) any foreclosure upon or comparable conversion of the ownership of the related Mortgaged Property or any acquisition of the related Mortgaged Property by deed-in-lieu of foreclosure; (D) any sale of the related Mortgaged Property or any material portion thereof (other than pursuant to a purchase option contained in the Morgan Apartments Intercreditor Agreement or in the Pooling and Servicing Agreement) or, except, as specifically permitted in the related Mortgage Loan documents, the transfer of any direct or indirect interest in the borrower or any sale of the Morgan Apartments Whole Loan (other than pursuant to a purchase option contained in the Morgan Apartments Intercreditor Agreement or in the Pooling and Servicing Agreement); (E) any action to bring the Mortgaged Property or REO Property into compliance with any laws relating to hazardous materials; (F) any substitution or release of collateral for the Morgan Apartments Whole Loan (other than in accordance with the terms of, or upon satisfaction of, the Morgan Apartments Whole Loan); (G) any release of the borrower or any guarantor from liability with respect to the Morgan Apartments Whole Loan; (H) any waiver of or determination not to enforce a ‘‘due-on-sale’’ or ‘‘due-on-encumbrance’’ clause (unless such clause is not exercisable under applicable law or such exercise is reasonably likely to result in successful legal action by the borrower); (I) any material changes to or waivers of any of the insurance requirements; and (J) any incurrence of additional debt by the borrower to the extent such incurrence requires the consent of the mortgagee under the related Mortgage Loan documents.
Further, notwithstanding the foregoing, the holder of the Five Times Square Subordinate Companion Loan will have the right to direct and/or consent to certain actions of the Master Servicer and/or the Special Servicer with respect to the Five Times Square Whole Loan and the Controlling Class, and the Controlling Class Representative will not have the consent and advice rights described in this prospectus supplement. Generally, the holder of the Five Times Square Subordinate Companion Loan will be entitled to such rights. These rights include that (i) so long as a Five Times Square Control Appraisal Period does not exist, the Special Servicer and/or the Master Servicer will be required to consult with the
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holder of such Five Times Square Subordinate Companion Loan or its designee in connection with (A) any adoption or implementation of a business plan submitted by the borrower with respect to the related Mortgaged Property; (B) the execution or renewal of any lease (if a mortgagee’s approval is provided for in the applicable Mortgage Loan documents); (C) the release of any escrow held in conjunction with the Five Times Square Whole Loan to the borrower not expressly required by the terms of the related Mortgage Loan documents or under applicable law; (D) alterations on the related Mortgaged Property if approval by the mortgagee is required by the related Mortgage Loan documents; (E) material change in any ancillary Mortgage Loan documents; or (F) the waiver of any notice provisions related to prepayment; and (ii) the holder of the Five Times Square Subordinate Companion Loan or its designee will be entitled to exercise rights and powers with respect to the Five Times Square Whole Loan that are the same as or similar to those of the Controlling Class Representative described above and must be notified of, and give its prior written approval to the following additional actions: (A) any modification of, or waiver with respect to, the Five Times Square Whole Loan that would result in the extension of the maturity date or extended maturity date thereof, a reduction in the interest rate borne thereby or the monthly debt service payment or Prepayment Premium payable thereon or a deferral or a forgiveness of interest on or principal of the Five Times Square Whole Loan or a modification or waiver of any other monetary term of the Five Times Square Whole Loan relating to the timing or amount of any payment of principal or interest (other than default interest) or any other material sums due and payable under the related Mortgage Loan documents or a modification or waiver of any provision of the Five Times Square Whole Loan which restricts the related borrower or its equity owners from incurring additional indebtedness; (B) any modification of, or waiver with respect to, the Five Times Square Whole Loan that would result in a discounted pay off of the Five Times Square Whole Loan; (C) any foreclosure upon or comparable conversion of the ownership of the Mortgaged Property or any acquisition of the related Mortgaged Property by deed in lieu of foreclosure; (D) any sale of the Five Times Square Whole Loan or the related Mortgaged Property or any material portion thereof (other than pursuant to a purchase option contained herein or in the Pooling and Servicing Agreement) or, except as specifically permitted in the related Mortgage Loan documents, the transfer of any direct or indirect interest in the borrower; (E) any action to bring the related Mortgaged Property or related REO Property into compliance with any laws relating to hazardous materials; (F) any substitution or release of collateral for the Five Times Square Whole Loan (other than in accordance with the terms of, or upon satisfaction of, the Five Times Square Whole Loan); (G) any release of the related borrower or any guarantor from liability with respect to the Five Times Square Whole Loan; (H) any waiver of or determination not to enforce a ‘‘due-on-sale’’ or ‘‘due-on-encumbrance’’ clause (unless such clause is not exercisable under applicable law or such exercise is reasonably likely to result in successful legal action by the borrower); (I) any material changes to or waivers of any of the insurance requirements set forth in the related Mortgage Loan documents; and (J) any incurrence of additional debt by the related borrower to the extent such incurrence requires the consent of the mortgagee under the related Mortgage Loan documents.
Further, pursuant to the Five Times Square Intercreditor Agreement, with respect to the Five Times Square Loan, the Controlling Class Representative will generally share with the controlling class representative with respect to the Five Times Square Pari Passu Companion Loan the rights with respect to the servicing of the Five Times Square Loan and the Five Times Square Pari Passu Companion Loan. In general, in the event that the Controlling Class Representative is required to give its consent or advice or otherwise take any action with respect to the Five Times Square Loan, the Controlling Class Representative will generally be required to confer with the controlling class representative with respect to the Five Times Square Pari Passu Companion Loan regarding such advice or consent. In the event that the Controlling Class Representative and the controlling class representative with respect to the Five Times Square Pari Passu Companion Loan disagree with respect to such advice, consent or action, the Five Times Square Intercreditor Agreement provides that the Controlling Class Representative and the controlling class representative with respect to the Five Times Square Pari Passu Companion Loan will contract with a third party designated under the Five Times Square Intercreditor Agreement to resolve such disagreement and the decision of such third party will be binding upon the Controlling Class Representative and the controlling class representative with respect to the Five Times Square Pari Passu Companion Loan in accordance with the Five Times Square Intercreditor Agreement.
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Notwithstanding the foregoing, provided no PNC Corporate Plaza Control Appraisal Period is in effect under the PNC Corporate Plaza Intercreditor Agreement, the holder of the PNC Corporate Plaza Subordinate Companion Loan will have the right to advise on and/or consent to certain actions of the Master Servicer and/or the Special Servicer with respect to the PNC Corporate Plaza Whole Loan and the Controlling Class, and the Controlling Class Representative, will not have the consent and advice rights described in this prospectus supplement; provided, however, the Controlling Class Representative will be entitled to discuss (without any consent right) any of the following actions with the Special Servicer. Generally, the holder of the PNC Corporate Plaza Subordinate Companion Loan will be entitled to rights including that (i) the Special Servicer and/or the Master Servicer will be required to consult with the holder of the PNC Corporate Plaza Subordinate Companion Loan or its designee in connection with any adoption or implementation of a business plan submitted by the borrower with respect to the related Mortgaged Property, the execution or renewal of any lease, the release of any escrow held in conjunction with the PNC Corporate Plaza Whole Loan to the borrower not expressly required by the terms of the Mortgage Loan documents or under applicable law, alterations on the related Mortgaged Property if approval by the mortgagee is required by the related Mortgage Loan documents, material change in any ancillary Mortgage Loan documents or the waiver of any notice provisions related to prepayment; and (ii) the holder of the PNC Corporate Plaza Subordinate Companion Loan or its designee will be entitled to exercise rights and powers with respect to the PNC Corporate Plaza Whole Loan that are the same as or similar to those of the Controlling Class Representative described above and must be notified of, and give its prior written approval to the following additional actions in accordance with the PNC Corporate Plaza Intercreditor Agreement: (A) any modification of, or waiver with respect to, the PNC Corporate Plaza Building Whole Loan that would result in the extension of the maturity date or extended maturity date thereof, a reduction in the interest rate borne thereby or the monthly debt service payment, prepayment premium or extension fee payable thereon or a deferral or a forgiveness of interest on or principal of the PNC Corporate Plaza Whole Loan or a modification or waiver of any other monetary term of the PNC Corporate Plaza Whole Loan relating to the timing or amount of any payment of principal or interest (other than default interest) or any other material sums due and payable under the related Mortgage Loan documents or a modification or waiver of any provision of the PNC Corporate Plaza Whole Loan which restricts the borrower or its equity owners from incurring additional indebtedness; (B) any modification of, or waiver with respect to, the PNC Corporate Plaza Whole Loan that would result in a discounted pay-off of the PNC Corporate Plaza Whole Loan; (C) any foreclosure upon or comparable conversion of the ownership of the related Mortgaged Property or any acquisition of the related Mortgaged Property by deed-in-lieu of foreclosure; (D) any sale of the related Mortgaged Property or any material portion thereof (other than pursuant to a purchase option contained in the PNC Corporate Plaza Building Intercreditor Agreement or in the Pooling and Servicing Agreement) or, except, as specifically permitted in the related Mortgage Loan documents, the transfer of any direct or indirect interest in the borrower or any sale of the PNC Corporate Plaza Whole Loan; (E) any action to bring the related Mortgaged Property or REO Property into compliance with any laws relating to hazardous materials; (F) any substitution or release of collateral for the PNC Corporate Plaza Whole Loan (other than in accordance with the terms of, or upon satisfaction of, the PNC Corporate Plaza Whole Loan); (G) any release of the borrower or any guarantor from liability with respect to the PNC Corporate Plaza Whole Loan; (H) any waiver of or determination not to enforce a ‘‘due-on-sale’’ or ‘‘due-on-encumbrance’’ clause (unless such clause is not exercisable under applicable law or such exercise is reasonably likely to result in successful legal action by the borrower); (I) any material changes to or waivers of any of the insurance requirements under the related Mortgage Loan documents; (J) the voting on any plan of reorganization, restructuring or similar plan in the bankruptcy of the borrower.
Notwithstanding the foregoing, provided no Spring Mill Corporate Center Control Appraisal Period is in effect under the Spring Mill Corporate Center Intercreditor Agreement, the holder of the Spring Mill Corporate Center Subordinate Companion Loan will have the right to consult with and/or consent to certain actions of the Master Servicer and/or the Special Servicer with respect to the Spring Mill Corporate Center Whole Loan and the Controlling Class, and the Controlling Class Representative, will not have the consent and advice rights described in this prospectus supplement; provided, however, the Controlling Class Representative will be entitled to discuss (without any consent right) any of the following actions with the Special Servicer. Generally, the holder of the Spring Mill Corporate Center
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Subordinate Companion Loan will be entitled to rights including that (i) the Special Servicer and/or the Master Servicer will be required to consult with the holder of the Spring Mill Corporate Center Subordinate Companion Loan or its designee in connection with any adoption or implementation of a business plan submitted by the borrower with respect to the related Mortgaged Property, the execution or renewal of any lease, the release of any escrow held in conjunction with the Spring Mill Corporate Center Whole Loan to the borrower not expressly required by the terms of the Mortgage Loan documents or under applicable law, alterations on the related Mortgaged Property if approval by the mortgagee is required by the related Mortgage Loan documents, material change in any ancillary Mortgage Loan documents or the waiver of any notice provisions related to prepayment; and (ii) the holder of the Spring Mill Corporate Center Subordinate Companion Loan or its designee will be entitled to exercise rights and powers with respect to the Spring Mill Corporate Center Whole Loan that are the same as or similar to those of the Controlling Class Representative described above and must be notified of, and give its prior written approval to the following additional actions in accordance with the Spring Mill Corporate Center Intercreditor Agreement: (A) any modification of, or waiver with respect to, the Spring Mill Corporate Center Whole Loan that would result in the extension of the maturity date or extended maturity date thereof, a reduction in the interest rate borne thereby or the monthly debt service payment, prepayment premium or extension fee payable thereon or a deferral or a forgiveness of interest on or principal of the Spring Mill Corporate Center Whole Loan or a modification or waiver of any other monetary term of the Spring Mill Corporate Center Whole Loan relating to the timing or amount of any payment of principal or interest (other than default interest) or any other material sums due and payable under the related Mortgage Loan documents or a modification or waiver of any provision of the Spring Mill Corporate Center Whole Loan which restricts the borrower or its equity owners from incurring additional indebtedness; (B) any modification of, or waiver with respect to, the Spring Mill Corporate Center Whole Loan that would result in a discounted pay-off of the Spring Mill Corporate Center Whole Loan; (C) any foreclosure upon or comparable conversion of the ownership of the related Mortgaged Property or any acquisition of the related Mortgaged Property by deed-in-lieu of foreclosure; (D) any sale of the related Mortgaged Property or any material portion thereof (other than pursuant to a purchase option contained in the Spring Mill Corporate Center Intercreditor Agreement or in the Pooling and Servicing Agreement) or, except, as specifically permitted in the related Mortgage Loan documents, the transfer of any direct or indirect interest in the borrower or any sale of the Spring Mill Corporate Center Whole Loan; (E) any action to bring the related Mortgaged Property or REO Property into compliance with any laws relating to hazardous materials; (F) any substitution or release of collateral for the Spring Mill Corporate Center Whole Loan (other than in accordance with the terms of, or upon satisfaction of, the Spring Mill Corporate Center Whole Loan); (G) any release of the borrower or any guarantor from liability with respect to the Spring Mill Corporate Center Whole Loan; (H) any waiver of or determination not to enforce a ‘‘due-on-sale’’ or ‘‘due-on-encumbrance’’ clause (unless such clause is not exercisable under applicable law or such exercise is reasonably likely to result in successful legal action by the borrower); (I) any material changes to or waivers of any of the insurance requirements under the related Mortgage Loan documents; and (J) any incurrence of additional debt by the borrower to the extent such incurrence requires the consent of the mortgagee under the related Mortgage Loan documents.
Notwithstanding the foregoing, provided no Eastland Center Control Appraisal Period is in effect under the Eastland Center Intercreditor Agreement, the holder of the Eastland Center Subordinate Companion Loan will have the right to consult with and/or consent to certain actions of the Master Servicer and/or the Special Servicer with respect to the Eastland Center Whole Loan and the Controlling Class, and the Controlling Class Representative, will not have the consent and advice rights described in this prospectus supplement; provided, however, the Controlling Class Representative will be entitled to discuss (without any consent right) any of the following actions with the Special Servicer. Generally, the holder of the Eastland Center Subordinate Companion Loan will be entitled to rights including that (i) the Special Servicer and/or the Master Servicer will be required to consult with the holder of the Eastland Center Subordinate Companion Loan or its designee in connection with any adoption or implementation of a business plan submitted by the borrower with respect to the related Mortgaged Property, the execution or renewal of any lease, the release of any escrow held in conjunction with the Eastland Center Whole Loan to the borrower not expressly required by the terms of the Mortgage Loan documents or under applicable law, alterations on the related Mortgaged Property if approval by the
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mortgagee is required by the related Mortgage Loan documents, material change in any ancillary Mortgage Loan documents or the waiver of any notice provisions related to prepayment; and (ii) the holder of the Eastland Center Subordinate Companion Loan or its designee will be entitled to exercise rights and powers with respect to the Eastland Center Whole Loan that are the same as or similar to those of the Controlling Class Representative described above and must be notified of, and give its prior written approval to the following additional actions in accordance with the Eastland Center Intercreditor Agreement: (A) any modification of, or waiver with respect to, the Eastland Center Whole Loan that would result in the extension of the maturity date or extended maturity date thereof, a reduction in the interest rate borne thereby or the monthly debt service payment, prepayment premium or extension fee payable thereon or a deferral or a forgiveness of interest on or principal of the Eastland Center Whole Loan or a modification or waiver of any other monetary term of the Eastland Center Whole Loan relating to the timing or amount of any payment of principal or interest (other than default interest) or any other material sums due and payable under the related Mortgage Loan documents or a modification or waiver of any provision of the Eastland Center Whole Loan which restricts the borrower or its equity owners from incurring additional indebtedness; (B) any modification of, or waiver with respect to, the Eastland Center Whole Loan that would result in a discounted pay-off of the Eastland Center Whole Loan; (C) any foreclosure upon or comparable conversion of the ownership of the related Mortgaged Property or any acquisition of the related Mortgaged Property by deed-in-lieu of foreclosure; (D) any sale of the related Mortgaged Property or any material portion thereof (other than pursuant to a purchase option contained in the Eastland Center Intercreditor Agreement or in the Pooling and Servicing Agreement) or, except, as specifically permitted in the related Mortgage Loan documents, the transfer of any direct or indirect interest in the borrower or any sale of the Eastland Center Whole Loan; (E) any action to bring the related Mortgaged Property or REO Property into compliance with any laws relating to hazardous materials; (F) any substitution or release of collateral for the Eastland Center Whole Loan (other than in accordance with the terms of, or upon satisfaction of, the Eastland Center Whole Loan); (G) any release of the borrower or any guarantor from liability with respect to the Eastland Center Whole Loan; (H) any waiver of or determination not to enforce a ‘‘due-on-sale’’ or ‘‘due-on-encumbrance’’ clause (unless such clause is not exercisable under applicable law or such exercise is reasonably likely to result in successful legal action by the borrower); (I) any material changes to or waivers of any of the insurance requirements under the related Mortgage Loan documents; and (J) any incurrence of additional debt by the borrower to the extent such incurrence requires the consent of the mortgagee under the related Mortgage Loan documents.
Further, notwithstanding the foregoing, the holder of the Mezz Cap Subordinate Companion Loan may exercise certain approval rights relating to a modification of the Mezz Cap Loan or the Mezz Cap Subordinate Companion Loan that materially and adversely affects the holder of the Mezz Cap Subordinate Companion Loan prior to the expiration of the related repurchase period. See ‘‘DESCRIPTION OF THE MORTGAGE POOL—Co-Lender Loans—The Mezz Cap Loan— Servicing Provisions of the Mezz Cap Intercreditor Agreement’’ in this prospectus supplement.
In addition, the holders of the related Caplease Subordinate Companion Loans may exercise certain approval rights relating to modification of the related Caplease Subordinate Companion Loans that materially and adversely affects the holders of the related Caplease Subordinate Companion Loans prior to the expiration of the related repurchase period. In addition, the holders of the related Caplease Subordinate Companion Loans may exercise certain approval rights relating to a modification of the related Caplease Loan or related Caplease Subordinate Companion Loans that materially and adversely affects the holders of the related Caplease Subordinate Companion Loans and certain other matters related to Defaulted Lease Claims. See ‘‘DESCRIPTION OF THE MORTGAGE POOL—Co Lender Loans—The Caplease Loans—Servicing Provisions of the Caplease Intercreditor Agreement’’ in this prospectus supplement.
Further, notwithstanding any of the control rights of the holders of the Subordinate Companion Loans described above, generally no such control rights contemplated by the prior paragraphs may require or cause the Master Servicer or Special Servicer, as applicable, to violate any REMIC regulations, any provision of the Pooling and Servicing Agreement or applicable law, including the Master Servicer’s or Special Servicer’s obligation to act in accordance with the Servicing Standard.
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Limitation on Liability of the Controlling Class Representative. The Controlling Class Representative will not have any liability to the Certificateholders for any action taken, or for refraining from the taking of any action, or for errors in judgment; provided, however, the Controlling Class Representative will not be protected against any liability to a Controlling Class Certificateholder which would otherwise be imposed by reason of willful misfeasance, bad faith or negligence in the performance of duties or by reason of reckless disregard of obligations or duties. By its acceptance of a Certificate, each Certificateholder confirms its understanding that the Controlling Class Representative may take actions that favor the interests of one or more Classes of the Certificates over other Classes of the Certificates, and that the Controlling Class Representative may have special relationships and interests that conflict with those of holders of some Classes of the Certificates; and each Certificateholder agrees to take no action against the Controlling Class Representative or any of its respective officers, directors, employees, principals or agents as a result of such a special relationship or conflict. Generally, the holders of the Subordinate Companion Loans or their respective designees, in connection with exercising the rights and powers described above with respect to the related Co-Lender Loan will be entitled to substantially the same liability limitations to which the Controlling Class Representative is entitled.
Defaulted Mortgage Loans; REO Properties; Purchase Option
The Pooling and Servicing Agreement contains provisions requiring, within 60 days after a Mortgage Loan (other than the State Street Financial Center Loan) becomes a Defaulted Mortgage Loan, the Special Servicer to determine the fair value of the Mortgage Loan in accordance with the Servicing Standard. The State Street Financial Center Loan will be serviced under the LB-UBS 2007-C1 Pooling and Servicing Agreement and any actions taken following a default will be in accordance with the terms thereof. See ‘‘—Servicing of the State Street Financial Center Loan’’ in this prospectus supplement. A ‘‘Defaulted Mortgage Loan’’ is a Mortgage Loan (i) that is delinquent 60 days or more with respect to a Periodic Payment (not including the Balloon Payment) or (ii) that is delinquent in respect of its Balloon Payment; provided, however, if the borrower continues to make its Assumed Scheduled Payment and diligently pursues refinancing, such Mortgage Loan shall not be considered a Defaulted Mortgage Loan until 60 days following such default (or, if the Master Servicer has, within 60 days after the Due Date of such Balloon Payment, received written evidence from an institutional lender of such lender’s binding commitment (which is reasonably acceptable to the Special Servicer and the Controlling Class Representative has given its consent (which consent shall be deemed denied if not granted within 10 Business Days)) to refinance such Mortgage Loan, 120 days following such default) (provided that if such refinancing does not occur during such time specified in the commitment, the related Mortgage Loan will immediately become a Defaulted Mortgage Loan), in either case such delinquency to be determined without giving effect to any grace period permitted by the related Mortgage Loan documents and without regard to any acceleration of payments under the related Mortgage and Mortgage Note or (iii) as to which the Master Servicer or Special Servicer has, by written notice to the related mortgagor, accelerated the maturity of the indebtedness evidenced by the related Mortgage Note. The Special Servicer will be permitted to change, from time to time, its determination of the fair value of a Defaulted Mortgage Loan based upon changed circumstances, new information or otherwise, in accordance with the Servicing Standard; provided, however, the Special Servicer will update its determination of the fair value of a Defaulted Mortgage Loan at least once every 90 days.
In the event a Mortgage Loan becomes a Defaulted Mortgage Loan, the Majority Subordinate Certificateholder will have an assignable option to purchase (subject to, in certain instances, the rights of subordinated secured creditors or mezzanine lenders to purchase the related Mortgage Loan, see ‘‘DESCRIPTION OF THE MORTGAGE POOL—Certain Provisions of the Intercreditor Agreements with Respect to Certain Subordinate Loans’’) (the ‘‘Purchase Option’’) the Defaulted Mortgage Loan from the Trust Fund at a price (the ‘‘Option Price’’) equal to (i) the outstanding principal balance of the Defaulted Mortgage Loan as of the date of purchase, plus all accrued and unpaid interest on such balance plus all related fees and expenses, if the Special Servicer has not yet determined the fair value of the Defaulted Mortgage Loan, or (ii) the fair value of the Defaulted Mortgage Loan as determined by the Special Servicer, if the Special Servicer has made such fair value determination. If the Purchase Option is not exercised by the Majority Subordinate Certificateholder or any assignee thereof within 60 days of a Mortgage Loan becoming a Defaulted Mortgage Loan, then the Majority Subordinate Certificateholder
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shall assign the Purchase Option to the Special Servicer for 15 days. If the Purchase Option is not exercised by the Special Servicer or its assignee within such 15 day period, then the Purchase Option shall revert to the Majority Subordinate Certificateholder.
Unless and until the Purchase Option with respect to a Defaulted Mortgage Loan is exercised, the Special Servicer will be required to pursue such other resolution strategies available under the Pooling and Servicing Agreement, including workout and foreclosure, consistent with the Servicing Standard, but the Special Servicer generally will not be permitted to sell the Defaulted Mortgage Loan other than pursuant to the exercise of the Purchase Option.
If not exercised sooner, the Purchase Option with respect to any Defaulted Mortgage Loan will automatically terminate upon (i) the related mortgagor’s cure of all defaults on the Defaulted Mortgage Loan, (ii) the acquisition on behalf of the Trust Fund of title to the related Mortgaged Property by foreclosure or deed in lieu of foreclosure or (iii) the modification or pay-off (full or discounted) of the Defaulted Mortgage Loan in connection with a workout. In addition, the Purchase Option with respect to a Defaulted Mortgage Loan held by any person will terminate upon the exercise of the Purchase Option by any other holder of the Purchase Option.
If (a) the Purchase Option is exercised with respect to a Defaulted Mortgage Loan and the person expected to acquire the Defaulted Mortgage Loan pursuant to such exercise is the Majority Subordinate Certificateholder, the Special Servicer, or any affiliate of any of them (in other words, the Purchase Option has not been assigned to another unaffiliated person) and (b) the Option Price is based on the Special Servicer’s determination of the fair value of the Defaulted Mortgage Loan, the Trustee will be required to determine if the Option Price represents a fair price for the Defaulted Mortgage Loan. In making such determination, the Trustee will be entitled to rely on the most recent appraisal of the related Mortgaged Property that was prepared in accordance with the terms of the Pooling and Servicing Agreement and may rely upon the opinion and report of an independent third-party in making such determination, the cost of which will be advanced by the Master Servicer.
