Fitch Upgrades 5 Classes and Downgrades 1 Distressed Class of WBCMT 2007-WHALE 8

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has upgraded five classes, downgraded one class, and affirmed six classes of Wachovia Bank Commercial Mortgage Trust (WBCMT) series 2007-WHALE 8. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The upgrades reflect the increase in credit enhancement due to significant loan pay down since Fitch's last rating action. The downgrade on class L reflects losses incurred to the class. The pool has paid down $717 million since April 2014 including full loan repayments of the $46 millionJames Hotel loan in August 2014, the $53.8 millionSouth East Multifamily Pool loan in February 2015, and the $599 millionLXR Hospitality Pool (LXR Pool) loan in March 2015. The Longhouse Hospitality Portfolio (Longhouse Portfolio) has also paid down approximately $17.7 million over the past 12 months from amortization and scheduled principal payments. In addition, $55 million in proceeds from the LXR Pool sales have paid in full the LXR-1 rake bond class, leaving $68.3 million outstanding on the LXR-2 rake bond.

As of the April 2015 distribution date, the pools aggregate principal balance has been reduced by 90.3% to $169.9 million from $1.76 billion at issuance. The transaction is highly concentrated collateralized by three loans all secured by hotel properties. Two of the loans secure the pooled portion of the trust: The $118.9 million Longhouse Portfolio (70% of the pool balance) and the $51 million Four Seasons Nevis (30%). Both the Longhouse Portfolio and the Four Seasons Nevis have additional debt of $15 million and $7.4 million, respectively, in the form of non-pooled rake bonds (LP-1, LP-2, LP-3 and FSN-1, FSN-2, FSN-3). The remaining $68.3 million loan for the LXR Pool secures the non-pooled LXR-2 rake bond. All three loans have additional subordinate B-Note or mezzanine debt outside of the transaction.

All three loans are in special servicing. Both the Longhouse Portfolio and the LXR Pool have forebearance agreements in place scheduled to expire in 2015. The Four Seasons Nevis is real estate owned (REO). The final rated maturity for the transaction is June, 2020.

RATING SENSITIVITIES

To determine a sustainable Fitch cash flow and stressed value, Fitch analyzed servicer-reported operating statements (year end 2014), Smith Travel Research (STR) reports, and updated property valuations. Fitch took additional adjustments to cash flow and values to account for foreign sovereign exposure, though minimal relative to loan size and transaction size in the case of the Four Seasons Nevis. Additional information regarding sovereign risk and structured bonds can found in Fitch's 'Criteria for Sovereign Risk in Developed Markets for Structured Finance and Covered Bonds', published Feb. 20, 2015.

Ratings on classes E, F, and G are expected to remain stable due to sufficient credit enhancement as well as strong recovery prospects in association with expected near-term payoffs. Class E is capped at 'Asf' as it previously incurred interest shortfalls. Fitch will not assign or maintain 'AAAsf' or 'AAsf' ratings for notes that it believes have a high level of vulnerability to interest shortfalls or deferrals, even if permitted under the terms of the documents (see 'Criteria for Rating Caps and Limitations in Global Structured Finance Transactions', dated May 28, 2014, for more details). Future downgrades to the distressed classes (those rated below 'B') are likely given the expected losses associated with the Four Seasons Nevis loan.

The largest loan, the Longhouse Hospitality Portfolio (70%), is secured by 42 extended stay lodging properties (approximately 5,600 keys) located throughout 11 states and 21 distinct metropolitan statistical areas (MSAs). Major markets include Atlanta, New Orleans, Orlando, Houston and Dallas. The loan transferred to the special servicer in May 2012 in advance of its June 2012 extended maturity; the loan originally matured in June 2009. A forbearance agreement was reached in December 2012, which is currently set to expire in June 2015. The sponsor has nearly completed a two phase $18 million capital improvement plan, which has helped increase property performance. As of year-end (YE) 2014, occupancy reported at 76%, compared to 58.7% at YE 2013. As of trailing twelve month (TTM) September 2014, the average daily rate (ADR) reported at $36.24, and RevPAR at $27.45 compared to YE 2013 at $36.70 ADR, and $21.55 RevPAR.

The REO property is the Four Seasons Nevis (30%).

The collateral consists of a 196-key hotel located in Charlestown, Nevis. The hotel, which was built in 1991, is the largest full-service luxury resort on the island of Nevis in the West Indies. The property sits on 346 acres and provides amenities such as a private beach, two swimming pools, five food and beverage outlets, 5,600 square feet (sf) of flexible meeting and ballroom space, 10 tennis courts, an 18-hole golf course, and 14,000 sf of health club facilities. The property suffered hurricane damage and was subsequently closed in October 2008. The special servicer foreclosed on the property in May 2010. The property has since been repaired and re-opened for business in December 2010. To date the servicer has advanced over $40 million, including towards repairs, $9.3 million towards operations, $6.3 million for insurance, and $6.7 million for interest on advances. The property is currently being marketed for sale. Fitch modeled a significant loss based on a haircut to the current appraised value and accounting for the significant servicer advances.

The remaining LXR Hospitality Pool loan secures the LXR-2 rake bond. The remaining collateral includes four luxury resorts totaling 1,862 rooms. All of the properties are under management and affiliation agreements with various Hilton brands under Blackstone's LXR platform. Three of the properties are located in Puerto Rico and contain a casino/gaming component: El Conquistador Golf Resort and Casino, El San Juan Hotel and Casino, and Condado Plaza Hotel and Casino. The fourth property, The Boulders Resort & Golden Door Spa, is a 160 room hotel located in Carefree, Arizona. The property is currently under contract for sale with an anticipated closing date at the end of April 2015, with proceeds sufficient to repay the non-pooled LXR-2 rake bond in full on the May payment date.

Fitch has upgraded the following classes:

--$18.6 million class E to 'Asf' from 'CCCsf'; Outlook Stable Assigned;

--$46.6 million class F to 'BBBsf' from 'CCCsf'; Outlook Stable Assigned;

--$46.6 million class G to 'Bsf' from 'CCsf'; Outlook Stable Assigned;

--$68.3 million class LXR-2 to 'BBsf' from 'Csf'; Outlook Stable Assigned;

--$3.8 million class LP-1 to 'CCCsf' from 'Csf'; RE 100%;

Fitch downgrades the following class:

--$12.3 million class L to 'Dsf' from 'Csf'; RE 0%.

Fitch affirms the following classes:

--$30.5 million class H at 'CCsf'; RE 65%;

--$10.1 million class J at 'Csf'; RE 0%;

--$5.2 million class K at 'Csf'; RE 0%;

--$9.1 million class LP-2 at 'Csf'; RE 0%;

--$2.1 million class LP-3 at 'Csf'; RE 0%;

--$3.3 million class FSN-1 at 'Csf'; RE 0%.

The pooled A-1, A-2, B, C, D and the interest only X-1A classes have paid in full. Fitch previously withdrew the rating on the interest only X-1B class. In addition the non-pooled LXR-1, AP-1, AP-2, FA, HH-1, and MH-1 rake classes have paid in full. Fitch does not rate the non-pooled AP-3, AP-4, HH-2, FSN-2, and MH-2 rake classes.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (March 31, 2015);

--'Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transaction' (March 20, 2015);

--'Criteria for Sovereign Risk in Developed Markets for Structured Finance and Covered Bonds' (Feb. 20, 2015);

--'Criteria for Rating Caps and Limitations in Global Structured Finance Transactions' (May 28, 2014).

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=983511

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Fitch Ratings

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Source: Fitch Ratings