[LETTERHEAD OF CADWALADER, WICKERSHAM & TAFT LLP]
March 6, 2006
John Stickel
Attorney Advisor
Securities and Exchange Commission
Division of Corporate Finance
100 F Street, N.E.
Washington, D.C. 20549
Re: Wachovia Commercial Mortgage Securities, Inc., Registration Statement on
Form S-3 (File No. 333-131262)
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Dear Mr. Stickel:
We are acting as special counsel to Wachovia Commercial Mortgage Securities,
Inc., the registrant (the "Registrant"), under the above-referenced Registration
Statement submission on Form S-3 (the "Registration Statement"). We have
reviewed your letter dated February 21, 2006 (the "Comment Letter") transmitting
comments of the staff of the Division of Corporation Finance (the "Staff") of
the Securities and Exchange Commission (the "Commission") to the Registration
Statement. We have reviewed the Staff's comments contained in the Comment Letter
with representatives of the Registrant. The following are the responses of the
Registrant to the Staff's comments, and we are submitting today an amended
Registration Statement, which, as indicated below, implements changes requested
by the Staff in the Comment Letter. Capitalized terms used in this letter
without definition have the meanings given them in the attached base prospectus
(the "Base Prospectus") or the attached prospectus supplement (the "Prospectus
Supplement" and, together with the Base Prospectus, the "Prospectus") included
in the Registration Statement. The paragraph numbers of this letter correspond
to the numbered paragraphs in the Comment Letter, a copy of which is attached to
this letter. Additionally, the page references included in the Registrant's
responses below correspond to the blacklined text in the Prospectus Supplement
and the Base Prospectus included herewith.
We and the Registrant thank you for your review and comment on the Registration
Statement and for your assistance with our compliance with the applicable
disclosure requirements of Regulation AB.
Stuart Goldstein Tel 704 348 5258 Fax 704 348 5200
CADWALADER
With respect to the Comment Letter, the Registrant has instructed us to advise
you as follows:
1. The Registrant confirms that it, or any issuing entity previously
established, directly or indirectly, by the Registrant or any affiliate of
the Registrant, has been current with Exchange Act reporting during the
last twelve months with respect to asset-backed securities involving the
same asset class. During the last twelve months, none of its affiliates
has offered a class of asset-backed
securities involving the same asset class that is contemplated by the
Registration Statement.
2. The Registrant confirms that the material terms to be included in the
finalized agreements will either be disclosed as required by all
applicable rules of the Securities Act of 1933, as amended, or that
finalized agreements will be filed simultaneously with or prior to the
final prospectus.
3. The Registrant notes the Staff's comment and confirms that the Base
Prospectus includes all assets, credit enhancements or other structural
features reasonably contemplated to be included in an actual takedown.
4. A courtesy copy of the Registrant's most recent pooling and servicing
agreement, marked to reflect changes from the prior pooling and
servicing agreement and Regulation AB changes, is enclosed herewith.
5. The Staff's requested change has been made on page S-83 of the
Prospectus Supplement and pages 63, 93 and 109 of the Base Prospectus.
6. The Staff's requested change has been made to pages S-19 and S-106 of
the Prospectus Supplement.
7. The Staff's requested change has been made to the cover page of the
Prospectus Supplement and the Base Prospectus.
8. The Staff's requested change has been made to the cover page of the
Prospectus Supplement.
9. The Registrant believes that the type of structure described in Item
1103(a)(3)(vii), while sometimes found in other types of asset-backed
securities, is generally not applicable to commercial mortgage-backed
securities ("CMBS"). While there are events (such as sale of a
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CADWALADER
defaulted loan or repurchase of a mortgage loan due to a breach of
representation or warranty) that may lead to liquidation or
amortization of an individual mortgage loan, CMBS transaction
structures typically do not provide for liquidation or early
amortization of the pool of loans as a whole. However, the Registrant
has added bracketed language on page S-19 of the Prospectus Supplement
to provide for disclosure if such a structure is used in the future.
The Registrant notes that CMBS structures may include a "cleanup call"
leading to liquidation of the pool at a point where the pool has been
reduced to a specified percentage (typically 1%) of its original
balance, as disclosed on page S-18 of the Prospectus Supplement under
the caption "Optional Termination of the Trust Fund."