If title to any Mortgaged Property is acquired by the Trustee on behalf of the Certificateholders pursuant to foreclosure proceedings instituted by the Special Servicer or otherwise, the Special Servicer, after notice to the Controlling Class Representative, shall use its reasonable best efforts to sell any REO Property as soon as practicable in accordance with the Servicing Standard but prior to the end of the third calendar year following the year of acquisition, unless (i) the Internal Revenue Service grants an extension of time to sell such property (an ‘‘REO Extension’’) or (ii) it obtains an opinion of counsel generally to the effect that the holding of the property for more than 3 years after the end of the calendar year in which it was acquired will not result in the imposition of a tax on the Trust Fund or cause any REMIC relating to the assets of the Trust Fund to fail to qualify as a REMIC under the Code. If the Special Servicer on behalf of the Trustee has not received an Extension or such opinion of counsel and the Special Servicer is not able to sell such REO Property within the period specified above, or if an REO Extension has been granted and the Special Servicer is unable to sell such REO Property within the extended time period, the Special Servicer shall auction the property pursuant to the auction procedure set forth below.
The Special Servicer shall give the Controlling Class Representative, the Master Servicer and the Trustee not less than 5 days’ prior written notice of its intention to sell any such REO Property, and shall auction the REO Property to the highest bidder (which may be the Special Servicer) in accordance with the Servicing Standard; provided, however, the Master Servicer, Special Servicer, Majority Subordinate Certificateholder, any independent contractor engaged by the Master Servicer or the Special Servicer pursuant to the Pooling and Servicing Agreement (or any officer or affiliate thereof) shall not be permitted to purchase the REO Property at a price less than the outstanding principal balance of such Mortgage Loan as of the date of purchase, plus all accrued but unpaid interest and related fees and expenses, except in limited circumstances set forth in the Pooling and Servicing Agreement; provided, further, if the Special Servicer intends to bid on any REO Property, (i) the Special Servicer shall notify the Trustee of such intent, (ii) the Trustee shall promptly obtain, at the expense of the Trust Fund an appraisal of such REO Property (or internal valuation in accordance with the procedures specified in the Pooling and Servicing Agreement) and (iii) the Special Servicer shall not bid less than the greater of
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(x) the fair market value set forth in such appraisal (or internal valuation) or (y) the outstanding principal balance of such Mortgage Loan, plus all accrued but unpaid interest and related fees and expenses.
Subject to the REMIC provisions, the Special Servicer shall act on behalf of the Trust Fund in negotiating and taking any other action necessary or appropriate in connection with the sale of any REO Property or the exercise of the Purchase Option, including the collection of all amounts payable in connection therewith. Notwithstanding anything to the contrary herein, neither the Trustee, in its individual capacity, nor any of its affiliates may bid for any REO Property or purchase any Defaulted Mortgage Loan. Any sale of a Defaulted Mortgage Loan (pursuant to the Purchase Option) or REO Property shall be without recourse to, or representation or warranty by, the Trustee, the Depositor, any Mortgage Loan Seller, the Special Servicer, the Master Servicer or the Trust Fund. Notwithstanding the foregoing, nothing herein shall limit the liability of the Master Servicer, the Special Servicer or the Trustee to the Trust Fund and the Certificateholders for failure to perform its duties in accordance with the Pooling and Servicing Agreement. None of the Special Servicer, the Master Servicer, the Depositor or the Trustee shall have any liability to the Trust Fund or any Certificateholder with respect to the price at which a Defaulted Mortgage Loan is sold if the sale is consummated in accordance with the terms of the Pooling and Servicing Agreement. The proceeds of any sale after deduction of the expenses of such sale incurred in connection therewith shall be deposited within one business day in the Certificate Account.
If the Trust Fund acquires a Mortgaged Property by foreclosure or deed-in-lieu of foreclosure upon a default with respect to a Mortgage Loan, the Pooling and Servicing Agreement provides that the Special Servicer, on behalf of the Trustee, must administer such Mortgaged Property so that the Trust Fund’s interest therein qualifies at all times as ‘‘foreclosure property’’ within the meaning of Code Section 860G(a)(8). The Pooling and Servicing Agreement also requires that any such Mortgaged Property be managed and operated by an ‘‘independent contractor,’’ within the meaning of applicable Treasury regulations, who furnishes or renders services to the tenants of such Mortgaged Property. Generally, REMIC I will not be taxable on income received with respect to a related Mortgaged Property to the extent that it constitutes ‘‘rents from real property,’’ within the meaning of Code Section 856(c)(3)(A) and Treasury regulations thereunder. ‘‘Rents from real property’’ do not include the portion of any rental based on the net income or gain of any tenant or sub-tenant. No determination has been made whether rent on any of the Mortgaged Properties meets this requirement. ‘‘Rents from real property’’ include charges for services customarily furnished or rendered in connection with the rental of real property, whether or not the charges are separately stated. Services furnished to the tenants of a particular building will be considered as customary if, in the geographic market in which the building is located, tenants in buildings which are of a similar class are customarily provided with the service. No determination has been made whether the services furnished to the tenants of the Mortgaged Properties are ‘‘customary’’ within the meaning of applicable regulations. It is therefore possible that a portion of the rental income with respect to a Mortgaged Property owned by REMIC I would not constitute ‘‘rents from real property,’’ or that all of such income would not qualify, if a separate charge is not stated for such services or they are not performed by an independent contractor. In addition to the foregoing, any net income from a trade or business operated or managed by an independent contractor on a Mortgaged Property owned by REMIC I, or gain on a sale of a Mortgaged Property (including condominium units to customers in the ordinary course of a trade or business), will not constitute ‘‘rents from real property’’. Any of the foregoing types of income may instead constitute ‘‘net income from foreclosure property’’, which would be taxable to REMIC I, at the highest marginal federal corporate rate (currently 35%) and may also be subject to state or local taxes. Any such taxes would be chargeable against the related income for purposes of determining the proceeds available for distribution to holders of Certificates. The Pooling and Servicing Agreement provides that the Special Servicer will be permitted to cause REMIC I, to earn ‘‘net income from foreclosure property’’ that is subject to tax if it determines that the net after-tax benefit to Certificateholders and the holders of the related Companion Loans could reasonably be expected to result in a greater recovery than another method of operation or rental of the Mortgaged Property. See ‘‘MATERIAL FEDERAL INCOME TAX CONSEQUENCES’’ in this prospectus supplement.
Inspections; Collection of Operating Information
The Special Servicer is required to perform or cause to be performed a physical inspection of a Mortgaged Property (other than the Mortgaged Property related to the State Street Financial Center
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Loan) as soon as practicable after the related Mortgage Loan becomes a Specially Serviced Mortgage Loan, and the Master Servicer (in the case of each Mortgaged Property securing a Mortgage Loan other than a Specially Serviced Mortgage Loan and other than the State Street Financial Center Loan) or the Special Servicer (in the case of Specially Serviced Mortgage Loans but other than the State Street Financial Center Loan) shall perform or cause to be performed a physical inspection of a Mortgaged Property as soon as the related debt service coverage ratio is below 1.00x; provided, however, with respect to inspections prepared by the Special Servicer, such expense will be payable first, out of penalty interest and late payment charges otherwise payable to the Special Servicer and received in the Collection Period during which such inspection related expenses were incurred, then at the Trust Fund’s expense. In addition, beginning in 2008, with respect to each Mortgaged Property securing a Mortgage Loan (other than the Mortgaged Property related to the State Street Financial Center Loan) with a principal balance (or allocated loan amount) at the time of such inspection of more than or equal to $2,000,000, the Master Servicer (with respect to each such Mortgaged Property securing a Mortgage Loan other than a Specially Serviced Mortgage Loan) and the Special Servicer (with respect to each Mortgaged Property securing a Specially Serviced Mortgage Loan) is required (and in the case of the Master Servicer at its expense) to inspect or cause to be inspected the Mortgaged Property every calendar year and with respect to each Mortgaged Property securing a Mortgage Loan with a principal balance (or allocated loan amount) at the time of such inspection of less than $2,000,000 once every other calendar year; provided that the Master Servicer is not obligated to inspect any Mortgaged Property that has been inspected by the Special Servicer in the previous 6 months. The Special Servicer and the Master Servicer each will be required to prepare a written report of each such inspection performed by it that describes the condition of the Mortgaged Property and that specifies the existence with respect thereto of any sale, transfer or abandonment or any material change in its condition or value.
The Special Servicer with respect to Specially Serviced Mortgage Loans and REO Properties or the Master Servicer with respect to all other Mortgage Loans is also required consistent with the Servicing Standard to collect from the related borrower and review the quarterly and annual operating statements of each Mortgaged Property (other than the Mortgaged Property related to the State Street Financial Center Loan) and to cause annual operating statements to be prepared for each REO Property. Generally, the Mortgage Loans require the related borrower to deliver an annual property operating statement. However, there can be no assurance that any operating statements required to be delivered will in fact be delivered, nor is the Master Servicer or Special Servicer likely to have any practical means of compelling such delivery in the case of an otherwise performing Mortgage Loan.
Copies of the inspection reports and operating statements referred to above are required to be available for review by Certificateholders during normal business hours at the offices of the Special Servicer or the Master Servicer, as applicable. See ‘‘DESCRIPTION OF THE CERTIFICATES— Reports to Certificateholders; Available Information’’ in this prospectus supplement.
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DESCRIPTION OF THE CERTIFICATES
General
The Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2007-C30 (the ‘‘Certificates’’) will be issued pursuant to a pooling and servicing agreement, dated as of March 1, 2007, among the Depositor, the Master Servicer, the Special Servicer and the Trustee (the ‘‘Pooling and Servicing Agreement’’). The Certificates represent in the aggregate the entire beneficial ownership interest in a trust fund (the ‘‘Trust Fund’’) consisting primarily of: (i) the Mortgage Loans and all payments and other collections in respect of such loans received or applicable to periods after the applicable Cut-Off Date (exclusive of payments of principal and interest due, and principal prepayments received, on or before the Cut-Off Date); (ii) any REO Property acquired on behalf of the Trust Fund; (iii) such funds or assets as from time to time are deposited in the Certificate Account, the Distribution Account, the REO accounts, the Additional Interest Account, the Gain-on-Sale Reserve Account and the Interest Reserve Account (see ‘‘DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS — Certificate Account’’ in the prospectus); and (iv) certain rights of the Depositor under each Mortgage Loan Purchase Agreement relating to Mortgage Loan document delivery requirements and the representations and warranties of the Mortgage Loan Sellers regarding the Mortgage Loans.
The Certificates consist of the following classes (each, a ‘‘Class’’) designated as: (i) the Class A-1, Class A-2, Class A-3, Class A-4, Class A-PB, Class A-5 and Class A-1A Certificates (collectively, the ‘‘Class A Certificates’’); (ii) the Class A-M, Class A-J, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class O, Class P, Class Q and Class S Certificates (collectively, the ‘‘Subordinate Certificates’’ and, together with the Class A Certificates, the ‘‘Sequential Pay Certificates’’); (iii) the Class X-P, Class X-C and Class X-W Certificates (collectively, the ‘‘Class X Certificates’’ and together with the Sequential Pay Certificates, the ‘‘REMIC Regular Certificates’’); (iv) the Class R-I and Class R-II Certificates (together, the ‘‘REMIC Residual Certificates’’); and (v) the Class Z Certificates.
Only the Class A-1, Class A-2, Class A-3, Class A-4, Class A-PB, Class A-5, Class A-1A, Class A-M, Class A-J, Class B, Class C, Class D, Class E, and Class F Certificates (collectively, the ‘‘Offered Certificates’’) are offered by this prospectus supplement. The Class X-P, Class X-C, Class X-W, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class O, Class P, Class Q and Class S Certificates (collectively, the ‘‘Non-Offered Certificates’’), the Class Z Certificates and the REMIC Residual Certificates have not been registered under the Securities Act of 1933, as amended (the ‘‘Securities Act’’) and are not offered by this prospectus supplement. On the Closing Date, the Depositor will transfer the REMIC Residual Certificates to Wachovia Bank, National Association, a Sponsor, pursuant to that certain Transfer Affidavit and Agreement (the ‘‘Transfer Affidavit and Agreement’’), but the REMIC Residual Certificates may be sold or otherwise transferred to another person at any time subject to any applicable transfer restrictions. Accordingly, information in this prospectus supplement regarding the terms of the Non-Offered Certificates, the Class Z Certificates and the REMIC Residual Certificates is provided solely because of its potential relevance to a prospective purchaser of an Offered Certificate.
The Issuing Entity
The Issuing Entity will be a common law trust, created under the laws of the State of New York, formed on the Closing Date pursuant to the Pooling and Servicing Agreement. The Issuing Entity is also sometimes referred to herein as the Trust Fund. The assets of the Trust Fund will constitute the only assets of the Issuing Entity. The Issuing Entity will have no officers or directors and no continuing duties other than to hold the assets underlying the Certificates and to issue the Certificates; and except for these activities, the issuing entity will not be authorized and will have no power to borrow money or issue debt, merge with another entity, reorganize, liquidate or sell assets or engage in any business or activities. The Issuing Entity will operate under a fiscal year ending each December 31st. The Trustee, the Master Servicer and the Special Servicer are the persons authorized to act on behalf of the Issuing Entity under the Pooling and Servicing Agreement with respect to the Mortgage Loans and the Certificates. The roles and responsibilities of the foregoing are described in this prospectus supplement under ‘‘SERVICING OF
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THE MORTGAGE LOANS—The Master Servicer’’, ‘‘—The Special Servicer’’ and ‘‘DESCRIPTION OF THE CERTIFICATES—The Trustee’’. Additional information may also be found in the accompanying prospectus under ‘‘DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS’’.
Since the Issuing Entity is a common law trust, it may not be eligible for relief under the federal bankruptcy laws, unless it can be characterized as a ‘‘business trust’’ for purposes of the federal bankruptcy laws. Bankruptcy courts look at various considerations in making this determination, so it is not possible to predict with any certainty whether or not the Issuing Entity would be characterized as a ‘‘business trust.’’ The Depositor has been formed as a bankruptcy remote special purpose entity. In connection with the sale of the Mortgage Loans from each Mortgage Loan Seller to the Depositor and from the Depositor to the Trust Fund, certain legal opinions are required.
Accordingly, although the transfer of the underlying Mortgage Loans from each Mortgage Loan Seller to the Depositor and from the Depositor to the Trust Fund has been structured as a sale, there can be no assurance that the sale of the underlying Mortgage Loans will not be recharacterized as a pledge, with the result that the Depositor or Trust Fund is deemed to be a creditor of the related Mortgage Loan Seller rather than an owner of the Mortgage Loans. See ‘‘RISK FACTORS—The Offered Certificates— The Mortgage Loan Sellers, the Depositor and the Issuing Entity Are Subject to Bankruptcy or Insolvency Laws That May Affect the Trust Fund’s Ownership of the Mortgage Loans’’ in this prospectus supplement.
Registration and Denominations
The Offered Certificates will be made available in book-entry format through the facilities of The Depository Trust Company (‘‘DTC’’). The Offered Certificates will be offered in denominations of not less than $10,000 actual principal amount and in integral multiples of $1 in excess thereof.
Certificate Balances and Notional Amounts
Subject to a permitted variance of plus or minus 5.0%, the respective Classes of Sequential Pay Certificates described below will have the Certificate Balances representing the approximate percentage of the Cut-Off Date Pool Balance as set forth in the following table:
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Class of Certificates | ![]() | ![]() | Closing Date Certificate Balance | ![]() | ![]() | Percentage of Cut-Off Date Pool Balance | ||||||
Class A-1 Certificates | ![]() | ![]() | ![]() | $ | 35,195,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.445 | % |
Class A-2 Certificates | ![]() | ![]() | ![]() | $ | 100,000,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.265 | % |
Class A-3 Certificates | ![]() | ![]() | ![]() | $ | 908,744,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 11.498 | % |
Class A-4 Certificates | ![]() | ![]() | ![]() | $ | 195,542,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 2.474 | % |
Class A-PB Certificates | ![]() | ![]() | ![]() | $ | 126,906,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.606 | % |
Class A-5 Certificates | ![]() | ![]() | ![]() | $ | 1,876,383,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 23.741 | % |
Class A-1A Certificates | ![]() | ![]() | ![]() | $ | 2,289,679,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 28.970 | % |
Class A-M Certificates | ![]() | ![]() | ![]() | $ | 790,349,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 10.000 | % |
Class A-J Certificates | ![]() | ![]() | ![]() | $ | 671,798,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 8.500 | % |
Class B Certificates | ![]() | ![]() | ![]() | $ | 49,397,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.625 | % |
Class C Certificates | ![]() | ![]() | ![]() | $ | 79,035,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 1.000 | % |
Class D Certificates | ![]() | ![]() | ![]() | $ | 69,155,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.875 | % |
Class E Certificates | ![]() | ![]() | ![]() | $ | 59,277,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.750 | % |
Class F Certificates | ![]() | ![]() | ![]() | $ | 69,155,000 | ![]() | ![]() | ![]() | ![]() | ![]() | 0.875 | % |
Non-Offered Certificates (other than the Class X-P Class X-C, Class X-W, Class R-I, Class R-II and Class Z Certificates) | ![]() | ![]() | ![]() | $ | 582,883,737 | ![]() | ![]() | ![]() | ![]() | ![]() | 7.375 | % |
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The ‘‘Certificate Balance’’ of any Class of Sequential Pay Certificates outstanding at any time represents the maximum amount that the holders thereof are entitled to receive as distributions allocable to principal from the cash flow on the Mortgage Loans and the other assets in the Trust Fund. The
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Certificate Balance of each Class of Sequential Pay Certificates, in each case, will be reduced on each Distribution Date by any distributions of principal actually made on such Class of Certificates on such Distribution Date, and further by any Realized Losses and Additional Trust Fund Expenses actually allocated to such Class of Certificates on such Distribution Date.
The Class X-P, Class X-C and Class X-W Certificates do not have a Certificate Balance, but represent the right to receive distributions of interest in an amount equal to the aggregate interest accrued on its notional amount (the ‘‘Notional Amount’’). The Class X-P, Class X-C and Class X-W Certificates have separate components (each, a ‘‘Component’’), each corresponding to a different Class of Sequential Pay Certificates. Each such Component has the same letter and/or numerical designation as its related Class of Sequential Pay Certificates. The component balance (the ‘‘Component Balance’’) of each Component will equal the Certificate Balance of the corresponding Class of Sequential Pay Certificates outstanding from time to time.
On each Distribution Date, the Notional Amount of the Class X-W Certificates generally will be equal to 75% of the aggregate outstanding Component Balances of the Components on such date. The initial Notional Amount of the Class X-W Certificates will equal approximately $5,927,624,052 (subject to a permitted variance of plus or minus 5.0%).
On each Distribution Date, the Notional Amount of the Class X-C Certificates generally will be equal to 25% of the aggregate outstanding Component Balances of the Components on such date. The initial Notional Amount of the Class X-C Certificates will equal approximately $1,975,874,684 (subject to a permitted variance of plus or minus 5.0%).
The Notional Amount of the Class X-P Certificates will generally equal:
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(1) | until the Distribution Date in September 2007, 25% of the sum of (a) the lesser of $18,802,000 and the Certificate Balance of the Class A-1 Certificates, (b) the lesser of $2,289,501,000 and the Certificate Balance of the Class A-1A Certificates, and (c) the aggregate Certificate Balances of Class A-2, Class A-3, Class A-4, Class A-PB, Class A-5, Class A-M, Class A-J, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J and Class K Certificates; |
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(2) | after the Distribution Date in September 2007, through and including the Distribution Date in March 2008, 25% of the sum of (a) the lesser of $16,695,000 and the Certificate Balance of the Class A-1 Certificates, (b) the lesser of $2,289,285,000 and the Certificate Balance of the Class A-1A Certificates, and (c) the aggregate Certificate Balances of Class A-2, Class A-3, Class A-4, Class A-PB, Class A-5, Class A-M, Class A-J, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J and Class K Certificates; |
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(3) | after the Distribution Date in March 2008, through and including the Distribution Date in September 2008, 25% of the sum of (a) the lesser of $21,770,000 and the Certificate Balance of the Class A-2 Certificates, (b) the lesser of $2,251,186,000 and the Certificate Balance of the Class A-1A Certificates, and (c) the aggregate Certificate Balances of Class A-3, Class A-4, Class A-PB, Class A-5, Class A-M, Class A-J, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J and Class K Certificates; |
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(4) | after the Distribution Date in September 2008, through and including the Distribution Date in March 2009, 25% of the sum of (a) the lesser of $820,241,000 and the Certificate Balance of the Class A-3 Certificates, (b) the lesser of $2,206,800,000 and the Certificate Balance of the Class A-lA Certificates, and (c) the aggregate Certificate Balances of Class A-4, Class A-PB, Class A-5, Class A-M, Class A-J, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J and Class K Certificates; |
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(5) | after the Distribution Date in March 2009, through and including the Distribution Date in September 2009, 25% of the sum of (a) the lesser of $712,186,000 and the Certificate Balance of the Class A-3 Certificates, (b) the lesser of $2,163,707,000 and the Certificate Balance of the Class A-lA Certificates, and (c) the aggregate Certificate Balances of Class A-4, Class A-PB, Class A-5, Class A-M, Class A-J, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J and Class K Certificates; |
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(6) | after the Distribution Date in September 2009, through and including the Distribution Date in March 2010, 25% of the sum of (a) the lesser of $593,772,000 and the Certificate Balance of the Class A-3 Certificates, (b) the lesser of $2,114,420,000 and the Certificate Balance of the Class A-lA Certificates, and (c) the aggregate Certificate Balances of Class A-4, Class A-PB, Class A-5, Class A-M, Class A-J, Class B, Class C, Class D, Class E, Class F, Class G, Class H and Class J Certificates, and (d) the lesser of $7,506,000 and the Certificate Balance of the Class K Certificates; |
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(7) | after the Distribution Date in March 2010, through and including the Distribution Date in September 2010, 25% of the sum of (a) the lesser of $491,004,000 and the Certificate Balance of the Class A-3 Certificates, (b) the lesser of $2,073,584,000 and the Certificate Balance of the Class A-lA Certificates, (c) the aggregate Certificate Balances of Class A-4, Class A-PB, Class A-5, Class A-M, Class A-J, Class B, Class C, Class D, Class E, Class F, Class G and Class H Certificates, and (d) the lesser of $21,821,000 and the Certificate Balance of the Class J Certificates; |
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(8) | after the Distribution Date in September 2010, through and including the Distribution Date in March 2011, 25% of the sum of (a) the lesser of $391,619,000 and the Certificate Balance of the Class A-3 Certificates, (b) the lesser of $2,004,006,000 and the Certificate Balance of the Class A-lA Certificates, (c) the aggregate Certificate Balances of Class A-4, Class A-PB, Class A-5, Class A-M, Class A-J, Class B, Class C, Class D, Class E, Class F and Class G Certificates, and (d) the lesser of $28,617,000 and the Certificate Balance of the Class H Certificates; |
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(9) | after the Distribution Date in March 2011, through and including the Distribution Date in September 2011, 25% of the sum of (a) the lesser of $252,598,000 and the Certificate Balance of the Class A-3 Certificates, (b) the lesser of $1,965,660,000 and the Certificate Balance of the Class A-lA Certificates, (c) the aggregate Certificate Balances of Class A-4, Class A-PB, Class A-5, Class A-M, Class A-J, Class B, Class C, Class D, Class E and Class F Certificates, and (d) the lesser of $57,594,000 and the Certificate Balance of the Class G Certificates; |
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(10) | after the Distribution Date in September 2011, through and including the Distribution Date in March 2012, 25% of the sum of (a) the lesser of $1,625,527,000 and the Certificate Balance of the Class A-5 Certificates, (b) the lesser of $1,838,480,000 and the Certificate Balance of the Class A-lA Certificates, (c) the aggregate Certificate Balances of Class A-M, Class A-J, Class B, Class C, Class D and Class E Certificates, and (d) the lesser of $60,153,000 and the Certificate Balance of the Class F Certificates; |
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(11) | after the Distribution Date in March 2012, through and including the Distribution Date in September 2012, 25% of the sum of (a) the lesser of $1,545,468,000 and the Certificate Balance of the Class A-5 Certificates, (b) the lesser of $1,804,658,000 and the Certificate Balance of the Class A-lA Certificates, (c) the aggregate Certificate Balances of Class A-M, Class A-J, Class B, Class C, Class D and Class E Certificates, and (d) the lesser of $4,095,000 and the Certificate Balance of the Class F Certificates; |
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(12) | after the Distribution Date in September 2012, through and including the Distribution Date in March 2013, 25% of the sum of (a) the lesser of $1,468,259,000 and the Certificate Balance of the Class A-5 Certificates, (b) the lesser of $1,771,897,000 and the Certificate Balance of the Class A-lA Certificates, (c) the aggregate Certificate Balances of Class A-M, Class A-J, Class B, Class C and Class D Certificates, and (d) the lesser of $9,136,000 and the Certificate Balance of the Class E Certificates; |
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(13) | after the Distribution Date in March 2013 through and including the Distribution Date in September 2013, 25% of the sum of (a) the lesser of $1,388,565,000 and the Certificate Balance of the Class A-5 Certificates, (b) the lesser of $1,740,077,000 and the Certificate Balance of the Class A-lA Certificates, (c) the aggregate Certificate Balances of Class A-M, Class A-J, Class B and Class C Certificates, and (d) the lesser of $25,786,000 and the Certificate Balance of the Class D Certificates; |
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(14) | after the Distribution Date in September 2013, through and including the Distribution Date in March 2014, 25% of the sum of (a) the lesser of $1,184,480,000 and the Certificate Balance of the Class A-5 Certificates, (b) the lesser of $1,709,219,000 and the Certificate Balance of the Class A-lA Certificates, (c) the aggregate Certificate Balances of Class A-M, Class A-J and Class B Certificates, and (d) the lesser of $54,029,000 and the Certificate Balance of the Class C Certificates; and |
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(15) | after the Distribution Date in March 2014, $0. |
The initial Notional Amount of the Class X-P Certificates will be $1,912,455,500.
