(The following statement was released by the rating agency)
Aug 03 -
-- We lowered our ratings on the class A and B notes to 'A (sf)' due to counterparty risk.
-- EPIC (More London) is a CMBS transaction that is secured by a single loan with six real estate assets in the More London commercial scheme in Central London.
-- These ratings are based on our criteria for rating European CMBS. However, these criteria are under review. As a result of this review, our future European CMBS criteria may differ from the current criteria. The criteria change may affect the ratings on all outstanding notes in this transaction.
Standard & Poor's Ratings Services today lowered and removed from CreditWatch negative its credit ratings on the class A and B notes issued by Epic (More London) PLC. Our ratings on the class C to F notes in this transaction remain unaffected by today's rating actions (see list below).
The Royal Bank Of Scotland PLC (A/Stable/A-1) provides liquidity support in this transaction.
The liquidity facility documents in this transaction do not incorporate a replacement framework in line with our 2012 counterparty criteria (see 'Counterparty Risk Framework Methodology And Assumptions,' published on May 31, 2012).
Our 2012 counterparty criteria generally caps our rating on supported securities at the issuer credit rating (ICR) on the counterparty if the terms of agreement with the counterparty do not incorporate replacement mechanisms or equivalent remedies, and if there are no other mitigating factors.
On Jan. 31, 2012, we placed our ratings on the class A and B notes on CreditWatch negative, after we lowered our long-term rating to 'A' from 'A+' on the liquidity facility provider, The Royal Bank Of Scotland PLC (A/Stable/A-1).
In line with our 2012 counterparty criteria, we have lowered to 'A (sf)' our ratings on the class A and B notes in line with our 'A' long-term rating on The Royal Bank of Scotland as liquidity facility provider.
A single loan, secured on six properties in the More London commercial scheme, Central London, backs this transaction.
POTENTIAL EFFECTS OF PROPOSED CRITERIA CHANGES
We have taken today's rating actions based on our criteria for rating European CMBS. However, these criteria are under review (see 'Advance Notice Of Proposed Criteria Change: Methodology And Assumptions For Rating European Commercial Mortgage-Backed Securities,' published on Nov. 8, 2011).
As highlighted in the Nov. 8 Advance Notice Of Proposed Criteria Change, our review may result in changes to the methodology and assumptions we use when rating European CMBS, and consequently, it may affect both new and outstanding ratings on European CMBS transactions.
On June 4, we published a request for comment (RFC) outlining our proposed criteria changes for CMBS Global Property Evaluation Methodology. The proposed criteria do not significantly change Standard & Poor's longstanding approach to deriving property net cash flow (S&P NCF) and value (S&P Value). We therefore anticipate limited impact for European outstanding ratings when the updated CMBS Global Property Evaluation Methodology criteria are finalized.
However, because of its global scope, the proposed CMBS Global Property Evaluation Methodology does not include certain market-specific adjustments. An application of these criteria to European Transactions will therefore be published when we release our updated rating criteria.
Until such time that we adopt new criteria for rating European CMBS, we will continue to rate and monitor these transactions using our existing criteria (see 'Related Criteria And Research').
RELATED CRITERIA AND RESEARCH
-- Counterparty Risk Framework Methodology And Assumptions, May 31, 2012
-- European Structured Finance Scenario And Sensitivity Analysis: The Effects Of The Top Five Macroeconomic Factors, March 14, 2012
-- Request For Comment: CMBS Global Property Evaluation Methodology, June 4, 2012
-- S&P's CreditWatch Placements On 122 European CMBS Tranches At Jan. 31, 2012, Jan. 31, 2012
-- Royal Bank of Scotland Long-Term Rating Lowered To 'A' On Bank Criteria Change; S-T Rating Affirmed; Outlook Stable, Nov. 29, 2011
-- Global Structured Finance Scenario And Sensitivity Analysis: The Effects Of The Top Five Macroeconomic Factors, Nov. 4, 2011
-- Advance Notice Of Proposed Criteria Change: Methodology And Assumptions For Rating European Commercial Mortgage-Backed Securities, Nov. 8, 2011
-- European CMBS Loan Level Guidelines, Sept. 1, 2004
-- European CMBS Monthly Bulletin, published monthly
EPIC (More London) PLC
GBP670 Million Commercial Mortgage-Backed Floating-Rate Notes
Ratings Lowered and Removed From CreditWatch Negative
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