Fitch Affirms MLFT 2006-1

NEW YORK--()--Fitch Ratings has affirmed the three remaining classes of Merrill Lynch Floating Trust pass-through certificates, series 2006-1. The affirmations of the distressed ratings are due to continued credit risk associated with the outstanding two loans.

As of the November 2012 remittance, the pool has paid down by 98% since issuance, with two loans remaining in the trust, both of which are in special servicing. Since Fitch's last rating action, two loans paid in full, including the Lord & Taylor portfolio which resulted in significant pay down to the trust.

The largest of the remaining two loans is secured by six full-service hotels in Mexico, located within five distinct tourist markets, including Cancun, Cozumel, Ixtapa, Acapulco, and San Jose del Cabo. The loan has been in special servicing since February 2010 after the borrower amended certain operating leases without lender approval. The servicer continues to negotiate with all parties to the loan, and the involvement of both the U.S. and Mexican legal systems complicates the workout. According to the servicer, litigation surrounding the workout may face a long horizon as the borrower and principals continue to use their influence in Mexico to delay foreclosure proceedings. Nevertheless, fairly recent value estimates for the portfolio indicate strong recovery prospects. Ultimate recovery however may be affected by a long workout window if advances continue to accrue.

The other remaining loan is Crowne Plaza San Antonio, a 410-room hotel located in San Antonio, TX. The loan transferred to special servicing in February 2012 for a technical default and for facing imminent maturity default, which occurred on June 11, 2012. The loan is paid through Oct. 15, 2012; the November 2012 payment has not yet been received. A receiver has been appointed and management was replaced. The special servicer continues to discuss workout options at this time.

Fitch affirms the following classes:

--$18.8 million class K at 'CCCsf'; RE 100%;

--$31.1 million class L at 'CCCsf'; RE 100%;

--$48.2 million class M at 'Dsf'; RE 90%.

These rating actions reflect the application of Fitch's current criteria which are available at 'www.fitchratings.com' under

Structured Finance >> CMBS >> Criteria Reports

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (June 6, 2012);

--'Surveillance Criteria for U.S. CREL CDOs and CMBS Large Loan Floating-Rate Transactions' (Dec. 1, 2011).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679923

Surveillance Criteria for U.S. CREL CDOs and CMBS Large Loan Floating-Rate Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=695733

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