The Certificate Balance of any Class of Sequential Pay Certificates may be increased by the amount, if any, of Certificate Deferred Interest added to such Class Certificate Balance. With respect to any Mortgage Loan as to which the Mortgage Rate has been reduced through a modification on any Distribution Date, ‘‘Mortgage Deferred Interest’’ is the amount by which (a) interest accrued at such reduced rate is less than (b) the amount of interest that would have accrued on such Mortgage Loan at the Mortgage Rate before such reduction, to the extent such amount has been added to the outstanding principal balance of such Mortgage Loan.
On each Distribution Date, the amount of interest distributable to a Class of Sequential Pay Certificates will be reduced by the amount of Mortgage Deferred Interest allocable to such Class (any such amount, ‘‘Certificate Deferred Interest’’). With respect to the Sequential Pay Certificates, Certificate Deferred Interest will be allocated from lowest payment priority to highest (except with respect to the Class A-1, Class A-2, Class A-3, Class A-4, Class A-PB, Class A-5 and Class A-1A Certificates, which amounts shall be applied pro rata (based on the Certificate Balances of the remaining Classes)) to such Classes. The Certificate Balance of each Class of Sequential Pay Certificates to which Certificate Deferred Interest has been so allocated on a Distribution Date will be increased by the amount of Certificate Deferred Interest. Any increase in the Certificate Balance of a Class of Sequential Pay Certificates will result in an increase in the Notional Amount of the Class X-W and Class X-C Certificates, and to the extent there is an increase in the Certificate Balance of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-PB, Class A-5, Class A-1A, Class A-M, Class A-J, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J and Class K Certificates and subject to the limits described in the description of the Notional Amount of the Class X-P Certificates above, the Class X-P Certificates.
The REMIC Residual Certificates do not have Certificate Balances or Notional Amounts, but represent the right to receive on each Distribution Date any portion of the Available Distribution Amount for such date that remains after the required distributions have been made on all the REMIC Regular Certificates. It is not anticipated that any such portion of the Available Distribution Amount will result in more than a de minimis distribution to the REMIC Residual Certificates.
The Class Z Certificates do not have Certificate Balances or Notional Amounts, but represent the right to receive on each Distribution Date any amounts of Additional Interest received in the related Collection Period with respect to each ARD Loan.
Pass-Through Rates
The Pass-Through Rates applicable to each of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-PB, Class A-5, Class A-1A, Class A-M, Class A-J, Class B, Class C, Class D, Class E and Class F Certificates for each Distribution Date will equal the respective rate per annum set forth on the front cover of this prospectus supplement and/or the corresponding footnotes. Each of the Class X-W Components, the Class X-C Components and the Class X-P Components will be deemed to have a Pass-Through Rate equal to the Pass-Through Rate of the related Class of Certificates.
The Pass-Through Rate applicable to the Class X-W Certificates for the initial Distribution Date will equal approximately % per annum.
The Pass-Through Rate applicable to the Class X-W Certificates for each subsequent Distribution Date will, in general, equal the weighted average of the Class X-W Strip Rates for the components (the ‘‘Class X-W Components’’) for such Distribution Date (weighted on the basis of the respective
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Component Balances of such Class X-W Components outstanding immediately prior to such Distribution Date). Each Class X-W Component will be comprised of 75% of all or a designated portion of the Certificate Balance of one of the Classes of Sequential Pay Certificates. The Certificate Balance of each Class of Sequential Pay Certificates will constitute a separate Class X-W Component. The ‘‘Class X-W Strip Rate’’ in respect of any Class of Class X-W Components for any Distribution Date will, in general, equal the Weighted Average Net Mortgage Rate for such Distribution Date, minus the Pass-Through Rate for the Class of Sequential Pay Certificates corresponding to such Class X-W Component (but in no event will any Class X-W Strip Rate be less than zero).
The Pass-Through Rate applicable to the Class X-C Certificates for the initial Distribution Date will equal approximately % per annum.
The Pass-Through Rate applicable to the Class X-C Certificates for each subsequent Distribution Date will equal the weighted average of the respective Class X-C Strip Rates, at which interest accrues from time to time on the respective components (the ‘‘Class X-C Components’’) of the Class X-C Certificates outstanding immediately prior to such Distribution Date (weighted on the basis of the outstanding balances of those Class X-C Components immediately prior to the Distribution Date). Each Class X-C Component will be comprised of 25% of all or a designated portion of the Certificate Balance of one of the Classes of Sequential Pay Certificates. In general, the Certificate Balance of each Class of Sequential Pay Certificates will constitute a separate Class X-C Component. However, if a portion, but not all, of the Certificate Balance of any particular Class of Sequential Pay Certificates is identified under ‘‘—Certificate Balances and Notional Amounts’’ above as being part of the Notional Amount of the Class X-P Certificates immediately prior to any Distribution Date, then the identified portion of the Certificate Balance will also represent one or more separate Class X-C Components for purposes of calculating the Pass-Through Rate of the Class X-C Certificates, and the remaining portion of the Certificate Balance will represent one or more other separate Class X-C Components for purposes of calculating the Pass-Through Rate of the Class X-C Certificates. For each Distribution Date through and including the Distribution Date in March 2014, the ‘‘Class X-C Strip Rate’’ for each Class X-C Component will be calculated as follows:
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(1) | if such Class X-C Component consists of 25% of the entire Certificate Balance of any Class of Sequential Pay Certificates, and such 25% of the Certificate Balance does not, in whole or in part, also constitute a Class X-P Component immediately prior to the Distribution Date, then the applicable Class X-C Strip Rate will equal the excess, if any, of (a) the Weighted Average Net Mortgage Rate for the Distribution Date, over (b) the Pass-Through Rate in effect for the Distribution Date for the applicable Class of Sequential Pay Certificates; |
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(2) | if such Class X-C Component consists of a designated portion (but not all) of 25% of the Certificate Balance of any Class of Sequential Pay Certificates, and if the designated portion of such 25% of the Certificate Balance does not also constitute a Class X-P Component immediately prior to the Distribution Date, then the applicable Class X-C Strip Rate will equal the excess, if any, of (a) the Weighted Average Net Mortgage Rate for the Distribution Date, over (b) the Pass-Through Rate in effect for the Distribution Date for the applicable Class of Sequential Pay Certificates; |
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(3) | if such Class X-C Component consists of a designated portion (but not all) of 25% of the Certificate Balance of any Class of Sequential Pay Certificates, and if the designated portion of such 25% of the Certificate Balance also constitutes a Class X-P Component immediately prior to the Distribution Date, then the applicable Class X-C Strip Rate will equal the excess, if any, of (a) the Weighted Average Net Mortgage Rate for the Distribution Date, over (b) the sum of (i) the Class X-P Strip Rate for the applicable Class X-P Component, and (ii) the Pass-Through Rate in effect for the Distribution Date for the applicable Class of Sequential Pay Certificates; and |
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(4) | if such Class X-C Component consists of 25% of the entire Certificate Balance of any Class of Sequential Pay Certificates, and if such 25% of the Certificate Balance also constitutes, in its entirety, a Class X-P Component immediately prior to such Distribution Date, then the |
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applicable Class X-C Strip Rate will equal the excess, if any, of (a) the Weighted Average Net Mortgage Rate for the Distribution Date, over (b) the sum of (i) the Class X-P Strip Rate for the applicable Class X-P Component, and (ii) the Pass-Through Rate in effect for the Distribution Date for the applicable Class of Sequential Pay Certificates. |
For each Distribution Date after the Distribution Date in March 2014, 25% of the entire Certificate Balance of each Class of Sequential Pay Certificates will constitute one or more separate Class X-C Components, and the applicable Class X-C Strip Rate with respect to each such Class X-C Component for each Distribution Date will equal the excess, if any, of (a) the Weighted Average Net Mortgage Rate for the Distribution Date, over (b) the Pass-Through Rate in effect for the Distribution Date for the related Class of Sequential Pay Certificates.
The Pass-Through Rate applicable to the Class X-P Certificates for the initial Distribution Date will equal approximately % per annum.
The Pass-Through Rate applicable to the Class X-P Certificates for each subsequent Distribution Date will equal the weighted average of the respective Class X-P Strip Rates, at which interest accrues from time to time on the respective components (the ‘‘Class X-P Components’’) of the Class X-P Certificates outstanding immediately prior to such Distribution Date (weighted on the basis of the balances of those Class X-P Components immediately prior to the Distribution Date). Each Class X-P Component will be comprised of all or a designated portion of 25% of the Certificate Balance of a specified Class of Sequential Pay Certificates. If all or a designated portion of the Certificate Balance of any Class of Sequential Pay Certificates is identified under ‘‘—Certificate Balances and Notional Amounts’’ above as being part of the Notional Amount of the Class X-P Certificates immediately prior to any Distribution Date, then 25% of that Certificate Balance (or designated portion thereof) will represent one or more separate Class X-P Components for purposes of calculating the Pass-Through Rate of the Class X-P Certificates. For each Distribution Date through and including the Distribution Date in March 2014, the ‘‘Class X-P Strip Rate’’ for each Class X-P Component included in the Notional Amount of the Class X-P Certificates will equal (x) the lesser of (1) the Weighted Average Net Mortgage Rate for such Distribution Date, and (2) the reference rate specified on Annex G to this prospectus supplement for such Distribution Date minus 0.03% per annum, minus (y) the Pass-Through Rate for such Component (but in no event will any Class X-P Strip Rate be less than zero).
After the Distribution Date in March 2014, the Class X-P Certificates will cease to accrue interest and will have a 0% Pass-Through Rate.
In the case of each Class of REMIC Regular Certificates, interest at the applicable Pass-Through Rate will be payable monthly on each Distribution Date and will accrue during each Interest Accrual Period on the Certificate Balance (or, in the case of the Class X Certificates, the Notional Amount) of such Class of Certificates immediately following the Distribution Date in such Interest Accrual Period (after giving effect to all distributions of principal made on such Distribution Date). Interest on each Class of REMIC Regular Certificates will be calculated on the basis of a 360-day year consisting of twelve 30-day months. With respect to any Class of REMIC Regular Certificates and any Distribution Date, the ‘‘Interest Accrual Period’’ will be the preceding calendar month, which will be deemed to consist of 30 days; provided, however, for purposes of the initial Interest Accrual Period, such period commences on the Cut-Off Date and continues through the calendar month preceding the month in which such Distribution Date occurs.
The Class Z Certificates will not have a Pass-Through Rate or be entitled to distributions in respect of interest other than Additional Interest with respect to the Mortgage Loans.
The ‘‘Weighted Average Net Mortgage Rate’’ for each Distribution Date is the weighted average of the Net Mortgage Rates for the Mortgage Loans as of the commencement of the related Collection Period, weighted on the basis of their respective Stated Principal Balances immediately following the preceding Distribution Date; provided that for the purpose of determining the Weighted Average Net Mortgage Rate only, if the Mortgage Rate for any Mortgage Loan has been modified in connection with a bankruptcy or similar proceeding involving the related borrower or a modification, waiver or amendment granted or agreed to by the Special Servicer, the Weighted Average Net Mortgage Rate for such Mortgage Loan will be calculated without regard to such event.
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The ‘‘Net Mortgage Rate’’ for each Mortgage Loan will generally equal (x) the Mortgage Rate in effect for such Mortgage Loan (without regard to any increase in the interest rate of an ARD Loan as a result of not repaying the outstanding principal amount of such ARD Loan on or prior to the related Anticipated Repayment Date), minus (y) the applicable Administrative Cost Rate for such Mortgage Loan. Notwithstanding the foregoing, because no Mortgage Loan, other than 1 Mortgage Loan (loan number 93), representing 0.2% of the Cut-Off Date Pool Balance (0.3% of the Cut-Off Date Group 1 Balance), accrues interest on the basis of a 360-day year consisting of twelve 30-day months (which is the basis on which interest accrues in respect of the REMIC Regular Certificates, then, solely for purposes of calculating the Weighted Average Net Mortgage Rate for each Distribution Date, the Mortgage Rate of each Mortgage Loan in effect during any calendar month will be deemed to be the annualized rate at which interest would have to accrue in respect of such loan on a 30/360 basis in order to derive the aggregate amount of interest (other than default interest) actually accrued in respect of such loan during such calendar month; provided, however, the Mortgage Rate in effect during (a) December of each year that does not immediately precede a leap year, and January of each year will be the per annum rate stated in the related Mortgage Note, unless the final Distribution Date occurs in January or February immediately following such December or January and (b) in February of each year (January if the final Distribution Date occurs in February) will be determined inclusive of the one day of interest retained from the immediately preceding January and, if applicable, December.
The ‘‘Stated Principal Balance’’ of each Mortgage Loan outstanding at any time will generally be an amount equal to the principal balance thereof as of the Cut-Off Date, (a) reduced on each Distribution Date (to not less than zero) by (i) the portion of the Principal Distribution Amount for that date which is attributable to such Mortgage Loan and (ii) the principal portion of any Realized Loss incurred in respect of such Mortgage Loan during the related Collection Period and (b) increased on each Distribution Date by any Mortgage Deferred Interest added to the principal balance of such Mortgage Loan on such Distribution Date. The Stated Principal Balance of a Mortgage Loan may also be reduced in connection with any forced reduction of the actual unpaid principal balance thereof imposed by a court presiding over a bankruptcy proceeding in which the related borrower is a debtor. In addition, to the extent that principal from general collections is used to reimburse nonrecoverable Advances or Workout-Delayed Reimbursement Amounts, and such amount has not been included as part of the Principal Distribution Amount, such amount shall not reduce the Stated Principal Balance (other than for purposes of computing the Weighted Average Net Mortgage Rate). Notwithstanding the foregoing, if any Mortgage Loan is paid in full, liquidated or otherwise removed from the Trust Fund, commencing as of the first Distribution Date following the Collection Period during which such event occurred, the Stated Principal Balance of such Mortgage Loan will be zero. With respect to any Companion Loan on any date of determination, the Stated Principal Balance shall equal the unpaid principal balance of such Companion Loan.
The ‘‘Collection Period’’ for each Distribution Date is the period that begins on the 12th day in the month immediately preceding the month in which such Distribution Date occurs (or the day after the applicable Cut-Off Date in the case of the first Collection Period) and ends on and includes the 11th day in the same month as such Distribution Date. Notwithstanding the foregoing, in the event that the last day of a Collection Period is not a business day, any payments received with respect to the Mortgage Loans relating to such Collection Period on the business day immediately following such day will be deemed to have been received during such Collection Period and not during any other Collection Period, and in the event that the payment date (after giving effect to any grace period) related to any Distribution Date occurs after the related Collection Period, any amounts received on that payment date (after giving effect to any grace period) will be deemed to have been received during the related Collection Period and not during any other Collection Period.
The ‘‘Determination Date’’ will be, for any Distribution Date, the 11th day of each month, or if such 11th day is not a business day, the next succeeding business day, commencing in April, 2007.
Distributions
General. Except as described below with respect to the Class Z Certificates, distributions on the Certificates are made by the Trustee, to the extent of the Available Distribution Amount, on the fourth business day following the related Determination Date (each, a ‘‘Distribution Date’’). Except as described
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below, all such distributions will be made to the persons in whose names the Certificates are registered (the ‘‘Certificateholders’’) at the close of business on the last business day of the month preceding the month in which the related Distribution Date occurs and shall be made by wire transfer of immediately available funds, if such Certificateholder shall have provided wiring instructions no less than five business days prior to such record date, or otherwise by check mailed to the address of such Certificateholder as it appears in the Certificate register. The final distribution on any Certificate (determined without regard to any possible future reimbursement of any Realized Loss or Additional Trust Fund Expense previously allocated to such Certificate) will be made only upon presentation and surrender of such Certificate at the location that will be specified in a notice of the pendency of such final distribution. All distributions made with respect to a Class of Certificates will be allocated pro rata among the outstanding Certificates of such Class based on their respective percentage interests in such Class. The first Distribution Date on which investors in the Offered Certificates may receive distributions will be the Distribution Date occurring in April, 2007.
The Available Distribution Amount. The aggregate amount available for distributions of interest and principal to Certificateholders (other than the Class R-I, Class R-II and Class Z Certificateholders) on each related Distribution Date (the ‘‘Available Distribution Amount’’) will, in general, equal the sum of the following amounts:
(a) the total amount of all cash received on or in respect of the Mortgage Loans and any REO Properties as of the close of business on the last day of the related Collection Period and not previously distributed with respect to the Certificates or applied for any other permitted purpose, exclusive of any portion thereof that represents one or more of the following:
(i) any Periodic Payments collected but due on a Due Date after the related Collection Period;
(ii) any Prepayment Premiums and Yield Maintenance Charges;
(iii) all amounts in the Certificate Account or Distribution Account that are payable or reimbursable to any person other than the Certificateholders, including any Servicing Fees and Trustee Fees on the Mortgage Loans or Companion Loans;
(iv) any amounts deposited in the Certificate Account in error;
(v) any Additional Interest on the ARD Loans (which is separately distributed to the Class Z Certificates); and
(vi) if such Distribution Date occurs in February of any year or during January of any year that is not a leap year unless the final Distribution Date occurs in January or February immediately following such December or January, the Interest Reserve Amounts with respect to the Mortgage Loans to be deposited in the Interest Reserve Account and held for future distribution;
(b) all P&I Advances made by the Master Servicer or the Trustee with respect to such Distribution Date (other than, in the case of the Master Servicer, any P&I Advances allocable to a Pari Passu Companion Loan and all P&I Advances made by the LB-UBS 2007-C1 Master Servicer with respect to such Distribution Date and the State Street Financial Center Loan);
(c) any Compensating Interest Payment made by the Master Servicer to cover the aggregate of any Prepayment Interest Shortfalls experienced during the related Collection Period (other than any Compensating Interest Payment made on any Companion Loan); and
(d) if such Distribution Date occurs during March of any year or if such Distribution Date is the final Distribution Date and occurs in February or, if such year is not a leap year, in January, the aggregate of the Interest Reserve Amounts then on deposit in the Interest Reserve Account in respect of each Mortgage Loan.
See ‘‘SERVICING OF THE MORTGAGE LOANS—Compensation and Payment of Expenses’’ and ‘‘DESCRIPTION OF THE CERTIFICATES—P&I Advances’’ in this prospectus supplement and ‘‘DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS—Certificate Account’’ in the accompanying prospectus.
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Any Prepayment Premiums or Yield Maintenance Charges actually collected will be distributed separately from the Available Distribution Amount. See ‘‘—Allocation of Prepayment Premiums and Yield Maintenance Charges’’ below.
All amounts received by the Trust Fund with respect to any Co-Lender Loan will be applied to amounts due and owing under the related loan (including for principal and accrued and unpaid interest) in accordance with the provisions of the related Mortgage Loan documents, the related Intercreditor Agreement and the Pooling and Servicing Agreement.
Interest Reserve Account. The Trustee will establish and maintain an ‘‘Interest Reserve Account’’ in the name of the Trustee for the benefit of the holders of the Certificates. With respect to each Distribution Date occurring in February and each Distribution Date occurring in any January which occurs in a year that is not a leap year, unless the final Distribution Date occurs in January or February immediately following such December or January, there will be withdrawn from the Certificate Account and deposited to the Interest Reserve Account in respect of each Mortgage Loan (the ‘‘Interest Reserve Loans’’) which accrues interest on an Actual/360 basis an amount equal to one day’s interest at the related Mortgage Rate on its Stated Principal Balance, as of the Due Date in the month in which such Distribution Date occurs, to the extent a Periodic Payment or P&I Advance is timely made in respect thereof for such Due Date (all amounts so deposited in any consecutive January (if applicable) and February in respect of each Interest Reserve Loan, the ‘‘Interest Reserve Amount’’). With respect to each Distribution Date occurring in March, or in the event the final Distribution Date occurs in February or, if such year is not a leap year, in January, there will be withdrawn from the Interest Reserve Account the amounts deposited from the immediately preceding February and, if applicable, January, and such withdrawn amount is to be included as part of the Available Distribution Amount for such Distribution Date.
Certificate Account. The Master Servicer will establish and will maintain a ‘‘Certificate Account’’ in the name of the Trustee for the benefit of the Certificateholders and will maintain the Certificate Account as an eligible account pursuant to the terms of the Pooling and Servicing Agreement. Funds on deposit in the Certificate Account to the extent of the Available Distribution Amount will be used to make distributions on the Certificates. See ‘‘DESCRIPTION OF THE TRUST FUNDS—Certificate Accounts’’ in the prospectus.
Distribution Account. The Trustee will establish and will maintain a ‘‘Distribution Account’’ in the name of the Trustee for the benefit of the Certificateholders and will maintain the Distribution Account as an eligible account pursuant to the terms of the Pooling and Servicing Agreement. Funds on deposit in the Distribution Account, to the extent of the Available Distribution Amount will be used to make distributions on the Certificates.
Gain-on-Sale Reserve Account. The Trustee will establish and will maintain a ‘‘Gain-on-Sale Reserve Account’’ in the name of the Trustee for the benefit of the Certificateholders. To the extent that gains realized on sales of Mortgaged Properties, if any, are not used to offset Realized Losses previously allocated to the Certificates, such gains will be held and applied to offset future Realized Losses, if any.
Additional Interest Account. The Trustee will establish and will maintain an ‘‘Additional Interest Account’’ in the name of the Trustee for the benefit of the holders of the Class Z Certificates. Prior to the applicable Distribution Date, an amount equal to the Additional Interest received in respect of the Mortgage Loans during the related Collection Period will be deposited into the Additional Interest Account.
Other than the Assessment of Compliance and the Attestation Report, as such terms are defined in the accompanying prospectus, required to be delivered by certain parties, as described in the accompanying prospectus, there will be no independent certification of the account activity with respect to any of the Distribution Account, the Interest Reserve Account, the Additional Interest Account or the Gain-on-Sale Reserve Account.