10. The Staff's requested change has been made to pages S-11 and S-108 of
the Prospectus Supplement.
11. The circumstances in which pool assets can be added, removed or
substituted are disclosed in the summary of the Prospectus Supplement
under the captions "Required Repurchases or Substitutions of Mortgage
Loans" and "Sale of Defaulted Loans" on page S-18 of the Prospectus
Supplement.
12. The Staff's requested change has been made to pages S-9 and S-96 of the
Prospectus Supplement.
13. Under Item 1110(a) of Regulation AB, the Registrant must identify, any
originator, apart from the sponsor or its affiliates, that originated,
or is expected to originate, 20% or more of the pool assets. Under the
Prospectus Supplement, the mortgage loan seller, Wachovia Bank,
National Association, is also a sponsor of the transaction and, as
such, should not be identified as an originator. The Registrant asks
the Staff to note page S-70 where the Registrant has placeholders for
significant originators to be identified for each applicable series.
14. The Registrant has informed us that while it does not currently intend
to issue any series of certificates without Wachovia Bank, National
Association being a sponsor, the Registrant does not wish to limit its
ability to do so in the future.
15. The Registrant confirms that it will provide the disclosure required
under Item 1110 of Regulation AB. The Registrant asks the Staff to note
page S-70 of the Prospectus Supplement.
16. Item 1107(j) of Regulation AB requires disclosure of "expenses incurred
in connection with the selection and acquisition of the pool assets
[that] are to be payable from
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CADWALADER
offering proceeds." It is not typical in CMBS transactions for the Item
1107(j) expenses to be applicable; however, in the event that such
expenses are applicable for any series, the Registrant confirms that it
will provide the disclosure required thereby.
17. The Staff's requested change has been made to page S-63 of the
Prospectus Supplement.
18. The Staff's requested change has been made to pages 7-8 of the Base
Prospectus.
19. The Registrant has revised the Base Prospectus on page 10 to identify
only the cash flow agreements that will be reasonably contemplated in
an actual takedown: guaranteed investment contracts, interest rate swap
or exchange contracts, interest rate cap or floor agreements, cash flow
derivatives, total return swaps, timing swaps, currency exchange
agreements and yield supplement agreements. The related Prospectus
Supplement for each applicable series will disclose the information
required by Item 1115 of Regulation AB.
20. The Registrant confirms that it will not include in the asset pool any
derivative agreement that could be used to synthetically create a
non-ABS product whose payment would be based primarily by reference to
a discrete set of assets other than the performance of the receivables
or other financial assets in the asset pool.
21. The Registrant will undertake to update the Prospectus Supplement on a
series-by-series basis to provide the delinquency information as
required by Item 1111(c) of Regulation AB. The statement indicating
that none of the mortgage loans were 30 or more days delinquent as of
the cut-off date on page S-53 of the Prospectus Supplement has been
bracketed and a placeholder inserted to indicate the disclosure
required by Item 1111(c) will be provided, if applicable.
22. The Registrant has revised the Base Prospectus on page 57 to specify
that any indices it will use as a basis for any certificates offered
with a variable interest rate will be standard indices that measure
interest in debt transactions.
23. The Staff's requested change to delete references which indicate
additional credit enhancements may be added in the Prospectus
Supplement have been made on pages 10 and 76 of the Base Prospectus.
24. The Staff's requested change has been made to page 76 of the Base
Prospectus.
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CADWALADER
25. The President of the Registrant is its Chief Executive Officer. The
Staff's requested change has been made to the signature page on Form
S-3.
26. The Staff's requested change to provide new undertakings as required
under the Securities Offering Reform has been made on Part II of the
Form S-3.
The Registrant hopes the Staff will find the above responses and the enclosed
submission responsive to its comments. Any questions concerning the same may be
directed to the undersigned at (704) 348-5258.
Best regards,
Stuart N. Goldstein, Esq.
cc: Timothy F. Danello, Esq.
Lars A. Carlsten, Esq.
Wayne M. Fitzgerald, Esq.