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Application of the Available Distribution Amount. On each Distribution Date, the Trustee will (except as otherwise described under ‘‘—Termination’’ below) apply amounts on deposit in the Distribution Account, to the extent of the Available Distribution Amount, in the following order of priority:
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(1) | concurrently, to distributions of interest (i) from the portion of the Available Distribution Amount for such Distribution Date attributable to Mortgage Loans in Loan Group 1, to the holders of the Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-PB Certificates and Class A-5 Certificates, pro rata, in accordance with the amounts of Distributable Certificate Interest in respect of such Classes of Certificates on such Distribution Date, in an amount equal to all Distributable Certificate Interest in respect of such Classes of Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates, (ii) from the portion of the Available Distribution Amount for such Distribution Date attributable to Mortgage Loans in Loan Group 2, to the holders of the Class A-1A Certificates in an amount equal to all Distributable Certificate Interest in respect of such Class of Certificates on such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates, and (iii) from the entire Available Distribution Amount for such Distribution Date relating to the entire Mortgage Pool, to the holders of the Class X-P Certificates, the Class X-C Certificates and the Class X-W Certificates, pro rata, in accordance with the amounts of Distributable Certificate Interest in respect of such Classes of Certificates on such Distribution Date, in an amount equal to all Distributable Certificate Interest in respect of such Classes of Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates; provided, however, on any Distribution Date where the Available Distribution Amount (or applicable portion thereof) is not sufficient to make distributions in full to the related Classes of Certificates as described above, the Available Distribution Amount will be allocated among the above Classes of Certificates without regard to Loan Group, pro rata, in accordance with the respective amounts of Distributable Certificate Interest in respect of such Classes of Certificates on such Distribution Date, in an amount equal to all Distributable Certificate Interest in respect of each such Class of Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates; |
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(2) | to distributions of principal to the holders of the Class A-PB Certificates, in an amount equal to the Loan Group 1 Principal Distribution Amount for such Distribution Date and, after the Class A-1A Certificates have been retired, the Loan Group 2 Principal Distribution Amount remaining after payments to the Class A-1A Certificates have been made on such Distribution Date, until the Certificate Balance of the Class A-PB Certificates is reduced to the Class A-PB Planned Principal Balance set forth on Annex F to this prospectus supplement; |
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(3) | after distributions of principal have been made from the Loan Group 1 Principal Distribution Amount to the Class A-PB Certificates as set forth in clause (2) above, to distributions of principal to the holders of the Class A-1 Certificates in an amount (not to exceed the then outstanding Certificate Balance of the Class A-1 Certificates) equal to the remaining Loan Group 1 Principal Distribution Amount for such Distribution Date and, after the Class A-1A Certificates have been retired, the Loan Group 2 Principal Distribution Amount remaining after payments to the Class A-1A Certificates have been made on such Distribution Date, in each case, less any portion thereof distributed in respect of the Class A-PB Certificates on such Distribution Date; |
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(4) | after distributions of principal have been made from the Loan Group 1 Principal Distribution Amount to the Class A-PB Certificates and the Class A-1 Certificates as set forth in clauses (2) and (3) above, to distributions of principal to the Class A-2 Certificates in an amount (not to exceed the then outstanding Certificate Balance of the Class A-2 Certificates) equal to the remaining Loan Group 1 Principal Distribution Amount for such Distribution Date and, after |
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the Class A-1A Certificates have been retired, the Loan Group 2 Principal Distribution Amount remaining after payments to the Class A-1A Certificates have been made on such Distribution Date, in each case, less any portion thereof distributed in respect of the Class A-PB Certificates and the Class A-1 Certificates on such Distribution Date; |
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(5) | after distributions of principal have been made from the Loan Group 1 Principal Distribution Amount to the Class A-PB Certificates, the Class A-1 Certificates and the Class A-2 Certificates as set forth in clauses (2), (3) and (4) above, to distributions of principal, to the holders of the Class A-3 Certificates, in an amount (not to exceed the then outstanding Certificate Balance of the Class A-3 Certificates) equal to the remaining Loan Group 1 Principal Distribution Amount for such Distribution Date and, after the Class A-1A Certificates have been retired, the Loan Group 2 Principal Distribution Amount remaining after payments to the Class A-1A Certificates have been made on such Distribution Date, in each case, less any portion thereof distributed in respect of the Class A-PB Certificates, the Class A-1 Certificates and the Class A-2 Certificates on such Distribution Date; |
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(6) | after distributions of principal have been made from the Loan Group 1 Principal Distribution Amount to the Class A-PB Certificates, the Class A-1 Certificates, the Class A-2 Certificates, and the Class A-3 Certificates as set forth in clauses (2), (3), (4) and (5) above, to distributions of principal, to the holders of the Class A-4 Certificates, in an amount (not to exceed the then outstanding Certificate Balance of the Class A-4 Certificates) equal to the remaining Loan Group 1 Principal Distribution Amount for such Distribution Date and, after the Class A-1A Certificates have been retired, the Loan Group 2 Principal Distribution Amount remaining after payments to the Class A-1A Certificates have been made on such Distribution Date, in each case, less any portion thereof distributed in respect of the Class A-PB Certificates, the Class A-1 Certificates, the Class A-2 Certificates and the Class A-3 Certificates on such Distribution Date. |
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(7) | after distributions of principal have been made from the Loan Group 1 Principal Distribution Amount to the Class A-PB Certificates, the Class A-1 Certificates, the Class A-2 Certificates, the Class A-3 Certificates and the Class A-4 Certificates as set forth in clauses (2), (3), (4), (5) and (6) above, to distributions of principal to the holders of the Class A-PB Certificates in an amount (not to exceed the then outstanding Certificate Balance of the Class A-PB Certificates) equal to the remaining Loan Group 1 Principal Distribution Amount for such Distribution Date and, after the Class A-1A Certificates have been retired, the Loan Group 2 Principal Distribution Amount remaining after payments to the Class A-1A Certificates have been made on such Distribution Date, in each case, less any portion thereof distributed in respect of the Class A-PB Certificates, the Class A-1 Certificates, the Class A-2 Certificates, the Class A-3 Certificates and the Class A-4 Certificates on such Distribution Date; |
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(8) | after distributions of principal have been made from the Loan Group 1 Principal Distribution Amount to the Class A-PB Certificates, the Class A-1 Certificates, the Class A-2 Certificates, the Class A-3 Certificates and the Class A-4 Certificates as set forth in clauses (2), (3), (4), (5), (6) and (7) above, to distributions of principal to the holders of the Class A-5 Certificates, in an amount (not to exceed the then outstanding Certificate Balance of the Class A-5 Certificates) equal to the remaining Loan Group 1 Principal Distribution Amount for such Distribution Date and, after the Class A-1A Certificates have been retired, the Loan Group 2 Principal Distribution Amount remaining after payments to the Class A-1A Certificates have been made on such Distribution Date, in each case, less any portion thereof distributed in respect of the Class A-PB Certificates, the Class A-1 Certificates, the Class A-2 Certificates, the Class A-3 Certificates and the Class A-4 Certificates on such Distribution Date; |
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(9) | to distributions of principal to the holders of the Class A-1A Certificates in an amount (not to exceed the then outstanding Certificate Balance of the Class A-1A Certificates) equal to the Loan Group 2 Principal Distribution Amount for such Distribution and, after the Class A-PB Certificates, the Class A-1 Certificates, the Class A-2 Certificates, the Class A-3 Certificates, |
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the Class A-4 Certificates and the Class A-5 Certificates have been retired, the Loan Group 1 Principal Distribution Amount remaining after payments to the Class A-PB Certificates, Class A-1 Certificates, the Class A-2 Certificates, the Class A-3 Certificates, the Class A-4 Certificates and the Class A-5 Certificates have been made on such Distribution Date; |
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(10) | to distributions to the holders of the Class A-PB Certificates, the Class A-1 Certificates, the Class A-2 Certificates, the Class A-3 Certificates, the Class A-4 Certificates, the Class A-5 Certificates and the Class A-1A Certificates, pro rata, in accordance with the respective amounts of Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to such Classes of Certificates and for which no reimbursement has previously been received, to reimburse such holders for all such Realized Losses and Additional Trust Fund Expenses, if any; |
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(11) | to distributions of interest to the holders of the Class A-M Certificates, in an amount equal to all Distributable Certificate Interest in respect of such Class A-M Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates; |
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(12) | after all Classes of Certificates with an earlier priority of distribution have been retired, to distributions of principal to the holders of the Class A-M Certificates in an amount (not to exceed the then outstanding Certificate Balance of the Class A-M Certificates) equal to the Principal Distribution Amount in respect of such Class A-M Certificates for such Distribution Date, less any portion thereof distributed in respect of Classes of Certificates with an earlier priority of payment; |
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(13) | to distributions to the holders of the Class A-M Certificates to reimburse such holders for all Realized Losses and Additional Trust Fund Expenses, if any previously allocated to such Class of Certificates and for which no reimbursement has previously been received; |
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(14) | to distributions of interest to the holders of the Class A-J Certificates in an amount equal to all Distributable Certificate Interest in respect of such Class A-J Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates; |
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(15) | after all Classes of Certificates with an earlier priority of distribution have been retired, to distributions of principal to the holders of the Class A-J Certificates in an amount (not to exceed the then outstanding Certificate Balance of the Class A-J Certificates) equal to the Principal Distribution Amount in respect of such Class A-J Certificates for such Distribution Date, less any portion thereof distributed in respect of all Classes of Certificates with an earlier priority of payment; |
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(16) | to distributions to the holders of the Class A-J Certificates to reimburse such holders for all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to such Class of Certificates and for which no reimbursement has previously been received; |
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(17) | to distributions of interest to the holders of the Class B Certificates in an amount equal to all Distributable Certificate Interest in respect of such Class B Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates; |
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(18) | after all Classes of Certificates with an earlier priority of distribution have been retired, to distributions of principal to the holders of the Class B Certificates in an amount (not to exceed the then outstanding Certificate Balance of the Class B Certificates) equal to the Principal Distribution Amount in respect of such Class B Certificates for such Distribution Date, less any portion thereof distributed in respect of all Classes of Certificates with an earlier priority of distribution on such Distribution Date; |
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(19) | to distributions to the holders of the Class B Certificates to reimburse such holders for all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to such Class B Certificates and for which no reimbursement has previously been received; |
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(20) | to distributions of interest to the holders of the Class C Certificates in an amount equal to all Distributable Certificate Interest in respect of such Class C Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates; |
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(21) | after all Classes of Certificates with an earlier priority of distribution have been retired, to distributions of principal to the holders of the Class C Certificates in an amount (not to exceed the then outstanding Certificate Balance of the Class C Certificates) equal to the Principal Distribution Amount in respect of such Class C Certificates for such Distribution Date, less any portion thereof distributed in respect of all Classes of Certificates with an earlier priority of distribution on such Distribution Date; |
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(22) | to distributions to the holders of the Class C Certificates to reimburse such holders for all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to such Class C Certificates and for which no reimbursement has previously been received; |
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(23) | to distributions of interest to the holders of the Class D Certificates in an amount equal to all Distributable Certificate Interest in respect of such Class D Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates; |
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(24) | after all Classes of Certificates with an earlier priority of distribution have been retired, to distributions of principal to the holders of the Class D Certificates in an amount (not to exceed the then outstanding Certificate Balance of the Class D Certificates) equal to the Principal Distribution Amount in respect of such Class D Certificates for such Distribution Date, less any portion thereof distributed in respect of all Classes of Certificates with an earlier priority of distribution on such Distribution Date; |
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(25) | to distributions to the holders of the Class D Certificates to reimburse such holders for all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to such Class D Certificates and for which no reimbursement has previously been received; |
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(26) | to distributions of interest to the holders of the Class E Certificates in an amount equal to all Distributable Certificate Interest in respect of such Class E Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates; |
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(27) | after all Classes of Certificates with an earlier priority of distribution have been retired, to distributions of principal to the holders of the Class E Certificates in an amount (not to exceed the then outstanding Certificate Balance of the Class E Certificates) equal to the Principal Distribution Amount in respect of such Class E Certificates for such Distribution Date, less any portion thereof distributed in respect of all Classes of Certificates with an earlier priority of distribution on such Distribution Date; |
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(28) | to distributions to the holders of the Class E Certificates to reimburse such holders for all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to such Class E Certificates and for which no reimbursement has previously been received; |
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(29) | to distributions of interest to the holders of the Class F Certificates in an amount equal to all Distributable Certificate Interest in respect of such Class F Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates; |
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(30) | after all Classes of Certificates with an earlier priority of distribution have been retired, to distributions of principal to the holders of the Class F Certificates in an amount (not to exceed the then outstanding Certificate Balance of the Class F Certificates) equal to the Principal Distribution Amount in respect of such Class F Certificates for such Distribution Date, less any portion thereof distributed in respect of all Classes of Certificates with an earlier priority of distribution on such Distribution Date; |
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(31) | to distributions to the holders of the Class F Certificates to reimburse such holders for all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to such Class F Certificates and for which no reimbursement has previously been received; |
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(32) | to distributions of interest to the holders of the Class G Certificates in an amount equal to all Distributable Certificate Interest in respect of such Class G Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates; |
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(33) | after all Classes of Certificates with an earlier priority of distribution have been retired, to distributions of principal to the holders of the Class G Certificates in an amount (not to exceed the then outstanding Certificate Balance of the Class G Certificates) equal to the Principal Distribution Amount in respect of such Class G Certificates for such Distribution Date, less any portion thereof distributed in respect of all Classes of Certificates with an earlier priority of distribution on such Distribution Date; |
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(34) | to distributions to the holders of the Class G Certificates to reimburse such holders for all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to such Class G Certificates and for which no reimbursement has previously been received; |
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(35) | to distributions of interest to the holders of the Class H Certificates in an amount equal to all Distributable Certificate Interest in respect of such Class H Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates; |
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(36) | after all Classes of Certificates with an earlier priority of distribution have been retired, to distributions of principal to the holders of the Class H Certificates in an amount (not to exceed the then outstanding Certificate Balance of the Class H Certificates) equal to the Principal Distribution Amount in respect of such Class H Certificates for such Distribution Date, less any portion thereof distributed in respect of all Classes of Certificates with an earlier priority of distribution on such Distribution Date; |
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(37) | to distributions to the holders of the Class H Certificates to reimburse such holders for all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to such Class H Certificates and for which no reimbursement has previously been received; |
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(38) | to distributions of interest to the holders of the Class J Certificates in an amount equal to all Distributable Certificate Interest in respect of such Class J Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates; |
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(39) | after all Classes of Certificates with an earlier priority of distribution have been retired, to distributions of principal to the holders of the Class J Certificates in an amount (not to exceed the then outstanding Certificate Balance of the Class J Certificates) equal to the Principal Distribution Amount in respect of such Class J Certificates for such Distribution Date, less any portion thereof distributed in respect of all Classes of Certificates with an earlier priority of distribution on such Distribution Date; |
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(40) | to distributions to the holders of the Class J Certificates to reimburse such holders for all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to such Class J Certificates and for which no reimbursement has previously been received; |
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(41) | to distributions of interest to the holders of the Class K Certificates in an amount equal to all Distributable Certificate Interest in respect of such Class K Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates; |
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(42) | after all Classes of Certificates with an earlier priority of distribution have been retired, to distributions of principal to the holders of the Class K Certificates in an amount (not to exceed the then outstanding Certificate Balance of the Class K Certificates) equal to the Principal Distribution Amount in respect of such Class K Certificates for such Distribution Date, less any portion thereof distributed in respect of all Classes of Certificates with an earlier priority of distribution on such Distribution Date; |
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(43) | to distributions to the holders of the Class K Certificates to reimburse such holders for all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to such Class K Certificates and for which no reimbursement has previously been received; |
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(44) | to distributions of interest to the holders of the Class L Certificates in an amount equal to all Distributable Certificate Interest in respect of such Class L Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates; |
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(45) | after all Classes of Certificates with an earlier priority of distribution have been retired, to distributions of principal to the holders of the Class L Certificates in an amount (not to exceed the then outstanding Certificate Balance of the Class L Certificates) equal to the Principal Distribution Amount in respect of such Class L Certificates for such Distribution Date, less any portion thereof distributed in respect of all Classes of Certificates with an earlier priority of distribution on such Distribution Date; |
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(46) | to distributions to the holders of the Class L Certificates to reimburse such holders for all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to such Class L Certificates and for which no reimbursement has previously been received; |
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(47) | to distributions of interest to the holders of the Class M Certificates in an amount equal to all Distributable Certificate Interest in respect of such Class M Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates; |
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(48) | after all Classes of Certificates with an earlier priority of distribution have been retired, to distributions of principal to the holders of the Class M Certificates in an amount (not to exceed the then outstanding Certificate Balance of the Class M Certificates) equal to the Principal Distribution Amount in respect of such Class M Certificates for such Distribution Date, less any portion thereof distributed in respect of all Classes of Certificates with an earlier priority of distribution on such Distribution Date; |
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(49) | to distributions to the holders of the Class M Certificates to reimburse such holders for all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to such Class M Certificates and for which no reimbursement has previously been received; |
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(50) | to distributions of interest to the holders of the Class N Certificates in an amount equal to all Distributable Certificate Interest in respect of such Class N Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates; |
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(51) | after all Classes of Certificates with an earlier priority of distribution have been retired, to distributions of principal to the holders of the Class N Certificates in an amount (not to exceed the then outstanding Certificate Balance of the Class N Certificates) equal to the Principal Distribution Amount in respect of such Class N Certificates for such Distribution Date, less any portion thereof distributed in respect of all Classes of Certificates with an earlier priority of distribution on such Distribution Date; |
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(52) | to distributions to the holders of the Class N Certificates to reimburse such holders for all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to such Class N Certificates and for which no reimbursement has previously been received; |
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(53) | to distributions of interest to the holders of the Class O Certificates in an amount equal to all Distributable Certificate Interest in respect of such Class O Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates; |
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(54) | after all Classes of Certificates with an earlier priority of distribution have been retired, to distributions of principal to the holders of the Class O Certificates in an amount (not to exceed the then outstanding Certificate Balance of the Class O Certificates) equal to the Principal Distribution Amount in respect of such Class O Certificates for such Distribution Date, less any portion thereof distributed in respect of all Classes of Certificates with an earlier priority of distribution on such Distribution Date; |
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(55) | to distributions to the holders of the Class O Certificates to reimburse such holders for all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to such Class O Certificates and for which no reimbursement has previously been received; |
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(56) | to distributions of interest to the holders of the Class P Certificates in an amount equal to all Distributable Certificate Interest in respect of such Class P Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates; |
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(57) | after all Classes of Certificates with an earlier priority of distribution have been retired, to distributions of principal to the holders of the Class P Certificates in an amount (not to exceed the then outstanding Certificate Balance of the Class P Certificates) equal to the Principal Distribution Amount in respect of such Class P Certificates for such Distribution Date, less any portion thereof distributed in respect of all Classes of Certificates with an earlier priority of distribution on such Distribution Date; |
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(58) | to distributions to the holders of the Class P Certificates to reimburse such holders for all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to such Class P Certificates and for which no reimbursement has previously been received; |
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(59) | to distributions of interest to the holders of the Class Q Certificates in an amount equal to all Distributable Certificate Interest in respect of such Class Q Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates; |
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(60) | after all Classes of Certificates with an earlier priority of distribution have been retired, to distributions of principal to the holders of the Class Q Certificates in an amount (not to exceed the then outstanding Certificate Balance of the Class Q Certificates) equal to the Principal Distribution Amount in respect of such Class Q Certificates for such Distribution Date, less any portion thereof distributed in respect of all Classes of Certificates with an earlier priority of distribution on such Distribution Dates; |
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(61) | to distributions to the holders of the Class Q Certificates to reimburse such holders for all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to such Class P Certificates and for which no reimbursement has been previously been received; |
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(62) | to distributions of interest to the holders of the Class S Certificates in an amount equal to all Distributable Certificate Interest in respect of such Class S Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates; |
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(63) | after all Classes of Certificates with an earlier priority of distribution have been retired, to distributions of principal to the holders of the Class S Certificates in an amount (not to exceed the then outstanding Certificate Balance of the Class S Certificates) equal to the Principal Distribution Amount in respect of such Class S Certificates for such Distribution Date, less any portion thereof distributed in respect of all Classes of Certificates with an earlier priority of distribution on such Distribution Date; |
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(64) | to distributions to the holders of the Class S Certificates to reimburse such holders for all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to such Class of Certificates and for which no reimbursement has previously been received; and |
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(65) | to distributions to the holders of the REMIC Residual Certificates in an amount equal to the balance, if any, of the Available Distribution Amount remaining after the distributions to be made on such Distribution Date as described in clauses (1) through (64) above; |
provided that on each Distribution Date, if any, after the aggregate of the Certificate Balances of the Subordinate Certificates has been reduced to zero as a result of the allocations of Realized Losses and Additional Trust Fund Expenses, and in any event on the final Distribution Date in connection with a termination of the Trust Fund (see ‘‘—Termination’’ below), the payments of principal to be made as contemplated by clauses (3), (4), (5), (6), (7), (8) and (9) above with respect to the Class A-1 Certificates, the Class A-2 Certificates, the Class A-3 Certificates, the Class A-4 Certificates, the Class A-PB Certificates, the Class A-5 Certificates and the Class A-1A Certificates will be so made to the holders of the respective Classes of such Certificates which remain outstanding up to an amount equal to, and pro rata as among such Classes in accordance with, the respective then outstanding Certificate Balances of such Classes and without regard to the Principal Distribution Amount for such date.
Distributable Certificate Interest. The ‘‘Distributable Certificate Interest’’ equals with respect to each Class of Sequential Pay Certificates for each Distribution Date, the Accrued Certificate Interest in respect of such Class of Certificates for such Distribution Date, reduced (other than in the case of the Class X Certificates) (to not less than zero) by (i) such Class’s allocable share (calculated as described
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below) of the aggregate of any Prepayment Interest Shortfalls resulting from principal prepayments made on the Mortgage Loans during the related Collection Period that are not covered by the Master Servicer’s Compensating Interest Payment for such Distribution Date (the aggregate of such Prepayment Interest Shortfalls that are not so covered, as to such Distribution Date, the ‘‘Net Aggregate Prepayment Interest Shortfall’’) and (ii) any Certificate Deferred Interest allocated to such Class of REMIC Regular Certificates.
The ‘‘Accrued Certificate Interest’’ in respect of each Class of Sequential Pay Certificates for each Distribution Date will equal one month’s interest at the Pass-Through Rate applicable to such Class of Certificates for such Distribution Date accrued for the related Interest Accrual Period on the related Certificate Balance outstanding immediately prior to such Distribution Date. The Accrued Certificate Interest in respect of the Class X Certificates for any Distribution Date will equal the amount of one month’s interest at the related Pass-Through Rate on the Notional Amount of each Class of Class X Certificates, as the case may be, outstanding immediately prior to such Distribution Date. Accrued Certificate Interest will be calculated on a 30/360 basis.
The portion of the Net Aggregate Prepayment Interest Shortfall for any Distribution Date that is allocable to each Class of REMIC Regular Certificates will equal the product of (a) such Net Aggregate Prepayment Interest Shortfall, multiplied by (b) a fraction, the numerator of which is equal to the Accrued Certificate Interest in respect of such Class of Certificates for such Distribution Date, and the denominator of which is equal to the aggregate Accrued Certificate Interest in respect of all Classes of REMIC Regular Certificates for such Distribution Date.
Any such Prepayment Interest Shortfalls allocated to the Certificates, to the extent not covered by the Master Servicer’s related Compensating Interest Payment for such Distribution Date, will reduce the Distributable Certificate Interest as described above.
With respect to each Co-Lender Loan, Prepayment Interest Shortfalls will be allocated, first, to the related Subordinate Companion Loan, if any, and, second, to the related Mortgage Loan (and any related Pari Passu Companion Loan). The portion of such Prepayment Interest Shortfall allocated to the related Mortgage Loan, net of amounts payable, if any, to the Master Servicer, will be included in the Net Aggregate Prepayment Interest Shortfall. This allocation will cause a Prepayment Interest Shortfall with respect to the State Street Financial Center Whole Loan, which shall be allocated, pro rata, among the State Street Financial Center Pari Passu Companion Loan and the State Street Financial Center Loan, with any Prepayment Interest Shortfall allocated to the State Street Financial Center Loan, net of amounts payable to the LB-UBS 2007-C1 Master Servicer, to be included in the Net Aggregate Prepayment Interest Shortfall. This allocation will cause a Prepayment Interest Shortfall with respect to the Five Times Square Whole Loan, which shall be allocated, first to the Five Times Square Subordinate Companion Loan and then, pro rata, among the Five Times Square Pari Passu Companion Loan, if applicable, and the Five Times Square Loan, with any Prepayment Interest Shortfall allocated to the Five Times Square Loan, net of amounts payable to the Master Servicer, to be included in the Net Aggregate Prepayment Interest Shortfall. This allocation will cause a Prepayment Interest Shortfall with respect to the Peter Cooper Village & Stuyvesant Town Whole Loan, which shall be allocated, pro rata, among the Peter Cooper Village & Stuyvesant Town Future Pari Passu Companion Loan, if applicable, the Peter Cooper Village & Stuyvesant Town Loan and the Peter Cooper Village & Stuyvesant Town Pari Passu Companion Loans, with any Prepayment Interest Shortfall allocated to the Peter Cooper Village & Stuyvesant Town Loan, net of amounts payable to the Master Servicer, to be included in the Net Aggregate Prepayment Interest Shortfall. This allocation will cause a Prepayment Interest Shortfall with respect to the 485 Lexington Avenue Whole Loan, which shall be allocated, pro rata, among the 485 Lexington Avenue Pari Passu Companion Loan, if applicable, and the 485 Lexington Avenue Loan, with any Prepayment Interest Shortfall allocated to the 485 Lexington Avenue Loan, net of amounts payable to the Master Servicer, to be included in the Net Aggregate Prepayment Interest Shortfall.
Principal Distribution Amount. So long as the Class A-PB Certificates or Class A-5 Certificates and the Class A-1A Certificates remain outstanding, the Principal Distribution Amount for each Distribution Date will be calculated on a Loan Group by Loan Group basis (with respect to Loan Group 1, the ‘‘Loan Group 1 Principal Distribution Amount’’ and with respect to Loan Group 2, the ‘‘Loan Group 2 Principal
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Distribution Amount’’). On each Distribution Date after the Certificate Balances of (i) the Class A-PB Certificates and the Class A-5 Certificates or (ii) the Class A-1A Certificates have been reduced to zero, a single Principal Distribution Amount will be calculated in the aggregate for both Loan Groups. The ‘‘Principal Distribution Amount’’ for each Distribution Date with respect to a Loan Group or the Mortgage Pool will generally equal the aggregate of the following (without duplication) to the extent paid by the related borrower during the related Collection Period or advanced by the Master Servicer, the Trustee, the LB-UBS 2007-C1 Master Servicer or the LB-UBS 2007-C1 Trustee, as applicable:
(a) the aggregate of the principal portions of all Scheduled Payments (other than Balloon Payments) and of any Assumed Scheduled Payments due or deemed due, on or in respect of the Mortgage Loans in such Loan Group or the Mortgage Pool, as applicable, for their respective Due Dates occurring during the related Collection Period, to the extent not previously paid by the related borrower or advanced by the Master Servicer, the Trustee, the LB-UBS 2007-C1 Master Servicer or the LB-UBS 2007-C1 Trustee, as applicable, prior to such Collection Period;
(b) the aggregate of all principal prepayments received on the Mortgage Loans in such Loan Group or the Mortgage Pool, as applicable, during the related Collection Period;
(c) with respect to any Mortgage Loan in such Loan Group or the Mortgage Pool, as applicable, as to which the related stated maturity date occurred during or prior to the related Collection Period, any payment of principal made by or on behalf of the related borrower during the related Collection Period (including any Balloon Payment), net of any portion of such payment that represents a recovery of the principal portion of any Scheduled Payment (other than a Balloon Payment) due, or the principal portion of any Assumed Scheduled Payment deemed due, in respect of such Mortgage Loan on a Due Date during or prior to the related Collection Period and not previously recovered;
(d) the aggregate of the principal portion of all liquidation proceeds, insurance proceeds, condemnation awards and proceeds of repurchases of Mortgage Loans in such Loan Group or the Mortgage Pool, as applicable in the Mortgage Pool, and Substitution Shortfall Amounts with respect to Mortgage Loans in the Mortgage Pool or such Loan Group, as applicable, and, to the extent not otherwise included in clause (a), (b) or (c) above, payments and other amounts that were received on or in respect of Mortgage Loans in such Loan Group or the Mortgage Pool, as applicable, during the related Collection Period and that were identified and applied by the Master Servicer as recoveries of principal, in each case net of any portion of such amounts that represents a recovery of the principal portion of any Scheduled Payment (other than a Balloon Payment) due, or of the principal portion of any Assumed Scheduled Payment deemed due, in respect of the related Mortgage Loan on a Due Date during or prior to the related Collection Period and not previously recovered; and
(e) if such Distribution Date is subsequent to the initial Distribution Date, the excess, if any, of the Loan Group 1 Principal Distribution Amount, the Loan Group 2 Principal Distribution Amount and the Principal Distribution Amount, as the case may be, for the immediately preceding Distribution Date, over the aggregate distributions of principal made on the Certificates on such immediately preceding Distribution Date;
provided that the Principal Distribution Amount for any Distribution Date shall be reduced by the amount of any reimbursements of (i) nonrecoverable Advances plus interest on such nonrecoverable Advances that are paid or reimbursed from principal collections on the Mortgage Loans in a period during which such principal collections would have otherwise been included in the Principal Distribution Amount for such Distribution Date and (ii) Workout-Delayed Reimbursement Amounts plus interest on such amounts that are paid or reimbursed from principal collections on the Mortgage Loans in a period during which such principal collections would have otherwise been included in the Principal Distribution Amount for such Distribution Date; provided, further, in the case of clauses (i) and (ii) above, if any of the amounts that were reimbursed from principal collections on the Mortgage Loans are subsequently recovered on the related Mortgage Loan, such recovery will increase the Principal Distribution Amount for the Distribution Date related to the period in which such recovery occurs.
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Notwithstanding the foregoing, unless otherwise noted, where Principal Distribution Amount is used in this prospectus supplement without specific reference to any Loan Group, it refers to the Principal Distribution Amount with respect to the entire Mortgage Pool.
Class A-PB Planned Principal Balance. The ‘‘Class A-PB Planned Principal Balance’’ for any Distribution Date is the balance shown for such Distribution Date in the table set forth in Annex F to this prospectus supplement. Such balances were calculated using, among other things, the Table Assumptions. Based on these assumptions, the Certificate Balance of the Class A-PB Certificates on each Distribution Date would be reduced to the balance indicated for that Distribution Date on the table. There is no assurance, however, that the Mortgage Loans will perform in conformity with the Table Assumptions. Therefore, there can be no assurance that the balance of the Class A-PB Certificates on any Distribution Date will be equal to the balance that is specified for such Distribution Date in the table. In particular, once the Certificate Balances of the Class A-1A Certificates, the Class A-1 Certificates, the Class A-2 Certificates, the Class A-3 Certificates and the Class A-4 Certificates have been reduced to zero, any remaining portion on any Distribution Date of the Loan Group 1 Principal Distribution Amount and/or Loan Group 2 Principal Distribution Amount, as applicable, will be distributed on the Class A-PB Certificates until the Certificate Balance of the Class A-PB Certificates is reduced to zero.
The ‘‘Scheduled Payment’’ due on any Mortgage Loan on any related Due Date is the amount of the Periodic Payment (including Balloon Payments) that is or would have been, as the case may be, due thereon on such date, without regard to any waiver, modification or amendment of such Mortgage Loan granted or agreed to by the Special Servicer or otherwise resulting from a bankruptcy or similar proceeding involving the related borrower, without regard to the accrual of Additional Interest on or the application of any Excess Cash Flow to pay principal on an ARD Loan, without regard to any acceleration of principal by reason of default, and with the assumption that each prior Scheduled Payment has been made in a timely manner. The ‘‘Assumed Scheduled Payment’’ is an amount deemed due (i) on any Balloon Loan that is delinquent in respect of its Balloon Payment beyond the first Determination Date that follows its stated maturity date and (ii) on an REO Loan. The Assumed Scheduled Payment deemed due on any such Balloon Loan on its stated maturity date and on each successive related Due Date that it remains or is deemed to remain outstanding will equal the Scheduled Payment that would have been due thereon on such date if the related Balloon Payment had not come due but rather such Mortgage Loan had continued to amortize in accordance with such loan’s amortization schedule, if any, and to accrue interest at the Mortgage Rate in effect as of the Closing Date. The Assumed Scheduled Payment deemed due on any REO Loan on each Due Date that the related REO Property remains part of the Trust Fund will equal the Scheduled Payment that would have been due in respect of such Mortgage Loan on such Due Date had it remained outstanding (or, if such Mortgage Loan was a Balloon Loan and such Due Date coincides with or follows what had been its stated maturity date, the Assumed Scheduled Payment that would have been deemed due in respect of such Mortgage Loan on such Due Date had it remained outstanding).
Distributions of the Principal Distribution Amount will constitute the only distributions of principal on the Certificates. Reimbursements of previously allocated Realized Losses and Additional Trust Fund Expenses will not constitute distributions of principal for any purpose and will not result in an additional reduction in the Certificate Balance of the Class of Certificates in respect of which any such reimbursement is made.
Treatment of REO Properties. Notwithstanding that any Mortgaged Property (other than the Mortgaged Property related to the State Street Financial Center Loan) may be acquired as part of the Trust Fund through foreclosure, deed in lieu of foreclosure or otherwise, the related Mortgage Loan will be treated, for purposes of determining (i) distributions on the Certificates, (ii) allocations of Realized Losses and Additional Trust Fund Expenses to the Certificates, and (iii) the amount of Trustee Fees and Servicing Fees payable under the Pooling and Servicing Agreement, as having remained outstanding until such REO Property is liquidated. In connection therewith, operating revenues and other proceeds derived from such REO Property (net of related operating costs) will be ‘‘applied’’ by the Master Servicer as principal, interest and other amounts that would have been ‘‘due’’ on such Mortgage Loan, and the Master Servicer will be required to make P&I Advances in respect of such Mortgage Loan, in all cases as if such Mortgage Loan had remained outstanding. References to ‘‘Mortgage Loan’’ or ‘‘Mortgage Loans’’ in the
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definitions of ‘‘Principal Distribution Amount’’ and ‘‘Weighted Average Net Mortgage Rate’’ are intended to include any Mortgage Loan as to which the related Mortgaged Property has become an REO Property (an ‘‘REO Loan’’). For purposes of this paragraph, the term Mortgage Loan includes the Whole Loans.
Allocation of Prepayment Premiums and Yield Maintenance Charges. In the event a borrower is required to pay any Prepayment Premium or Yield Maintenance Charge, the amount of such payments actually collected (and, in the case of a Co-Lender Loan, payable with respect to the related Mortgage Loan pursuant to the related Intercreditor Agreement) will be distributed in respect of the Offered Certificates and the Class G Certificates, Class H Certificates, Class J Certificates and Class K Certificates as set forth below. ‘‘Yield Maintenance Charges’’ are fees paid or payable, as the context requires, as a result of a prepayment of principal on a Mortgage Loan, which fees have been calculated (based on Scheduled Payments on such Mortgage Loan) to compensate the holder of the Mortgage for reinvestment losses based on the value of a discount rate at or near the time of prepayment; provided that in most cases, a minimum fee is required by the Mortgage Loan documents (usually calculated as a percentage of the outstanding principal balance of the Mortgage Loan). Any other fees paid or payable, as the context requires, as a result of a prepayment of principal on a Mortgage Loan, which are calculated based upon a specified percentage (which may decline over time) of the amount prepaid are considered ‘‘Prepayment Premiums’’.
Any Prepayment Premiums or Yield Maintenance Charges collected on a Mortgage Loan during the related Collection Period will be distributed as follows: on each Distribution Date and with respect to the collection of any Prepayment Premiums or Yield Maintenance Charges on the Mortgage Loans, the holders of each Class of Offered Certificates and the Class G Certificates, Class H Certificates, Class J Certificates and Class K Certificates then entitled to distributions of principal with respect to the related Loan Group on such Distribution Date will be entitled to an amount of Prepayment Premiums or Yield Maintenance Charges equal to the product of (a) the amount of such Prepayment Premiums or Yield Maintenance Charges; (b) a fraction (which in no event may be greater than one), the numerator of which is equal to the excess, if any, of the Pass-Through Rate of such Class of Certificates over the relevant Discount Rate (as defined below), and the denominator of which is equal to the excess, if any, of the Mortgage Rate of the prepaid Mortgage Loan over the relevant Discount Rate; and (c) a fraction, the numerator of which is equal to the amount of principal distributable on such Class of Certificates on such Distribution Date with respect to the applicable Loan Group, and the denominator of which is the Principal Distribution Amount with respect to the applicable Loan Group for such Distribution Date.
If there is more than one such Class of Certificates entitled to distributions of principal with respect to the related Loan Group, as applicable, on any particular Distribution Date on which a Prepayment Premium or Yield Maintenance Charge is distributable, the aggregate amount of such Prepayment Premium or Yield Maintenance Charge will be allocated among all such Classes of Certificates up to, and on a pro rata basis in accordance with, their respective entitlements thereto in accordance with, the first sentence of this paragraph. The portion, if any, of the Prepayment Premiums or Yield Maintenance Charges remaining after any such payments described above will be distributed to the holders of the Class X-P, Class X-C and Class X-W Certificates as follows: (a) on or before the Distribution Date in March 2014, 7.0% to the holders of the Class X-P Certificates, 18.0% to the holders of the Class X-C Certificates and 75.0% to the holders of the Class X-W Certificates and (b) thereafter, 25.0% to the holders of the Class X-C Certificates and 75.0% to the holders of the Class X-W Certificates.
The ‘‘Discount Rate’’ applicable to any Class of Offered Certificates and the Class G Certificates, Class H Certificates, Class J Certificates and Class K Certificates will be equal to the discount rate stated in the related Mortgage Loan documents used in calculating the Yield Maintenance Charge with respect to such principal prepayment. To the extent that a discount rate is not stated therein, the Discount Rate will equal the yield (when compounded monthly) on the U.S. Treasury issue with a maturity date closest to the maturity date for the prepaid Mortgage Loan or REO Loan. In the event that there are two or more such U.S. Treasury issues (a) with the same coupon, the issue with the lowest yield will be utilized, and (b) with maturity dates equally close to the maturity date for the prepaid Mortgage Loan or REO Loan, the issue with the earliest maturity date will be utilized.
For an example of the foregoing allocation of Prepayment Premiums and Yield Maintenance Charges, see ‘‘SUMMARY OF PROSPECTUS SUPPLEMENT’’ in this prospectus supplement. The
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Depositor makes no representation as to the enforceability of the provision of any Mortgage Note requiring the payment of a Prepayment Premium or Yield Maintenance Charge, or of the collectibility of any Prepayment Premium or Yield Maintenance Charge. See ‘‘DESCRIPTION OF THE MORTGAGE POOL—Certain Terms and Conditions of the Mortgage Loans—Prepayment Provisions’’ in this prospectus supplement.
Distributions of Additional Interest. On each Distribution Date, any Additional Interest collected on an ARD Loan, (and, with respect to any Co-Lender Loan, payable on the related Mortgage Loan pursuant to the terms of the related Intercreditor Agreement) during the related Collection Period will be distributed to the holders of the Class Z Certificates. There can be no assurance that any Additional Interest will be collected on the ARD Loans.
Subordination; Allocation of Losses and Certain Expenses
The rights of holders of the Subordinate Certificates to receive distributions of amounts collected or advanced on the Mortgage Loans will be subordinated, to the extent described in this prospectus supplement, to the rights of holders of the Class A Certificates and the Class X Certificates and each other such Class of Subordinate Certificates, if any, with a higher payment priority. This subordination provided by the Subordinate Certificates is intended to enhance the likelihood of timely receipt by the holders of the Class A Certificates and the Class X Certificates of the full amount of Distributable Certificate Interest payable in respect of such Classes of Certificates on each Distribution Date, and the ultimate receipt by the holders of each Class of the Class A Certificates of principal in an amount equal to the entire related Certificate Balance. Similarly, but to decreasing degrees, this subordination is also intended to enhance the likelihood of timely receipt by the holders of the Class A-M Certificates, Class A-J Certificates, Class B Certificates, Class C Certificates, Class D Certificates, Class E Certificates and Class F Certificates of the full amount of Distributable Certificate Interest payable in respect of such Classes of Certificates on each Distribution Date and the ultimate receipt by the holders of such Certificates of, in the case of each such Class thereof, principal equal to the entire related Certificate Balance. The protection afforded (a) to the holders of the Class F Certificates by means of the subordination of the Non-Offered Certificates (other than the Class X Certificates), (b) to the holders of the Class E Certificates by means of the subordination of the Non-Offered Certificates (other than the Class X Certificates) and the Class F Certificates, (c) to the holders of the Class D Certificates by means of the subordination of the Class E Certificates, the Class F Certificates and the Non-Offered Certificates (other than the Class X Certificates), (d) to the holders of the Class C Certificates by means of the subordination of the Class D Certificates, the Class E Certificates, the Class F Certificates and the Non-Offered Certificates (other than the Class X Certificates), (e) to the holders of the Class B Certificates by means of the subordination of the Class C Certificates, the Class D Certificates, the Class E Certificates, the Class F Certificates and the Non-Offered Certificates (other than the Class X Certificates), (f) to the holders of the Class A-J Certificates, by means of the subordination of the Class B Certificates, the Class C Certificates, the Class D Certificates, the Class E Certificates, the Class F Certificates and the Non-Offered Certificates (other than the Class X Certificates), (g) to the holders of the Class A-M Certificates, by means of the subordination of the Class A-J Certificates, the Class B Certificates, the Class C Certificates, the Class D Certificates, the Class E Certificates, the Class F Certificates and the Non-Offered Certificates (other than the Class X Certificates) and (h) to the holders of the Class A Certificates and the Class X Certificates by means of the subordination of the Subordinate Certificates, will be accomplished by (i) the application of the Available Distribution Amount on each Distribution Date in accordance with the order of priority described under ‘‘—Distributions—Application of the Available Distribution Amount’’ above and (ii) the allocation of Realized Losses and Additional Trust Fund Expenses as described below. Until the first Distribution Date after the aggregate of the Certificate Balances of the Subordinate Certificates has been reduced to zero, the Class A-5 Certificates will receive principal payments only after the Certificate Balance of each of the Class A-1 Certificates, the Class A-2 Certificates, the Class A-3 Certificates, the Class A-4 Certificates and the Class A-PB Certificates has been reduced to zero, the Class A-PB will receive principal payments (other than planned principal payments as described in this prospectus supplement) only after the Certificate Balance of each of the Class A-1 Certificates, the Class A-2 Certificates, the Class A-3 Certificates and the Class A-4 Certificates has been reduced to zero, the Class A-4 Certificates will receive principal payments only after the Certificate
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Balance of each of the Class A-1 Certificates, the Class A-2 Certificates and the Class A-3 Certificates has been reduced to zero and the Certificate Balance of the Class A-PB Certificates has been reduced to Class A-PB Planned Principal Balance, the Class A-3 will receive principal payments only after the Certificate Balance of each of the Class A-1 Certificates and the Class A-2 Certificates has been reduced to zero and the Certificate Balance of the Class A-PB Certificates has been reduced to the Class A-PB Planned Principal Balance, the Class A-2 Certificates will receive principal payments only after the Certificate Balance of the Class A-1 Certificates has been reduced to zero and the Certificate Balance of the Class A-PB Certificates has been reduced to the Class A-PB Planned Principal Balance, and the Class A-1 Certificates will receive principal payments only after the Certificate Balance of the Class A-PB Certificates has been reduced to the Class A-PB Planned Principal Balance. However, after the Distribution Date on which the Certificate Balances of the Subordinate Certificates have been reduced to zero, the Class A Certificates, to the extent such Classes of Certificates remain outstanding, will bear shortfalls in collections and losses incurred in respect of the Mortgage Loans pro rata in respect of distributions of principal and then the Class A Certificates and Class X Certificates, to the extent such Classes remain outstanding, will bear such shortfalls pro rata in respect of distributions of interest. No other form of credit support will be available for the benefit of the holders of the Offered Certificates.
Allocation to the Class A Certificates, for so long as they are outstanding, of the entire Principal Distribution Amount with respect to the related Loan Group for each Distribution Date in accordance with the priorities described under ‘‘—Distributions—Application of the Available Distribution Amount’’ above will have the effect of reducing the aggregate Certificate Balance of the Class A Certificates at a proportionately faster rate than the rate at which the aggregate Stated Principal Balance of the Mortgage Pool will reduce. Thus, as principal is distributed to the holders of such Class A Certificates, the percentage interest in the Trust Fund evidenced by such Class A Certificates will be decreased (with a corresponding increase in the percentage interest in the Trust Fund evidenced by the Subordinate Certificates), thereby increasing, relative to their respective Certificate Balances, the subordination afforded such Class A Certificates by the Subordinate Certificates.
On each Distribution Date, following all distributions on the Certificates to be made on such date, the aggregate of all Realized Losses and Additional Trust Fund Expenses related to all Mortgage Loans (without regard to Loan Groups) that have been incurred since the Cut-Off Date through the end of the related Collection Period and that have not previously been allocated as described below will be allocated among the respective Classes of Sequential Pay Certificates (in each case, in reduction of their respective Certificate Balances) as follows, but, with respect to the Classes of Sequential Pay Certificates, in the aggregate only to the extent the aggregate Certificate Balance of all Classes of Sequential Pay Certificates remaining outstanding after giving effect to the distributions on such Distribution Date exceeds the aggregate Stated Principal Balance of the Mortgage Pool that will be outstanding immediately following such Distribution Date: first, to the Class S Certificates, until the remaining Certificate Balance of such Class of Certificates is reduced to zero; second, to the Class Q Certificates, until the remaining Certificate Balance of such Class of Certificates is reduced to zero; third, to the Class P Certificates, until the remaining Certificate Balance of such Class of Certificates is reduced to zero; fourth, to the Class O Certificates, until the remaining Certificate Balance of such Class of Certificates is reduced to zero; fifth, to the Class N Certificates, until the remaining Certificate Balance of such Class of Certificates is reduced to zero; sixth, to the Class M Certificates, until the remaining Certificate Balance of such Class of Certificates is reduced to zero; seventh, to the Class L Certificates, until the remaining Certificate Balance of such Class of Certificates is reduced to zero; eighth, to the Class K Certificates, until the remaining Certificate Balance of such Class of Certificates is reduced to zero; ninth, to the Class J Certificates, until the remaining Certificate Balance of such Class of Certificates is reduced to zero; tenth, to the Class H Certificates, until the remaining Certificate Balance of such Class of Certificates is reduced to zero; eleventh, to the Class G Certificates, until the remaining Certificate Balance of such Class of Certificates is reduced to zero; twelfth, to the Class F Certificates, until the remaining Certificate Balance of such Class of Certificates is reduced to zero; thirteenth, to the Class E Certificates, until the remaining Certificate Balance of such Class of Certificates is reduced to zero; fourteenth, to the Class D Certificates, until the remaining Certificate Balance of such Class of Certificates is reduced to zero; fifteenth, to the Class C Certificates, until the remaining Certificate Balance of such Class of Certificates is reduced to zero;
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sixteenth, to the Class B Certificates, until the remaining Certificate Balance of such Class of Certificates is reduced to zero; seventeenth, to the Class A-J Certificates, until the remaining Certificate Balance of such Class of Certificates is reduced to zero; eighteenth, to the Class A-M Certificates, until the remaining Certificate Balance of such Class of Certificates is reduced to zero; and last, to the Class A Certificates, pro rata, in proportion to their respective outstanding Certificate Balances, until the remaining Certificate Balances of such Classes of Certificates are reduced to zero.
Generally, any losses and expenses that are associated with the Co-Lender Loans with Subordinate Companion Loans will be allocated in accordance with the terms of the related Intercreditor Agreement first, to the related Subordinate Companion Loan and second, to other related Mortgage Loan. The portion of those losses and expenses allocated to each of the related Mortgage Loans will be allocated among the Certificates in the manner described above. Any losses and expenses with respect to the Peter Cooper Village & Stuyvesant Town Whole Loan will be allocated pro rata to the Peter Cooper Village & Stuyvesant Town Loan, and the Peter Cooper Village & Stuyvesant Town Pari Passu Companion Loans. Any losses and expenses with respect to the Five Times Square Whole Loan will be allocated, first, to the Five Time Square Subordinate Companion Loan, and then pro rata to the Five Times Square Loan, and the Five Times Square Pari Passu Companion Loan. Any losses and expenses with respect to the State Street Financial Center Whole Loan will be allocated pro rata to the State Street Financial Center Loan, and the State Street Financial Center Pari Passu Companion Loan. Any losses and expenses with respect to the 485 Lexington Avenue Whole Loan will be allocated pro rata to the 485 Lexington Avenue Loan, and the 485 Lexington Avenue Pari Passu Companion Loan.
‘‘Realized Losses’’ are losses arising from the inability to collect all amounts due and owing under any defaulted Mortgage Loan, including by reason of the fraud or bankruptcy of the borrower or a casualty of any nature at the related Mortgaged Property, to the extent not covered by insurance. The Realized Loss in respect of a liquidated Mortgage Loan is an amount generally equal to the excess, if any, of (a) the outstanding principal balance of such Mortgage Loan as of the date of liquidation, together with (i) all accrued and unpaid interest thereon to but not including the Due Date in the Collection Period in which the liquidation occurred (exclusive of any related default interest in excess of the Mortgage Rate, Additional Interest, Prepayment Premium or Yield Maintenance Charges) and (ii) certain related unreimbursed servicing expenses (including any unreimbursed interest on any Advances), over (b) the aggregate amount of liquidation proceeds, if any, recovered in connection with such liquidation. If any portion of the debt due under a Mortgage Loan (other than Additional Interest and default interest in excess of the Mortgage Rate) is forgiven, whether in connection with a modification, waiver or amendment granted or agreed to by the Special Servicer or in connection with the bankruptcy or similar proceeding involving the related borrower, the amount so forgiven also will be treated as a Realized Loss. The Realized Loss in respect of a Mortgage Loan for which a Final Recovery Determination has been made includes nonrecoverable Advances (in each case, including interest on that nonrecoverable Advance) to the extent amounts have been paid from the Principal Distribution Amount pursuant to the Pooling and Servicing Agreement.
‘‘Additional Trust Fund Expenses’’ include, among other things, (i) any Special Servicing Fees, Liquidation Fees, Determination Party fees (in certain circumstances) or Workout Fees paid to the Special Servicer, (ii) any interest paid to the Master Servicer and/or the Trustee in respect of unreimbursed Advances (to the extent not otherwise offset by penalty interest and late payment charges) and amounts payable to the Special Servicer in connection with certain inspections of Mortgaged Properties required pursuant to the Pooling and Servicing Agreement (to the extent not otherwise offset by penalty interest and late payment charges otherwise payable to the Special Servicer and received in the Collection Period during which such inspection related expenses were incurred) and (iii) any of certain unanticipated expenses of the Trust Fund, including certain indemnities and reimbursements to the Trustee of the type described under ‘‘DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS—Certain Matters Regarding the Trustee’’ in the accompanying prospectus, certain indemnities and reimbursements to the Master Servicer, the Special Servicer and the Depositor of the type described under ‘‘DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS— Certain Matters Regarding the Master Servicer and the Depositor’’ in the accompanying prospectus (the Special Servicer having the same rights to indemnity and reimbursement as described thereunder with
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respect to the Master Servicer), certain Rating Agency fees to the extent such fees are not paid by any other party and certain federal, state and local taxes and certain tax related expenses, payable from the assets of the Trust Fund and described under ‘‘MATERIAL FEDERAL INCOME TAX CONSEQUENCES—Federal Income Tax Consequences for REMIC Certificates—Taxation of Owners of REMIC Residual Certificates’’ and ‘‘—Prohibited Transactions Tax and Other Taxes’’ in the accompanying prospectus and ‘‘SERVICING OF THE MORTGAGE LOANS—Defaulted Mortgage Loans; REO Properties; Purchase Option’’ in this prospectus supplement. Additional Trust Fund Expenses will reduce amounts payable to Certificateholders and, subject to the distribution priorities described above, may result in a loss on one or more Classes of Offered Certificates.
P&I Advances
On or about each Distribution Date, the Master Servicer is obligated, subject to the recoverability determination described below (and any other applicable limitations), to make advances (each, a ‘‘P&I Advance’’) out of its own funds or, subject to the replacement thereof as provided in the Pooling and Servicing Agreement, from funds held in the Certificate Account that are not required to be distributed to Certificateholders (or paid to any other Person pursuant to the Pooling and Servicing Agreement) on such Distribution Date, in an amount that is generally equal to the aggregate of all Periodic Payments (other than Balloon Payments) and any Assumed Scheduled Payments, net of related Master Servicing Fees in respect of the Mortgage Loans (other than the State Street Financial Center Loan, as provided below, that are being serviced by the Master Servicer and the Special Servicer, as applicable and any REO Loans during the related Collection Period, in each case to the extent such amount was not paid by or on behalf of the related borrower or otherwise collected (or previously advanced by the Master Servicer) as of the close of business on the last day of the Collection Period. P&I Advances are intended to maintain a regular flow of scheduled interest and principal payments to the holders of the Class or Classes of Certificates entitled thereto, rather than to insure against losses. The Master Servicer’s obligations to make P&I Advances in respect of any Mortgage Loan, subject to the recoverability determination, will continue until liquidation of such Mortgage Loan or disposition of any REO Property acquired in respect thereof. However, if the Periodic Payment on any Mortgage Loan has been reduced in connection with a bankruptcy or similar proceeding or a modification, waiver or amendment granted or agreed to by the Special Servicer, the Master Servicer will be required to advance only the amount of the reduced Periodic Payment (net of related Servicing Fees) in respect of subsequent delinquencies. In addition, if it is determined that an Appraisal Reduction Amount exists with respect to any Required Appraisal Loan (as defined below), then, with respect to the Distribution Date immediately following the date of such determination and with respect to each subsequent Distribution Date for so long as such Appraisal Reduction Amount exists, the Master Servicer or the Trustee, as applicable will be required in the event of subsequent delinquencies to advance in respect of such Mortgage Loan only an amount equal to the sum of (i) the amount of the interest portion of the P&I Advance that would otherwise be required without regard to this sentence, minus the product of (a) such Appraisal Reduction Amount and (b) the per annum Pass-Through Rate (i.e., for any month, one twelfth of the Pass-Through Rate) applicable to the Class of Certificates, to which such Appraisal Reduction Amount is allocated as described in ‘‘—Appraisal Reductions’’ below and (ii) the amount of the principal portion of the P&I Advance that would otherwise be required without regard to this sentence. Pursuant to the terms of the Pooling and Servicing Agreement, if the Master Servicer fails to make a P&I Advance required to be made, the Trustee will then be required to make such P&I Advance, in each such case, subject to the recoverability standard described below. Neither the Master Servicer nor the Trustee will be required to make a P&I Advance or any other advance for any Balloon Payments, default interest, late payment charges, Prepayment Premiums, Yield Maintenance Charges or Additional Interest. Neither the Master Servicer nor the Trustee will be required to make any P&I Advance with respect to any Subordinate Companion Loan. Neither the Master Servicer nor the Trustee will be required to make any P&I Advances with respect to any Companion Loan. The Master Servicer and Trustee will be required to make P&I Advances with respect to the State Street Financial Center Loan, subject to the same limitations, and with the same rights, as described above.
The Master Servicer or the Trustee if the Master Servicer fails to do so, will be required to make P&I Advances with respect to the State Street Financial Center Loan under the Pooling and Servicing
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Agreement. If the Master Servicer fails to make the required P&I Advance, the Trustee is required to make such P&I Advance, subject to the same limitations, and with the same rights, as described above for the Master Servicer.
The Master Servicer (or the Trustee) is entitled to recover any P&I Advance made out of its own funds from any amounts collected in respect of the Mortgage Loan (net of related Master Servicing Fees with respect to collections of interest and net of related Liquidation Fees and Workout Fees with respect to collections of principal) as to which such P&I Advance was made whether such amounts are collected in the form of late payments, insurance and condemnation proceeds or liquidation proceeds, or any other recovery of the related Mortgage Loan or REO Property (‘‘Related Proceeds’’). Neither the Master Servicer nor the Trustee is obligated to make any P&I Advance that it or the Special Servicer determines, in accordance with the Servicing Standard (in the case of the Master Servicer and Special Servicer) or its good faith business judgment (in the case of the Trustee), would, if made, not be recoverable from Related Proceeds (a ‘‘Nonrecoverable P&I Advance’’), and the Master Servicer (or the Trustee) is entitled to recover, from general funds on deposit in the Certificate Account, any P&I Advance made that it determines to be a Nonrecoverable P&I Advance plus interest at the Reimbursement Rate. In addition, both the Master Servicer and the Trustee will be entitled to recover any Advance (together with interest thereon) that is outstanding at the time that the related Mortgage Loan is modified in connection with such Mortgage Loan becoming a Corrected Mortgage Loan and is not repaid in full in connection with such modification but instead becomes an obligation of the borrower to pay such amounts in the future (such Advance, a ‘‘Workout-Delayed Reimbursement Amount’’) out of principal collections in the Certificate Account. Any amount that constitutes all or a portion of any Workout-Delayed Reimbursement Amount may at any time be determined to constitute a nonrecoverable Advance and thereafter shall be recoverable as any other nonrecoverable Advance. A Workout-Delayed Reimbursement Amount will constitute a nonrecoverable Advance when the person making such determination, and taking into account factors such as all other outstanding Advances, either (a) has determined in accordance with the Servicing Standard (in the case of the Master Servicer or the Special Servicer) or its good faith business judgment (in the case of the Trustee) that such Workout-Delayed Reimbursement Amount would not ultimately be recoverable from Related Proceeds, or (b) has determined in accordance with the Servicing Standard (in the case of the Master Servicer or the Special Servicer) or its good faith business judgment (in the case of the Trustee) that such Workout-Delayed Reimbursement Amount, along with any other Workout-Delayed Reimbursement Amounts and nonrecoverable Advances, would not ultimately be recoverable out of principal collections in the Certificate Account. In addition, any such person may update or change its recoverability determinations (but not reverse any other person’s determination that an Advance is nonrecoverable) at any time and may obtain at the expense of the Trust Fund any analysis, appraisals or market value estimates or other information for such purposes. Absent bad faith, any such determination that an Advance is nonrecoverable will be conclusive and binding on the Certificateholders, the Master Servicer and the Trustee. Any requirement of the Master Servicer or the Trustee to make an Advance in the Pooling and Servicing Agreement is intended solely to provide liquidity for the benefit of the Certificateholders and not as credit support or otherwise to impose on any such person the risk of loss with respect to one or more Mortgage Loans. See ‘‘DESCRIPTION OF THE CERTIFICATES—Advances in Respect of Delinquencies’’ and ‘‘DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS—Certificate Account’’ in the accompanying prospectus.
In connection with the recovery by the Master Servicer or the Trustee of any P&I Advance made by it or the recovery by the Master Servicer or the Trustee of any reimbursable servicing expense (which may include nonrecoverable advances to the extent deemed to be in the best interest of the Certificateholders) incurred by it (each such P&I Advance or expense, an ‘‘Advance’’), the Master Servicer or the Trustee, as applicable, is entitled to be paid interest compounded annually at a per annum rate equal to the Reimbursement Rate. Such interest will be paid contemporaneously with the reimbursement of the related Advance first out of late payment charges and default interest received on the related Mortgage Loan in the Collection Period in which such reimbursement is made and then from general collections on the Mortgage Loans then on deposit in the Certificate Account; provided, however, no P&I Advance shall accrue interest until after the expiration of any applicable grace period for the related Periodic Payment.
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In addition, to the extent the Master Servicer receives late payment charges or default interest on a Mortgage Loan for which interest on Advances related to such Mortgage Loan has been paid from general collections on deposit in the Certificate Account and not previously reimbursed to the Trust Fund, such late payment charges or default interest will be used to reimburse the Trust Fund for such payment of interest. The ‘‘Reimbursement Rate’’ is equal to the ‘‘prime rate’’ published in the ‘‘Money Rates’’ Section of The Wall Street Journal, as such ‘‘prime rate’’ may change from time to time, accrued on the amount of such Advance from the date made to but not including the date of reimbursement. To the extent not offset or covered by amounts otherwise payable on the Non-Offered Certificates, interest accrued on outstanding Advances will result in a reduction in amounts payable on the Offered Certificates, subject to the distribution priorities described in this prospectus supplement.
Upon a determination that a previously made Advance is not recoverable, instead of obtaining reimbursement out of general collections immediately, the Master Servicer or the Trustee, as applicable, may, in its sole discretion, elect to obtain reimbursement for such nonrecoverable Advance over time (not to exceed 12 months or such longer period of time as agreed to by the Master Servicer and the Controlling Class Representative, each in its sole discretion) and the unreimbursed portion of such Advance will accrue interest at the prime rate. At any time after such a determination to obtain reimbursement over time, the Master Servicer, the Special Servicer or the Trustee, as applicable, may, in its sole discretion, decide to obtain reimbursement immediately. The fact that a decision to recover such nonrecoverable Advances over time, or not to do so, benefits some Classes of Certificateholders to the detriment of other Classes shall not, with respect to the Master Servicer or the Special Servicer, constitute a violation of the Servicing Standard or contractual duty under the Pooling and Servicing Agreement and/or with respect to the Trustee, constitute a violation of any fiduciary duty to Certificateholders or contractual duty under the Pooling and Servicing Agreement. In the event that the Master Servicer or the Trustee, as applicable, elects not to recover such non-recoverable advances over time, the Master Servicer or the Trustee, as applicable, will be required to give S&P, Moody’s and Fitch at least 15 days notice prior to any such reimbursement to it of nonrecoverable Advances from amounts in the Certificate Account allocable to interest on the Mortgage Loans, unless the Master Servicer or the Trustee, as applicable, makes a determination not to give such notice in accordance with the terms of the Pooling and Servicing Agreement.
If the Master Servicer, the Trustee or the Special Servicer, as applicable, reimburses itself out of general collections on the Mortgage Pool for any Advance that it has determined is not recoverable out of collections on the related Mortgage Loan or reimburses itself out of general collections, related to principal only, on the Mortgage Pool for any Workout-Delayed Reimbursement Amount, then that Advance or Workout-Delayed Reimbursement Amount (together, in each case, with accrued interest thereon) will be deemed, to the fullest extent permitted pursuant to the terms of the Pooling and Servicing Agreement, to be reimbursed first out of the Principal Distribution Amount otherwise distributable on the applicable Certificates (prior to, in the case of nonrecoverable Advances only, being deemed reimbursed out of payments and other collections of interest on the underlying Mortgage Loans otherwise distributable on the applicable Certificates), thereby reducing the Principal Distribution Amount of such Certificates. To the extent any Advance is determined to be nonrecoverable and to the extent of each Workout-Delayed Reimbursement Amount, if the Advance or Workout-Delayed Reimbursement Amount is reimbursed out of the Principal Distribution Amount as described above and the item for which the Advance or Workout-Delayed Reimbursement Amount was originally made is subsequently collected from payments or other collections on the related Mortgage Loan, then the Principal Distribution Amount for the Distribution Date corresponding to the Collection Period in which this item was recovered will be increased by the lesser of (a) the amount of the item and (b) any previous reduction in the Principal Distribution Amount for a prior Distribution Date pursuant to this paragraph.
Appraisal Reductions
Other than with respect to the State Street Financial Center Loan, upon the earliest of the date (each such date, a ‘‘Required Appraisal Date’’) that (1) any Mortgage Loan is 60 days delinquent in respect of any Periodic Payments, (2) any REO Property is acquired on behalf of the Trust Fund in respect of any Mortgage Loan, (3) any Mortgage Loan has been modified by the Special Servicer to reduce the amount
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of any Periodic Payment, other than a Balloon Payment, (4) a receiver is appointed and continues in such capacity in respect of the related Mortgaged Property, (5) a borrower with respect to any Mortgage Loan becomes subject to any bankruptcy proceeding, (6) a Balloon Payment with respect to any Mortgage Loan has not been paid on its scheduled maturity date; provided, however, if the borrower continues to make its Assumed Scheduled Payment and diligently pursues refinancing, such Mortgage Loan will not become a Required Appraisal Loan until 60 days following such default or, if the Master Servicer has, within 60 days after the Due Date of such Balloon Payment, received written evidence from an institutional lender of such lender’s binding commitment (which is reasonably acceptable to the Special Servicer and the Controlling Class Representative has given its consent (which consent shall be deemed denied if not granted within 10 Business Days)) to refinance such Mortgage Loan, 120 days following such default (provided that if such refinancing does not occur during such time specified in the commitment, the related Mortgage Loan will immediately become a Required Appraisal Loan) or (7) any Mortgage Loan is outstanding 60 days after the third anniversary of an extension of its scheduled maturity date (each such Mortgage Loan, including an REO Loan, a ‘‘Required Appraisal Loan’’), the Special Servicer is required to obtain (within 60 days of the applicable Required Appraisal Date) an appraisal of the related Mortgaged Property prepared in accordance with 12 CFR Section 225.62 and conducted in accordance with the standards of the Appraisal Institute by a Qualified Appraiser (or with respect to any Mortgage Loan with an outstanding principal balance less than $2 million, an internal valuation performed by the Special Servicer), unless such an appraisal had previously been obtained within the prior twelve months. A ‘‘Qualified Appraiser’’ is an independent appraiser, selected by the Special Servicer or the Master Servicer, that is a member in good standing of the Appraisal Institute, and that, if the state in which the subject Mortgaged Property is located certifies or licenses appraisers, is certified or licensed in such state, and in each such case, who has a minimum of five years experience in the subject property type and market. The cost of such appraisal will be advanced by the Master Servicer, subject to the Master Servicer’s right to be reimbursed therefor out of Related Proceeds or, if not reimbursable therefrom, out of general funds on deposit in the Certificate Account. As a result of any such appraisal, it may be determined that an ‘‘Appraisal Reduction Amount’’ exists with respect to the related Required Appraisal Loan, such determination to be made by the Master Servicer on a monthly basis as described below. The Appraisal Reduction Amount for any Required Appraisal Loan will be calculated by the Master Servicer and will equal the excess, if any, of (a) the sum (without duplication), as of the first Determination Date immediately succeeding the Master Servicer’s obtaining knowledge of the occurrence of the Required Appraisal Date if no new appraisal is required or the date on which the appraisal or internal valuation, if applicable, is obtained and each Determination Date thereafter so long as the related Mortgage Loan remains a Required Appraisal Loan, of (i) the Stated Principal Balance of such Required Appraisal Loan and any Companion Loans related thereto, (ii) to the extent not previously advanced by or on behalf of the Master Servicer or the Trustee, all unpaid interest on the Required Appraisal Loan and any related Companion Loans, through the most recent Due Date prior to such Determination Date at a per annum rate equal to the related Net Mortgage Rate for the Required Appraisal Loan and the related fixed annualized rate of interest scheduled to accrue for the related Companion Loans (exclusive of any portion thereof that constitutes Additional Interest), (iii) all accrued but unpaid Servicing Fees and all accrued but unpaid Additional Trust Fund Expenses in respect of such Required Appraisal Loan and any related Companion Loans, plus, with respect to any Pari Passu Companion Loan (other than the State Street Financial Center Pari Passu Companion Loan), similar fees and expenses, (iv) all related unreimbursed Advances (plus accrued interest thereon) made by or on behalf of the Master Servicer, the Special Servicer or the Trustee with respect to such Required Appraisal Loan and any related Companion Loan and (v) all currently due and unpaid real estate taxes and reserves owed for improvements and assessments, insurance premiums, and, if applicable, ground rents in respect of the related Mortgaged Property, over (b) an amount equal to the sum of (i) all escrows, reserves and letters of credit held for the purposes of reserves (provided that such letters of credit may be drawn upon for reserve purposes under the related Mortgage Loan documents) held with respect to such Required Appraisal Loan, plus (ii) 90% of the appraised value (net of any prior liens and estimated liquidation expenses) of the related Mortgaged Property as determined by such appraisal less any downward adjustments made by the Special Servicer (without implying any obligation to do so) based upon its review of the Appraisal and such other information as the Special Servicer deems appropriate. If the Special Servicer has not obtained a new
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appraisal (or performed an internal valuation, if applicable) within the time limit described above, the Appraisal Reduction Amount for the related Mortgage Loan will equal 25% of the principal balance of such Mortgage Loan, to be adjusted upon receipt of the new appraisal (or internal valuation, if applicable).
As a result of calculating an Appraisal Reduction Amount with respect to a Mortgage Loan, the interest portion of a P&I Advance for such Mortgage Loan for the related Distribution Date will be reduced, which will have the effect of reducing the amount of interest available for distribution to the Subordinate Certificates in reverse order of entitlement to distribution with respect to such Classes. See ‘‘—P&I Advances’’ above. Any such Appraisal Reduction Amounts on Mortgage Loans with Subordinate Companion Loans will generally be allocated first, to the Subordinate Companion Loan, and second, to the related Mortgage Loan. For the purpose of calculating P&I Advances only, the aggregate Appraisal Reduction Amounts will be allocated to the Certificate Balance of each Class of Sequential Pay Certificates in reverse order of payment priorities. With respect to the State Street Financial Center Loan, the appraisal reduction amount will be calculated under the LB-UBS 2007-C1 Pooling and Servicing Agreement in a manner generally the same as an Appraisal Reduction Amount as described above. ‘‘—Servicing of the State Street Financial Center Loan’’ in this prospectus supplement.
Reports to Certificateholders; Available Information
Trustee Reports. Based solely on information provided in monthly reports prepared by the Master Servicer and the Special Servicer (and subject to the limitations with respect thereto) and delivered to the Trustee, the Trustee is required to provide or make available electronically (on the Trustee’s internet website initially located at www.ctslink.com) on each Distribution Date to the general public:
(a) A statement (a ‘‘Distribution Date Statement’’), substantially in the form of Annex C to this prospectus supplement, setting forth, among other things, for each Distribution Date:
(i) the amount of the distribution to the holders of each Class of REMIC Regular Certificates in reduction of the Certificate Balance thereof;
(ii) the amount of the distribution to the holders of each Class of REMIC Regular Certificates allocable to Distributable Certificate Interest and the applicable Interest Distribution Amount;
(iii) the amount of the distribution to the holders of each Class of REMIC Regular Certificates allocable to Prepayment Premiums and Yield Maintenance Charges;
(iv) the amount of the distribution to the holders of each Class of REMIC Regular Certificates in reimbursement of previously allocated Realized Losses and Additional Trust Fund Expenses;
(v) the Available Distribution Amount for such Distribution Date;
(vi) (a) the aggregate amount of P&I Advances made in respect of such Distribution Date with respect to the Mortgage Pool and each Loan Group, and (b) the aggregate amount of servicing advances with respect to the Mortgage Pool and each Loan Group as of the close of business on the related Determination Date;
(vii) the aggregate unpaid principal balance of the Mortgage Pool and each Loan Group outstanding as of the close of business on the related Determination Date;
(viii) the aggregate Stated Principal Balance of the Mortgage Pool and each Loan Group outstanding immediately before and immediately after such Distribution Date;
(ix) the number, aggregate unpaid principal balance, weighted average remaining term to maturity or Anticipated Repayment Date and weighted average Mortgage Rate of the Mortgage Loans in the Mortgage Pool and each Loan Group as of the close of business on the related Determination Date;
(x) the number of Mortgage Loans and the aggregate Stated Principal Balance (immediately after such Distribution Date) of the Mortgage Loans (a) delinquent 30-59 days,
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(b) delinquent 60-89 days, (c) delinquent 90 days or more, (d) as to which foreclosure proceedings have been commenced and (e) with respect to each Specially Serviced Mortgage Loan, the Mortgaged Property type and a brief description of the reason for delinquency and the Mortgage Loan’s status, if known by the Master Servicer or Special Servicer, as applicable, and provided to the Trustee;
(xi) as to each Mortgage Loan referred to in the preceding clause (x) above: (a) the loan number thereof, (b) the Stated Principal Balance thereof immediately following such Distribution Date and (c) a brief description of any loan modification;
(xii) with respect to any Mortgage Loan as to which a liquidation event occurred during the related Collection Period (other than a payment in full), (a) the loan number thereof, (b) the aggregate of all liquidation proceeds and other amounts received in connection with such liquidation event (separately identifying the portion thereof allocable to distributions on the Certificates), and (c) the amount of any Realized Loss in connection with such liquidation event;
(xiii) with respect to any REO Property included in the Trust Fund as to which the Special Servicer has determined, in accordance with the Servicing Standard, that all payments or recoveries with respect to such property have been ultimately recovered (a ‘‘Final Recovery Determination’’) was made during the related Collection Period, (a) the loan number of the related Mortgage Loan, (b) the aggregate of all liquidation proceeds and other amounts received in connection with such Final Recovery Determination (separately identifying the portion thereof allocable to distributions on the Certificates), and (c) the amount of any Realized Loss in respect of the related REO Property in connection with such Final Recovery Determination;
(xiv) the Accrued Certificate Interest in respect of each Class of REMIC Regular Certificates for such Distribution Date;
(xv) any unpaid Distributable Certificate Interest in respect of each Class of REMIC Regular Certificates after giving effect to the distributions made on such Distribution Date;
(xvi) the Pass-Through Rate for each Class of REMIC Regular Certificates for such Distribution Date;
(xvii) the Principal Distribution Amount;
(xviii) the Principal Distribution Amount, the Loan Group 1 Principal Distribution Amount and the Loan Group 2 Principal Distribution Amount for such Distribution Date (and, in the case of any principal prepayment or other unscheduled collection of principal received during the related Collection Period, the loan number for the related Mortgage Loan and the amount of such prepayment or other collection of principal);
(xix) the aggregate of all Realized Losses incurred during the related Collection Period and all Additional Trust Fund Expenses incurred during the related Collection Period;
(xx) the aggregate of all Realized Losses and Additional Trust Fund Expenses that were allocated to each Class of Certificates on such Distribution Date;
(xxi) the Certificate Balance of each Class of REMIC Regular Certificates (other than the Class X-P Certificates, the Class X-C Certificates and the Class X-W Certificates) and the Notional Amount of each Class of Class X Certificates immediately before and immediately after such Distribution Date, separately identifying any reduction therein due to the allocation of Realized Losses and Additional Trust Fund Expenses on such Distribution Date;
(xxii) the certificate factor for each Class of REMIC Regular Certificates immediately following such Distribution Date;
(xxiii) the aggregate amount of interest on P&I Advances paid to the Master Servicer or the Trustee with respect to the Mortgage Pool and on an aggregate basis with respect to each Loan Group during the related Collection Period;
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(xxiv) the aggregate amount of interest on servicing advances paid to the Master Servicer, the Special Servicer and the Trustee (or the LB-UBS 2007-C1 Master Servicer) with respect to the Mortgage Pool and each on an aggregate basis with respect to Loan Group during the related Collection Period;
(xxv) the aggregate amount of servicing fees and Trustee Fees paid to the Master Servicer, the Special Servicer and the Trustee, as applicable, during the related Collection Period;
(xxvi) the loan number for each Required Appraisal Loan and any related Appraisal Reduction Amount as of the related Determination Date;
(xxvii) the loan number for each Mortgage Loan which has experienced a material modification, extension or waiver;
(xxviii) the loan number for each Mortgage Loan which has experienced a breach of the representations and warranties given with respect to a Mortgage Loan by the applicable Mortgage Loan Seller, as provided by the Master Servicer or the Depositor;
(xxix) the original and, thereafter, the current credit support levels for each Class of REMIC Regular Certificates;
(xxx) the original and, thereafter, the current ratings for each Class of REMIC Regular Certificates;
(xxxi) the aggregate amount of Prepayment Premiums and Yield Maintenance Charges collected with respect to the Mortgage Pool and each Loan Group during the related Collection Period;
(xxxii) the amounts, if any, actually distributed with respect to the Class R-I Certificates, Class R-II Certificates and Class Z Certificates on such Distribution Date; and
(xxxiii) the value of any REO Property included in the Trust Fund as of the end of the Collection Period, based on the most recent appraisal or valuation.
(b) A ‘‘CMSA Loan Periodic Update File’’ and a ‘‘CMSA Property File’’ (in electronic form and substance as provided by the Master Servicer and/or the Special Servicer) setting forth certain information (with respect to CMSA Loan Periodic Update File, as of the related Determination Date) with respect to the Mortgage Loans and the Mortgaged Properties, respectively.
(c) A ‘‘CMSA Collateral Summary File’’ and a ‘‘CMSA Bond File’’ setting forth certain information with respect to the Mortgage Loans and the Certificates, respectively.
(d) A ‘‘CMSA Reconciliation of Funds Report’’ setting forth certain information with respect to the Mortgage Loans and the Certificates.
Copies of each Distribution Date Statement will be filed with the Securities and Exchange Commission (‘‘SEC’’) through its EDGAR system located at www.sec.gov under the name of the Issuing Entity for so long as the Issuing Entity is subject to the reporting requirement of the Securities Exchange Act of 1934, as amended. The public also may read and copy any materials filed with the SEC at its Public Reference Room located at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
The Master Servicer and/or the Special Servicer is required to deliver (in electronic format acceptable to the Trustee and Master Servicer) to the Trustee prior to each Distribution Date and the Trustee is required to provide or make available electronically to each Certificateholder, the Depositor, the Underwriters and each Rating Agency on each Distribution Date, the following reports:
(a) CMSA Delinquent Loan Status Report;
(b) CMSA Historical Loan Modification and Corrected Mortgage Loan Report;
(c) CMSA REO Status Report;
(d) CMSA Servicer Watch List/Portfolio Review Guidelines;
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(e) CMSA Operating Statement Analysis Report;
(f) CMSA NOI Adjustment Worksheet;
(g) CMSA Comparative Financial Status Report;
(h) CMSA Loan Level Reserve/LOC Report; and
(i) CMSA Advance Recovery Report.
Each of the reports referenced as CMSA reports will be in the form prescribed in the standard Commercial Mortgage Securities Association (‘‘CMSA’’) investor reporting package. Forms of these reports are available at the CMSA’s website located at www.cmbs.org.
The reports identified in clauses (a), (b), (c), (h) and (i) above are referred to in this prospectus supplement as the ‘‘Unrestricted Servicer Reports’’, and the reports identified in clauses (d), (e), (f) and (g) above are referred to in this prospectus supplement as the ‘‘Restricted Servicer Reports’’.
In addition, within a reasonable period of time after the end of each calendar year, the Trustee is required to send to each person who at any time during the calendar year was a Certificateholder of record, a report summarizing on an annual basis (if appropriate) certain items provided to Certificateholders in the monthly Distribution Date Statements and such other information as may be required to enable such Certificateholders to prepare their federal income tax returns. Such information is required to include the amount of original issue discount accrued on each Class of Certificates and information regarding the expenses of the Trust Fund. Such requirements shall be deemed to be satisfied to the extent such information is provided pursuant to applicable requirements of the Code in force from time to time.
The information that pertains to Specially Serviced Mortgage Loans reflected in reports will be based solely upon the reports delivered by the Special Servicer or the Master Servicer to the Trustee prior to the related Distribution Date. Absent manifest error, none of the Master Servicer, the Special Servicer or the Trustee will be responsible for the accuracy or completeness of any information supplied to it by a mortgagor or third-party that is included in any reports, statements, materials or information prepared or provided by the Master Servicer, the Special Servicer or the Trustee, as applicable.
The Trustee is responsible for the preparation of tax returns on behalf of the Trust Fund and the preparation of monthly reports on Form 10-D (based on information included in the monthly Distribution Date Statements and other information provided by other transaction parties) and annual reports on Form 10-K that are required to be filed with the SEC on behalf of the Trust Fund.
The Trustee will make the Distribution Date Statement available each month to the general public via the Trustee’s internet website. The Trustee will also make the periodic reports described in the prospectus under ‘‘WHERE YOU CAN FIND MORE INFORMATION’’ and ‘‘INCORPORATION OF CERTAIN INFORMATION BY REFERENCE’’ relating to the Issuing Entity available through its website on the same date they are filed with the SEC. The Trustee’s internet website will initially be located at www.ctslink.com. Assistance in using the website can be obtained by calling the Trustee’s customer service desk at (301) 815-6600. Parties that are unable to use the website are entitled to have a paper copy mailed to them at no charge via first class mail by calling the customer service desk.
Book-Entry Certificates. Until such time as definitive Offered Certificates are issued in respect of the Book-Entry Certificates, the foregoing information will be available to the holders of the Book-Entry Certificates only to the extent it is forwarded by or otherwise available through DTC and its Participants. Any beneficial owner of a Book-Entry Certificate who does not receive information through DTC or its Participants may request that the Trustee reports be mailed directly to it by written request to the Trustee (accompanied by evidence of such beneficial ownership) at the Corporate Trust Office of the Trustee. The manner in which notices and other communications are conveyed by DTC to its Participants, and by its Participants to the holders of the Book-Entry Certificates, will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. The Master Servicer, the Special Servicer, the Trustee and the Depositor are required to recognize as Certificateholders only those persons in whose names the Certificates are registered on the books and records of the Certificate Registrar.
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Information Available Electronically. On or prior to each Distribution Date, the Trustee will make available to the general public via its internet website, initially located at www.ctslink.com, (i) the related Distribution Date Statement, (ii) the CMSA Loan Periodic Update File, CMSA Loan Setup File, CMSA Bond File and CMSA Collateral Summary File, (iii) the Unrestricted Servicer Reports, (iv) as a convenience for the general public (and not in furtherance of the distribution thereof under the securities laws), this prospectus supplement, the accompanying prospectus and the Pooling and Servicing Agreement, and (v) any other items at the request of the Depositor.
In addition, on each Distribution Date, the Trustee will make available via its internet website, on a restricted basis, (i) the Restricted Servicer Reports and (ii) the CMSA Property File. The Trustee shall provide access to such restricted reports, upon receipt of a certification in the form attached to the Pooling and Servicing Agreement, to Certificate Owners and prospective transferees, and upon request to any other Privileged Person and to any other person upon the direction of the Depositor.
The Trustee and Master Servicer make no representations or warranties as to the accuracy or completeness of any report, document or other information made available on its internet website and assumes no responsibility therefor. In addition, the Trustee and the Master Servicer may disclaim responsibility for any information distributed by the Trustee or the Master Servicer, as the case may be, for which it is not the original source.
The Master Servicer may make available each month via the Master Servicer’s internet website, initially located at www.wachovia.com (i) to any interested party, the Unrestricted Servicer Reports, the CMSA Loan Setup File and the CMSA Loan Periodic Update File, and (ii) to any Privileged Person, with the use of a password provided by the Master Servicer to such Privileged Person, the Restricted Servicer Reports and the CMSA Property File. For assistance with the Master Servicer’s internet website, investors may call (800) 326-1334.
‘‘Privileged Person’’ means any Certificateholder or any person identified to the Trustee or the Master Servicer, as applicable, as a prospective transferee of an Offered Certificate or any interests therein (that, with respect to any such holder or Certificate Owner or prospective transferee, has provided to the Trustee or the Master Servicer, as applicable, a certification in the form attached to the Pooling and Servicing Agreement), any Rating Agency, the Mortgage Loan Sellers, any holder of a Companion Loan, the Depositor and its designees, the Underwriters or any party to the Pooling and Servicing Agreement.
In connection with providing access to the Trustee’s internet website or the Master Servicer’s internet website, the Trustee or the Master Servicer, as applicable, may require registration and the acceptance of a disclaimer. Neither the Trustee nor the Master Servicer shall be liable for the dissemination of information in accordance with the Pooling and Servicing Agreement.
Other Information. The Pooling and Servicing Agreement requires that the Master Servicer or the Special Servicer make available at its offices primarily responsible for administration of the Trust Fund, during normal business hours, or send the requesting party at the expense of such requesting party, for review by any holder or Certificate Owner owning an Offered Certificate or an interest therein or any person identified by the Trustee to the Master Servicer or Special Servicer, as the case may be, as a prospective transferee of an Offered Certificate or an interest therein, originals or copies of, among other things, the following items: (a) the Pooling and Servicing Agreement and any amendments thereto, (b) all Distribution Date Statements delivered to holders of the relevant Class of Offered Certificates since the Closing Date, (c) all officers’ certificates delivered by the Master Servicer since the Closing Date as described under ‘‘DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS—Evidence as to Compliance’’ in the accompanying prospectus, (d) all accountants’ reports delivered with respect to the Master Servicer since the Closing Date as described under ‘‘DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS—Evidence as to Compliance’’ in the accompanying prospectus, (e) the most recent property inspection report prepared by or on behalf of the Master Servicer in respect of each Mortgaged Property, (f) the most recent Mortgaged Property annual operating statements and rent roll, if any, collected by or on behalf of the Master Servicer, (g) any and all modifications, waivers and amendments of the terms of a Mortgage Loan entered into by the Special Servicer, (h) the Mortgage File relating to each Mortgage Loan, and (i) any and all officers’ certificates and other evidence prepared by the Master Servicer or the Special Servicer to support its determination
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that any Advance was or, if made, would not be recoverable from Related Proceeds. Copies of any and all of the foregoing items will be available from the Master Servicer or Special Servicer, as the case may be, upon request; however, the Master Servicer or Special Servicer, as the case may be, will be permitted to require (other than from the Rating Agencies) a certification from the person seeking such information (covering among other matters, confidentiality) and payment of a sum sufficient to cover the reasonable costs and expenses of providing such information to Certificateholders, Certificate Owners and their prospective transferees, including, without limitation, copy charges and reasonable fees for employee time and for space.
Assumed Final Distribution Date; Rated Final Distribution Date
The ‘‘Assumed Final Distribution Date’’ with respect to any Class of REMIC Regular Certificates is the Distribution Date on which the Certificate Balance of such Class of Certificates would be reduced to zero based on the assumption that no Mortgage Loan is voluntarily prepaid prior to its stated maturity date (except for the ARD Loans which are assumed to be paid in full on their respective Anticipated Repayment Dates) and otherwise based on the ‘‘Table Assumptions’’ set forth under ‘‘YIELD AND MATURITY CONSIDERATIONS—Weighted Average Life’’ in this prospectus supplement, which Distribution Date shall in each case be as follows:
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![]() | ![]() | ![]() | ![]() |
Class Designation | ![]() | ![]() | Assumed Final Distribution Date |
Class A-1 | ![]() | ![]() | November 15, 2011 |
Class A-2 | ![]() | ![]() | January 15, 2012 |
Class A-3 | ![]() | ![]() | March 15, 2012 |
Class A-4 | ![]() | ![]() | March 15, 2014 |
Class A-PB | ![]() | ![]() | September 15, 2016 |
Class A-5 | ![]() | ![]() | January 15, 2017 |
Class A-1A | ![]() | ![]() | January 15, 2017 |
Class A-M | ![]() | ![]() | February 15, 2017 |
Class A-J | ![]() | ![]() | February 15, 2017 |
Class B | ![]() | ![]() | February 15, 2017 |
Class C | ![]() | ![]() | February 15, 2017 |
Class D | ![]() | ![]() | March 15, 2017 |
Class E | ![]() | ![]() | March 15, 2017 |
Class F | ![]() | ![]() | March 15, 2017 |
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The Assumed Final Distribution Dates set forth above were calculated without regard to any delays in the collection of Balloon Payments and without regard to a reasonable liquidation time with respect to any Mortgage Loans that may be delinquent. Accordingly, in the event of defaults on the Mortgage Loans, the actual final Distribution Date for one or more Classes of the Offered Certificates may be later, and could be substantially later, than the related Assumed Final Distribution Date(s).
In addition, the Assumed Final Distribution Dates set forth above were calculated on the basis of a 0% CPR (as defined in this prospectus supplement) (except that it is assumed that the ARD Loans pay their respective principal balances on their related Anticipated Repayment Dates) and no losses on the Mortgage Loans. Because the rate of principal payments (including prepayments) on the Mortgage Loans can be expected to exceed the scheduled rate of principal payments, and could exceed such scheduled rate by a substantial amount, and because losses may occur in respect of the Mortgage Loans, the actual final Distribution Date for one or more Classes of the Offered Certificates may be earlier, and could be substantially earlier, than the related Assumed Final Distribution Date(s). The rate of principal payments (including prepayments) on the Mortgage Loans will depend on the characteristics of the Mortgage Loans, as well as on the prevailing level of interest rates and other economic factors, and no assurance can be given as to actual principal payment experience. Finally, the Assumed Final Distribution Dates were calculated assuming there would not be an early termination of the Trust Fund. See ‘‘YIELD AND MATURITY CONSIDERATIONS’’ and ‘‘DESCRIPTION OF THE MORTGAGE POOL’’ in this
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prospectus supplement and ‘‘YIELD CONSIDERATIONS’’ and ‘‘DESCRIPTION OF THE TRUST FUNDS’’ in the accompanying prospectus.
The ‘‘Rated Final Distribution Date’’ with respect to each Class of Offered Certificates is the Distribution Date in December 2043, the first Distribution Date that follows the second anniversary of the end of the amortization term for the Mortgage Loan that, as of the Cut-Off Date, has the longest remaining amortization term. The rating assigned by a Rating Agency to any Class of Offered Certificates entitled to receive distributions in respect of principal reflects an assessment of the likelihood that Certificateholders of such Class will receive, on or before the Rated Final Distribution Date, all principal distributions to which they are entitled. See ‘‘RATINGS’’ in this prospectus supplement.
Voting Rights
At all times during the term of the Pooling and Servicing Agreement, 100% of the voting rights for the Certificates (the ‘‘Voting Rights’’) will be allocated among the respective Classes of Certificates as follows: (i) 4.0% in the aggregate in the case of the Class X Certificates (allocated, pro rata, between the Classes of Class X Certificates based on Notional Amount) and (ii) in the case of any Class of Sequential Pay Certificates, a percentage equal to the product of 96.0% and a fraction, the numerator of which is equal to the aggregate Certificate Balance of such Class of Certificates (as adjusted by treating any Appraisal Reduction Amount as a Realized Loss solely for the purposes of adjusting Voting Rights) and the denominator of which is equal to the aggregate Certificate Balances of all Classes of Sequential Pay Certificates, determined as of the Distribution Date immediately preceding such time; provided, however, the treatment of any Appraisal Reduction Amount as a Realized Loss shall not reduce the Certificate Balances of any Class for the purpose of determining the Controlling Class, the Controlling Class Representative or the Majority Subordinate Certificateholder. The holders of the Class R-I Certificates, Class R-II Certificates and Class Z Certificates will not be entitled to any Voting Rights. Voting Rights allocated to a Class of Certificates will be allocated among the related Certificateholders in proportion to the percentage interests in such Class evidenced by their respective Certificates. The Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-PB Certificates, Class A-5 Certificates and Class A-1A Certificates will be treated as one Class for determining the Controlling Class. In addition, if either the Master Servicer or the Special Servicer is the holder of any Sequential Pay Certificate, neither the Master Servicer nor Special Servicer, in its capacity as a Certificateholder, will have Voting Rights with respect to matters concerning compensation affecting the Master Servicer or the Special Servicer. See ‘‘DESCRIPTION OF THE CERTIFICATES—Voting Rights’’ in the accompanying prospectus.
Termination
The obligations created by the Pooling and Servicing Agreement will terminate following the earlier of (i) the final payment (or advance in respect thereof) or other liquidation of the last Mortgage Loan or REO Property, and (ii) the purchase of all of the Mortgage Loans and all of the REO Properties, if any, remaining in the Trust Fund by the Master Servicer, the Special Servicer or any single Certificateholder (so long as such Certificateholder is not an affiliate of the Depositor or a Mortgage Loan Seller) that is entitled to greater than 50% of the Voting Rights allocated to the Class of Sequential Pay Certificates with the lowest payment priority then outstanding (or if no Certificateholder is entitled to greater than 50% of the Voting Rights of such Class, the Certificateholder with the largest percentage of Voting Rights allocated to such Class) (the ‘‘Majority Subordinate Certificateholder’’) and distribution or provision for distribution thereof to the Certificateholders. Certain of the parties purchasing the assets of the Trust Fund mentioned above may be affiliates of the Depositor, the Sponsors, the Master Servicer, the Special Servicer or the Trustee. Written notice of termination of the Pooling and Servicing Agreement will be given to each Certificateholder, and the final distribution will be made only upon surrender and cancellation of the Certificates at the office of the Trustee or other registrar for the Certificates or at such other location as may be specified in such notice of termination.
Any such purchase by the Master Servicer, the Special Servicer or the Majority Subordinate Certificateholder of all the Mortgage Loans and all of the REO Properties, if any, remaining in the Trust
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Fund is required to be made at a price equal to (i) the aggregate Purchase Price of all the Mortgage Loans (other than REO Loans) then included in the Trust Fund, plus (ii) the fair market value of all REO Properties then included in the Trust Fund, as determined by an independent appraiser selected by the Master Servicer and approved by the Trustee (which may be less than the Purchase Price for the corresponding REO Loan), minus (iii) if the purchaser is the Master Servicer, the aggregate of amounts payable or reimbursable to the Master Servicer under the Pooling and Servicing Agreement. Such purchase will effect early retirement of the then outstanding Offered Certificates, but the right of the Master Servicer, the Special Servicer or the Majority Subordinate Certificateholder to effect such purchase is subject to the requirement that the aggregate principal balance of the Mortgage Loans is less than 1% of the Cut-Off Date Pool Balance.
The purchase price paid in connection with the purchase of all Mortgage Loans and REO Properties remaining in the Trust Fund, exclusive of any portion thereof payable or reimbursable to any person other than the Certificateholders, will constitute part of the Available Distribution Amount for the final Distribution Date. The Available Distribution Amount for the final Distribution Date will be distributed by the Trustee generally as described under ‘‘—Distributions—Application of the Available Distribution Amount’’ in this prospectus supplement, except that the distributions of principal on any Class of Sequential Pay Certificates described thereunder will be made, subject to available funds and the distribution priorities described thereunder, in an amount equal to the entire Certificate Balance of such Class of Certificates remaining outstanding.
An exchange by any Certificateholder of all of the then outstanding Certificates (other than the Class Z Certificates and the REMIC Residual Certificates) for all of the Mortgage Loans and each REO Property remaining in the Trust Fund may be made: (i) if the then outstanding Certificates (other than the Class Z Certificates and the REMIC Residual Certificates) are held by a single Certificateholder, (ii) after the Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-PB Certificates, Class A-5 Certificates, Class A-1A Certificates, Class A-M Certificates, Class A-J Certificates, Class B Certificates, Class C Certificates, Class D Certificates, Class E Certificates and Class F Certificates have been paid in full, and (iii) by giving written notice to each of the parties to the Pooling and Servicing Agreement no later than 30 days prior to the anticipated date of exchange. In the event that such Certificateholder elects to exchange its Certificates for all of the Mortgage Loans and each REO Property remaining in the Trust Fund, such Certificateholder must deposit in the Certificate Account, in immediately available funds, an amount equal to all amounts then due and owing to the Master Servicer, the Special Servicer, the Trustee, the Certificate Registrar, the REMIC Administrator and their respective agents under the Pooling and Servicing Agreement.
For purposes of the foregoing provisions relating to termination of the Trust Fund, with respect to the State Street Financial Center Loan, the term REO Property refers to the Trust Fund’s beneficial interest in the related REO Property under the LB-UBS 2007-C1 Pooling and Servicing Agreement.
The Trustee
Wells Fargo Bank, N.A. (‘‘Wells Fargo Bank’’) is acting as trustee (the ‘‘Trustee’’) pursuant to the Pooling and Servicing Agreement. See ‘‘DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS—The Trustee’’, ‘‘—Duties of the Trustee’’, ‘‘—Certain Matters Regarding the Trustee’’ and ‘‘—Resignation and Removal of the Trustee’’ in the accompanying prospectus. Any expenses incurred in removing the Trustee and/or appointing a successor trustee will be Additional Trust Fund Expenses; provided, however, in the event that the Trustee is removed pursuant to the terms of the Pooling and Servicing Agreement, or resigns or transfers its business, the Trustee shall bear all such expenses incurred by the Trust Fund in appointing a successor trustee; provided, however, if the Trustee is removed without cause, the removing party shall pay the expenses of appointing a successor trustee. As compensation for its services, the Trustee will be entitled to receive monthly, from general funds on deposit in the Distribution Account, the Trustee Fee. The ‘‘Trustee Fee’’ for each Mortgage Loan and each REO Loan for any Distribution Date equals one month’s interest for the most recently ended calendar month (calculated on the basis of a 360 day year consisting of twelve 30 day months), accrued at the ‘‘Trustee Fee Rate’’ on the Stated Principal Balance of such Mortgage Loan or REO Loan, as the case may be, outstanding immediately following the prior Distribution Date (or, in the case of the initial Distribution
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Date, as of the Closing Date). The Trustee Fee Rate is a per annum rate set forth in the Pooling and Servicing Agreement. In addition, the Trustee will be entitled to recover from the Trust Fund all reasonable unanticipated expenses and disbursements incurred or made by the Trustee in accordance with any of the provisions of the Pooling and Servicing Agreement, but not including expenses incurred in the ordinary course of performing its duties as Trustee under the Pooling and Servicing Agreement, and not including any such expense, disbursement or advance as may arise from its willful misconduct, negligence or bad faith. The Trustee will not be entitled to any fee with respect to any Companion Loan. The Trustee also has certain duties with respect to REMIC Administration (in such capacity, the ‘‘REMIC Administrator’’). See ‘‘MATERIAL FEDERAL INCOME TAX CONSEQUENCES—Federal Income Tax Consequences for REMIC Certificates—Taxation of Owners of REMIC Residual Certificates’’ and ‘‘—Reporting and Other Administrative Matters’’ in the accompanying prospectus.
The Trustee and any director, officer, employee, affiliate, agent or ‘‘control’’ person within the meaning of the Securities Act of the Trustee will be entitled to be indemnified for and held harmless by the Trust Fund against any loss, liability or reasonable ‘‘out of pocket’’ expense (including, without limitation, costs and expenses of litigation, and of investigation, counsel fees, damages, judgments and amounts paid in settlement) arising out of, or incurred in connection with the Pooling and Servicing Agreement, the Mortgage Loans or the Certificates or any act of the Master Servicer or the Special Servicer taken on behalf of the Trustee as provided for in the Pooling and Servicing Agreement; provided that such expense is an ‘‘unanticipated expense incurred by the REMIC’’ within the meaning of Treasury Regulations Section 1.860G 1(b)(3)(ii); provided, further, neither the Trustee, nor any of the other above specified persons will be entitled to indemnification pursuant to the Pooling and Servicing Agreement for (1) any liability specifically required to be borne thereby pursuant to the terms of the Pooling and Servicing Agreement, or (2) any loss, liability or expense incurred by reason of willful misfeasance, bad faith or negligence in the performance of the Trustee’s obligations and duties under the Pooling and Servicing Agreement, or by reason of its negligent disregard of such obligations and duties, or as may arise from a breach of any representation, warranty or covenant of the Trustee, as applicable, made in the Pooling and Servicing Agreement.
Wells Fargo Bank will act as Trustee and Custodian under the Pooling and Servicing Agreement. Wells Fargo Bank is a national banking association and a wholly owned subsidiary of Wells Fargo & Company, a diversified financial services company with approximately $483 billion in assets, 23 million customers and 167,000 employees as of September 30, 2006. Wells Fargo & Company is among the leading U.S. bank holding companies, providing banking, insurance, trust, mortgage and consumer finance services throughout the United States. Wells Fargo Bank provides retail and commercial banking services and corporate trust, custody, securities lending, securities transfer, cash management, investment management and other financial and fiduciary services. The Depositor, the Sponsors, the Mortgage Loan Sellers, the Master Servicer and the Special Servicer may maintain banking and other commercial relationships with Wells Fargo Bank and its affiliates. The Trustee has served as loan file custodian for various mortgage loans owned by the Sponsors, including for Mortgage Loans included in the Trust Fund. The terms of the custodial agreements are customary for the commercial mortgage backed securities industry and provide for the delivery, receipt, review and safekeeping of mortgage loan files. The terms of the Pooling and Servicing Agreement with respect to the custody of the Mortgage Loans supersede any such custodial agreement. Wells Fargo Bank’s principal corporate trust offices are located at 9062 Old Annapolis Road, Columbia, Maryland 21045-1951 and its office for certificate transfer services is located at Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479-0113.
Wells Fargo Bank has provided corporate trust services since 1934. Wells Fargo Bank acts as trustee with respect to a variety of transactions and asset types including corporate and municipal bonds, mortgage backed and asset backed securities and collateralized debt obligations. As of September 30, 2006, Wells Fargo Bank was acting as trustee on more than 285 series of commercial mortgage backed securities with an aggregate principal balance of over $290 billion.
In its capacity as trustee on commercial mortgage securitizations, Wells Fargo Bank is generally required to make an advance if the related master servicer or special servicer fails to make a required advance. In the past three years, Wells Fargo Bank has not been required to make an advance on a commercial mortgage backed securities transaction.
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Under the terms of the Pooling and Servicing Agreement, the Trustee is responsible for securities administration, which includes pool performance calculations, distribution calculations and the preparation of monthly distribution reports. As securities administrator, the Trustee is responsible for the preparation of all REMIC tax returns on behalf of the REMICs and the preparation of monthly reports on Form 10-D (in regards to distribution and pool performance information) and annual reports on Form 10-K that are required to be filed with the SEC on behalf of the Trust Fund. Wells Fargo Bank has been engaged in the business of securities administration in connection with mortgage backed securities in excess of 20 years and in connection with commercial mortgage backed securities since 1997. It has acted as securities administrator with respect to more than 360 series of commercial mortgage backed securities, and, as of December 31, 2006, was acting as securities administrator with respect to more than $340 billion of outstanding commercial mortgage backed securities.
There have been no material changes to Wells Fargo Bank’s policies or procedures with respect to its securities administration function other than changes required by applicable laws.
In the past three years, Wells Fargo Bank has not materially defaulted in its securities administration obligations under any pooling and servicing agreement or caused an early amortization or other performance triggering event because of servicing by Wells Fargo Bank with respect to commercial mortgage backed securities.
The Trustee is also authorized to invest or direct the investment of funds held in the Distribution Account, the Interest Reserve Account, the Additional Interest Account and the Gain on Sale Reserve Account maintained by it that relate to the Mortgage Loans and REO Properties, as the case may be, in certain short term United States government securities and certain other permitted investment grade obligations, and the Trustee will be entitled to retain any interest or other income earned on such funds held in those accounts maintained by it, but shall be required to cover any losses on investments of funds held in those accounts maintained by it, from its own funds without any right to reimbursement, except in certain limited circumstances described in the Pooling and Servicing Agreement.
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YIELD AND MATURITY CONSIDERATIONS
Yield Considerations
General. The yield on any Offered Certificate will depend on, among other things, (a) the price at which such Certificate is purchased by an investor and (b) the rate, timing and amount of distributions on such Certificate. The rate, timing and amount of distributions on any Offered Certificate will in turn depend on, among other things, (i) the Pass-Through Rate for such Certificate, (ii) the rate and timing of principal payments (including principal prepayments) and other principal collections on the Mortgage Loans and the extent to which such amounts are to be applied in reduction of the Certificate Balance, (iii) the rate, timing and severity of Realized Losses and Additional Trust Fund Expenses and the extent to which such losses and expenses are allocable in reduction of the Certificate Balance, and (iv) the timing and severity of any Net Aggregate Prepayment Interest Shortfalls and the extent to which such shortfalls allocable are in reduction of the Distributable Certificate Interest payable on the related Class.
Rate and Timing of Principal Payment. The yield to holders of any Offered Certificates purchased at a discount or premium will be affected by the rate and timing of principal payments made in reduction of the Certificate Balance of any Class of Sequential Pay Certificates. As described in this prospectus supplement, the Loan Group 1 Principal Distribution Amount (and, after the Class A-1A Certificates have been retired, any remaining Loan Group 2 Principal Distribution Amount) for each Distribution Date will generally be distributable first to reduce the Certificate Balance of the Class A-PB Certificates to the Class A-PB Planned Principal Balance, then, to the Class A-1 Certificates until the Certificate Balance thereof is reduced to zero, then, to the Class A-2 Certificates until the Certificate Balance thereof is reduced to zero, then, to the Class A-3 Certificates until the Certificate Balance thereof is reduced to zero, then, to the Class A-4 Certificates until the Certificate Balance thereof is reduced to zero, and then, to the Class A-PB Certificates until the Certificate Balance thereof is reduced to zero, and then, to the Class A-5 Certificates until the Certificate Balance thereof is reduced to zero. The Loan Group 2 Principal Distribution Amount (and, after the Class A-5 Certificates have been retired, any remaining Loan Group 1 Principal Distribution Amount) for each Distribution Date will generally be distributable first to the Class A-1A Certificates. After those distributions, the remaining Principal Distribution Amount with respect to the Mortgage Pool will generally be distributable entirely in respect of the Class A-M Certificates, Class A-J Certificates, Class B Certificates, Class C Certificates, Class D Certificates, Class E Certificates, Class F Certificates and then the Non-Offered Certificates (other than the Class X, Class R and Class Z Certificates), in that order, in each case until the Certificate Balance of such Class of Certificates is reduced to zero. Consequently, the rate and timing of principal payments that are distributed or otherwise result in reduction of the Certificate Balance of any Class of Offered Certificates, will be directly related to the rate and timing of principal payments on or in respect of the Mortgage Loans, which will in turn be affected by the amortization schedules thereof, the dates on which Balloon Payments are due, any extension of maturity dates by the Master Servicer, the LB-UBS 2007-C1 Master Servicer or the LB-UBS 2007-C1 Special Servicer and the rate and timing of principal prepayments and other unscheduled collections thereon (including for this purpose, collections made in connection with liquidations of Mortgage Loans due to defaults, casualties or condemnations affecting the Mortgaged Properties, or purchases of Mortgage Loans out of the Trust Fund). Furthermore, because the amount of principal that will be distributed to the Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-PB Certificates, Class A-5 Certificates and Class A-1A Certificates will generally be based upon the particular Loan Group that the related Mortgage Loan is deemed to be in, the yield on the Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-PB Certificates and Class A-5 Certificates will be particularly sensitive to prepayments on Mortgage Loans in Loan Group 1 and the yield on the Class A-1A Certificates will be particularly sensitive to prepayments on Mortgage Loans in Loan Group 2. With respect to the Class A-PB Certificates, the extent to which the planned principal balances are achieved and the sensitivity of the Class A-PB Certificates to principal prepayments on the Mortgage Loans will depend in part on the period of time during which the Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4 Certificates and Class A-1A Certificates remain outstanding. In particular, once such Classes of Certificates are no longer outstanding, any remaining portion on any Distribution Date of the Loan Group 1 Principal Distribution Amount and/or Loan Group 2 Principal Distribution Amount,
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as applicable, will generally be distributed to the Class A-PB Certificates until the Certificate Balance of the Class A-PB Certificates is reduced to zero. Accordingly, the Class A-PB Certificates will become more sensitive to the rate of prepayments on the Mortgage Loans than they were when the Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4 Certificates and Class A-1A Certificates were outstanding. In addition, although the borrowers under ARD Loans may have certain incentives to repay ARD Loans on their Anticipated Repayment Dates, there can be no assurance that the related borrowers will be able to repay the ARD Loans on their Anticipated Repayment Date. The failure of a borrower to repay the ARD Loans on their Anticipated Repayment Dates will not be an event of default under the terms of the ARD Loans, and pursuant to the terms of the Pooling and Servicing Agreement, neither the Master Servicer nor the Special Servicer will be permitted to take any enforcement action with respect to a borrower’s failure to pay Additional Interest or principal in excess of the principal component of the constant Periodic Payment, other than requests for collection, until the scheduled maturity of the ARD Loans; provided that the Master Servicer or the Special Servicer, as the case may be, may take action to enforce the Trust Fund’s right to apply Excess Cash Flow to principal in accordance with the terms of the related Mortgage Loan documents.
In addition, if the Master Servicer or the Trustee, as applicable, reimburses itself out of general collections on the Mortgage Pool for any Advance that it or the Special Servicer has determined is not recoverable out of collections on the related Mortgage Loan, then that Advance (together with accrued interest thereon) will be deemed, to the fullest extent permitted, to be reimbursed first out of the Principal Distribution Amount otherwise distributable on the Certificates (prior to being deemed reimbursed out of payments and other collections of interest on the underlying Mortgage Loans otherwise distributable on the Certificates), thereby reducing the Principal Distribution Amount of the Offered Certificates. Any such reduction in the amount distributed as principal of the Certificates may adversely affect the weighted average lives and yields to maturity of one or more Classes of Certificates and, after a Final Recovery Determination has been made, will create Realized Losses.
Prepayments and, assuming the respective stated maturity dates therefor have not occurred, liquidations and purchases of the Mortgage Loans, will result in distributions on the Certificates of amounts that would otherwise be distributed over the remaining terms of the Mortgage Loans. Defaults on the Mortgage Loans, particularly at or near their stated maturity dates, may result in significant delays in payments of principal on the Mortgage Loans (and, accordingly, on the Offered Certificates that are Sequential Pay Certificates) while work-outs are negotiated or foreclosures are completed. See ‘‘SERVICING OF THE MORTGAGE LOANS—Modifications, Waivers and Amendments’’ in this prospectus supplement and ‘‘DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS —Realization Upon Defaulted Mortgage Loans’’ and ‘‘CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS AND LEASES—Foreclosure’’ in the accompanying prospectus.
The extent to which the yield to maturity of any Class of Offered Certificates may vary from the anticipated yield will depend upon the degree to which such Certificates are purchased at a discount or premium and when, and to what degree, payments of principal on the Mortgage Loans (and which of the Loan Groups such Mortgage Loan is deemed to be in) with respect to the Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-PB Certificates, Class A-5 Certificates and Class A-1A Certificates in turn are distributed or otherwise result in reduction of the Certificate Balance of such Certificates. An investor should consider, in the case of any Offered Certificate purchased at a discount, the risk that a slower than anticipated rate of principal payments on the Mortgage Loans could result in an actual yield to such investor that is lower than the anticipated yield and, in the case of any Offered Certificate purchased at a premium, the risk that a faster than anticipated rate of principal payments could result in an actual yield to such investor that is lower than the anticipated yield. In general, the earlier a payment of principal on the Mortgage Loans is distributed to or otherwise results in reduction of the principal balance of an Offered Certificate purchased at a discount or premium, the greater will be the effect on an investor’s yield to maturity. As a result, the effect on an investor’s yield of principal payments on the Mortgage Loans and in particular in the case of the Class A-1A Certificates, on the Mortgage Loans in Loan Group 2 occurring at a rate higher (or lower) than the rate anticipated by the investor during any particular period would not be fully offset by a subsequent like reduction (or increase) in the rate of such principal payments. Because the rate of principal payments on the Mortgage
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Loans will depend on future events and a variety of factors (as described more fully below), no assurance can be given as to such rate or the rate of principal prepayments in particular. The Depositor is not aware of any relevant publicly available or authoritative statistics with respect to the historical prepayment experience of a large group of mortgage loans comparable to the Mortgage Loans.
Losses and Shortfalls. The yield to holders of the Offered Certificates will also depend on the extent to which such holders are required to bear the effects of any losses or shortfalls on the Mortgage Loans. Losses and other shortfalls on the Mortgage Loans will, with the exception of any Net Aggregate Prepayment Interest Shortfalls, generally be borne by the holders of the respective Classes of Sequential Pay Certificates (other than the Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-PB Certificates, Class A-5 Certificates and Class A-1A Certificates which share such losses and shortfalls pro rata) to the extent of amounts otherwise distributable in respect of such Certificates, in reverse order of payment priority. Realized Losses and Additional Trust Fund Expenses will be allocated, as and to the extent described in this prospectus supplement, to the holders of the respective Classes of Sequential Pay Certificates (other than the Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-PB Certificates, Class A-5 Certificates and Class A-1A Certificates) (in reduction of the Certificate Balance of each such Class), in reverse payment priorities. In the event of a reduction of the Certificate Balances of all such Classes of Certificates, such losses and shortfalls will then be borne, pro rata, by the Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-PB Certificates, Class A-5 Certificates and Class A-1A Certificates (and the Class X-P, Class X-C and Class X-W Certificates with respect to shortfalls of interest). As more fully described under ‘‘DESCRIPTION OF THE CERTIFICATES—Distributions—Distributable Certificate Interest’’ in this prospectus supplement, Net Aggregate Prepayment Interest Shortfalls will generally be borne by the respective Classes of REMIC Regular Certificates (other than the Class X-P, Class X-C and Class X-W Certificates) on a pro rata basis.
Pass-Through Rate. The yield on the Class A-1A Certificates, Class A-M Certificates, Class A-J Certificates, Class B Certificates, Class C Certificates, Class D Certificates, Class E Certificates and Class F Certificates could be adversely affected if Mortgage Loans with higher interest rates pay faster than Mortgage Loans with lower interest rates since these Classes bear interest at a rate limited by, based upon, or equal to, the Weighted Average Net Mortgage Rate of the Mortgage Loans.
Certain Relevant Factors. The rate and timing of principal payments and defaults and the severity of losses on the Mortgage Loans may be affected by a number of factors, including, without limitation, prevailing interest rates, the terms of the Mortgage Loans (for example, due-on-sale clauses, Lockout Periods, provisions requiring the payment of Prepayment Premiums, Yield Maintenance Charges and amortization terms that require Balloon Payments), the demographics and relative economic vitality of the areas in which the Mortgaged Properties are located and the general supply and demand for rental units, hotel/motel guest rooms, health care facility beds, manufactured housing pads or comparable commercial space, as applicable, in such areas, the quality of management of the Mortgaged Properties, the servicing of the Mortgage Loans, possible changes in tax laws and other opportunities for investment. See ‘‘RISK FACTORS—The Offered Certificates—Prepayments Will Affect Your Yield’’ and ‘‘DESCRIPTION OF THE MORTGAGE POOL’’ in this prospectus supplement and ‘‘YIELD CONSIDERATIONS—Prepayment Considerations’’ in the accompanying prospectus.
The rate of prepayment on the Mortgage Pool is likely to be affected by prevailing market interest rates for mortgage loans of a comparable type, term and risk level. When the prevailing market interest rate is below a mortgage interest rate, the related borrower may have an incentive to refinance its mortgage loan. As of the Cut-Off Date, all of the Mortgage Loans (except 17 Mortgage Loans, representing 4.9% of the Cut-Off Date Pool Balance, which may be prepaid with a Yield Maintenance Charge as of the Closing Date) may be prepaid at any time after the expiration of any applicable Lockout Period, subject, in some cases, to the payment of a Prepayment Premium or a Yield Maintenance Charge. A requirement that a prepayment be accompanied by a Prepayment Premium or Yield Maintenance Charge may not provide a sufficient economic disincentive to deter a borrower from refinancing at a more favorable interest rate.
See ‘‘—Weighted Average Life’’ in this prospectus supplement.
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Depending on prevailing market interest rates, the outlook for market interest rates and economic conditions generally, some borrowers may sell or refinance Mortgaged Properties in order to realize their equity therein, to meet cash flow needs or to make other investments. In addition, some borrowers may be motivated by federal and state tax laws (which are subject to change) to sell Mortgaged Properties prior to the exhaustion of tax depreciation benefits.
The Depositor makes no representation as to the particular factors that will affect the rate and timing of prepayments and defaults on the Mortgage Loans, as to the relative importance of such factors, as to the percentage of the principal balance of the Mortgage Loans that will be prepaid or as to whether a default will have occurred as of any date or as to the overall rate of prepayment or default on the Mortgage Loans.
Delay in Payment of Distributions. Because monthly distributions will not be made to Certificateholders until a date that is scheduled to be up to 15 days following the Due Dates for the Mortgage Loans during the related Collection Period, the effective yield to the holders of the Offered Certificates will be lower than the yield that would otherwise be produced by the applicable Pass-Through Rates and purchase prices (assuming such prices did not account for such delay).
Unpaid Distributable Certificate Interest. As described under ‘‘DESCRIPTION OF THE CERTIFICATES—Distributions—Application of the Available Distribution Amount’’ in this prospectus supplement, if the portion of the Available Distribution Amount distributable in respect of interest on any Class of Offered Certificates on any Distribution Date is less than the Distributable Certificate Interest then payable for such Class of Certificates, the shortfall will be distributable to holders of such Class of Certificates on subsequent Distribution Dates, to the extent of available funds. Any such shortfall will not bear interest, however, and will therefore negatively affect the yield to maturity of such Class of Certificates for so long as it is outstanding.
Optional Termination. Any optional termination of the Trust Fund would have an effect similar to a prepayment in full of the Mortgage Loans (without, however, the payment of any Prepayment Premiums or Yield Maintenance Charges) and, as a result, investors in any Certificates purchased at a premium might not fully recoup their initial investment. See ‘‘DESCRIPTION OF THE CERTIFICATES —Termination’’ in this prospectus supplement.
Weighted Average Life
The weighted average life of any Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-PB Certificates, Class A-5 Certificates, Class A-1A Certificates, Class A-M Certificates, Class A-J Certificates, Class B Certificates, Class C Certificates, Class D Certificates, Class E Certificates and Class F Certificates refers to the average amount of time that will elapse from the assumed Closing Date until each dollar allocable to principal of such Certificate is distributed to the investor. The weighted average life of any such Offered Certificate will be influenced by, among other things, the rate at which principal on the Mortgage Loans is paid or otherwise collected or advanced and applied to pay principal of such Offered Certificate, which may be in the form of scheduled amortization, voluntary prepayments, insurance and condemnation proceeds and liquidation proceeds. As described in this prospectus supplement, the Loan Group 1 Principal Distribution Amount (and, after the Class A-1A Certificates have been retired, any remaining Loan Group 2 Principal Distribution Amount) for each Distribution Date will generally be distributable first to reduce the Certificate Balance of the Class A-PB Certificates to the Class A-PB Planned Principal Balance, then, to the Class A-1 Certificates until the Certificate Balance thereof is reduced to zero, then, to the Class A-2 Certificates until the Certificate Balance thereof is reduced to zero, then, to the Class A-3 Certificates until the Certificate Balance thereof is reduced to zero, then, to the Class A-4 Certificates until the Certificate Balance thereof is reduced to zero, then, to the Class A-PB Certificates until the Certificate Balance thereof is reduced to zero, then, to the Class A-5 Certificates until the Certificate Balance thereof is reduced to zero. The Loan Group 2 Principal Distribution Amount (and, after the Class A-5 Certificates have been retired, any remaining Loan Group 1 Principal Distribution Amount) for each Distribution Date will generally be distributable first to the Class A-1A Certificates. After those distributions, the remaining Principal Distribution Amount with respect to the Mortgage Pool will generally be distributable entirely in respect of the
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Class A-M Certificates, the Class A-J Certificates, the Class B Certificates, the Class C Certificates, the Class D Certificates, the Class E Certificates and the Class F Certificates in that order, in each case until the Certificate Balance of such Class of Certificates, is reduced to zero.
The tables below indicate the percentage of the initial Certificate Balance of each Class of Offered Certificates that would be outstanding after each of the dates shown and the corresponding weighted average life of each such Class of Offered Certificates. To the extent that the Mortgage Loans or the Certificates have characteristics that differ from those assumed in preparing the tables, the Class A-1 Certificates, the Class A-2 Certificates, the Class A-3 Certificates, the Class A-4 Certificates, the Class A-PB Certificates, the Class A-5 Certificates, the Class A-1A Certificates, the Class A-M Certificates, the Class A-J Certificates, the Class B Certificates, the Class C Certificates, the Class D Certificates, the Class E Certificates and the Class F Certificates may mature earlier or later than indicated by the tables. With respect to the Class A-PB Certificates, although based on the Table Assumptions (as defined below), the Certificate Balance of the Class A-PB Certificates on each Distribution Date would be reduced to the Class A-PB Planned Principal Balance for such Distribution Date, there is no assurance that the Mortgage Loans will perform in conformity with the Table Assumptions. Therefore, there can be no assurance that the Certificate Balance of the Class A-PB Certificates on any Distribution Date will be equal to the balance that is specified for such Distribution Date in the table. In particular, once the Certificate Balances of the Class A-1A Certificates, the Class A-1 Certificates, the Class A-2 Certificates, the Class A-3 Certificates and the Class A-4 Certificates, have been reduced to zero, any remaining portion on any Distribution Date of the Loan Group 1 Principal Distribution Amount and/or Loan Group 2 Principal Distribution Amount, as applicable, will be distributed to the Class A-PB Certificates until the Certificate Balance of the Class A-PB Certificates are reduced to zero. Accordingly, the Mortgage Loans will not prepay at any constant rate nor will the Mortgage Loans prepay at the same rate, and it is highly unlikely that the Mortgage Loans will prepay in a manner consistent with the assumptions described above. In addition, variations in the actual prepayment experience and in the balance of the Mortgage Loans that actually prepay may increase or decrease the percentages of initial Certificate Balances (and shorten or extend the weighted average lives) shown in the following tables. Investors are urged to conduct their own analyses of the rates at which the Mortgage Loans may be expected to prepay.
Prepayments on mortgage loans may be measured by a prepayment standard or model. The model used in this prospectus supplement is the ‘‘Constant Prepayment Rate’’ or ‘‘CPR’’ model. The CPR model represents an assumed constant annual rate of prepayment each month, expressed as a per annum percentage of the then scheduled principal balance of the pool of mortgage loans. As used in the tables set forth below, the column headed ‘‘0% CPR’’ assumes that none of the Mortgage Loans is prepaid in whole or in part before maturity or the Anticipated Repayment Date, as the case may be. The columns headed ‘‘25% CPR’’, ‘‘50% CPR’’, ‘‘75% CPR’’ and ‘‘100% CPR’’, respectively, assume that prepayments are made each month at those levels of CPR on the Mortgage Loans that are eligible for prepayment under the Table Assumptions set forth in the next paragraph (each such scenario, a ‘‘Scenario’’). There is no assurance, however, that prepayments on the Mortgage Loans will conform to any level of CPR, and no representation is made that the Mortgage Loans will prepay at the levels of CPR shown or at any other prepayment rate.
The tables below were derived from calculations based on the following assumptions (the ‘‘Table Assumptions’’): (i) no Mortgage Loan prepays during any applicable Lockout Period or any period during which Defeasance Collateral is permitted or required to be pledged or any period during which a yield maintenance charge is required (otherwise, in the case of each table, each Mortgage Loan is assumed to prepay at the indicated level of CPR, with each prepayment being applied on the first day of the applicable month in which it is assumed to be received), (ii) the Pass-Through Rates and initial Certificate Balances of the respective Classes of Sequential Pay Certificates are as described in this prospectus supplement, (iii) there are no delinquencies or defaults with respect to, and no modifications, waivers or amendments of the terms of, the Mortgage Loans, (iv) there are no Realized Losses, Additional Trust Fund Expenses or Appraisal Reduction Amounts with respect to the Mortgage Loans or the Trust Fund, (v) scheduled interest and principal payments on the Mortgage Loans are timely received, (vi) ARD Loans pay in full on their Anticipated Repayment Dates, (vii) all Mortgage Loans have Due Dates on the first day of each month and accrue interest on the respective basis described in this prospectus supplement
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(i.e., a 30/360 basis or an Actual/360 basis), (viii) all prepayments are accompanied by a full month’s interest and there are no Prepayment Interest Shortfalls, (ix) there are no breaches of the Mortgage Loan Sellers’ representations and warranties regarding its Mortgage Loans, (x) all applicable Prepayment Premiums and Yield Maintenance Charges are collected, (xi) no party entitled thereto exercises its right of optional termination of the Trust Fund and no party entitled thereto will exercise its option to purchase any Mortgage Loan from the Trust Fund described in this prospectus supplement, (xii) the borrowers under any Mortgage Loans which permit the borrower to choose between defeasance or a yield maintenance charge choose to be subject to a yield maintenance charge (assuming that the lenders under loan numbers 108, 130 and 208 do not apply holdback or reserve escrows to partially prepay the related Mortgage Loan or to accelerate the maturity date pursuant to the related Mortgage Loan documents and that the borrowers under loan numbers 13 and 23 exercise their prepayment rights to prepay up to $8,842,000 and $5,908,000, respectively, both subject to a 1.5% prepayment premium as stated in the related Mortgage Loan documents), (xiii) distributions on the Certificates are made on the 15th day (each assumed to be a business day) of each month, commencing in April, 2007 and (xiv) the Closing Date for the sale of the Offered Certificates is March 28, 2007.
The tables set forth below indicate the resulting weighted average lives of each Class of Offered Certificates and set forth the percentages of the initial Certificate Balance of such Class of Offered Certificates that would be outstanding after each of the dates shown in each case assuming the indicated level of CPR. For purposes of the following tables, the weighted average life of an Offered Certificate is determined by (i) multiplying the amount of each principal distribution thereon by the number of years from the assumed Closing Date of such Certificate to the related Distribution Date, (ii) summing the results and (iii) dividing the sum by the aggregate amount of the reductions in the principal balance of such Certificate.
Percentages of the Closing Date Certificate Balance of the Class A-1 Certificates
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