OREANDA-NEWS. S&P Global Ratings today raised its ratings on five classes of commercial mortgage pass-through certificates from Banc of America Commercial Mortgage Trust 2006-6, a U. S. commercial mortgage-backed securities (CMBS) transaction. In addition, we affirmed our 'AAA (sf)' rating on the class XC interest-only (IO) certificates and discontinued our 'AAA (sf)' rating on the class A-3 certificates following its full repayment as noted in the July 2016 trustee remittance report (see list).

The upgrades on the principal - and interest-paying certificates follow our analysis of the transaction, primarily using our criteria for rating U. S. and Canadian CMBS transactions, which included a review of the credit characteristics and performance of the remaining assets in the pool, the transaction's structure, and the liquidity available to the trust. The raised ratings also reflect our expectation of the available credit enhancement for these classes, which we believe is greater than our most recent estimate of necessary credit enhancement for the respective rating levels, our views regarding the current and future performance of the transaction's collateral, and the trust balance's significant reduction.

We discontinued our rating on class A-3 because it has paid off in full per the July 11, 2016, trustee remittance report.

We affirmed our 'AAA (sf)' rating on the class XC IO certificates based on our criteria for rating IO securities.

TRANSACTION SUMMARY

As of the July 11, 2016, trustee remittance report, the collateral pool balance was $1.26 billion, which is 51.3% of the pool balance at issuance. The pool currently includes 62 loans and one real estate-owned (REO) asset (reflecting cross-collateralized loans and subordinate B hope notes), down from 116 loans at issuance. Five of these assets ($80.5 million, 6.4%) are with the special servicer, five loans ($54.5 million, 4.3%) are defeased, and 31 loans ($592.8 million, 46.9%) are on the master servicer's watchlist. The master servicer, KeyBank Real Estate Capital, reported financial information for 100.0% of the nondefeased loans in the pool, of which 1.4% was partial-year 2016 data, 97.1%, was partial or year-end 2015 data, and the remainder was year-end 2014 data.

We calculated a 1.35x S&P Global Ratings' weighted average debt service coverage (DSC) and 94.2% S&P Global Ratings' weighted average loan-to-value (LTV) ratio using a 7.87% S&P Global Ratings' weighted average capitalization rate. The DSC, LTV, and capitalization rate calculations exclude the specially serviced assets, the defeased loans, and the three subordinate B hope notes ($100.1 million, 7.9%). The top 10 nondefeased assets have an aggregate outstanding pool trust balance of $1.0 billion (79.9%). Using servicer-reported numbers, we calculated an S&P Global Ratings' weighted average DSC and LTV of 1.34x and 99.9%, respectively, for eight of the top 10 nondefeased assets. The remaining two assets are specially serviced and discussed below.

To date, the transaction has experienced $43.4 million in principal losses, or 1.8% of the original pool trust balance. We expect losses to reach approximately 3.3% of the original pool trust balance in the near term, based on losses incurred to date and additional losses we expect upon the eventual resolution of the specially serviced assets.

CREDIT CONSIDERATIONS

As of the July 11, 2016, trustee remittance reports, five assets in the pool were with the special servicer, CWCapital Asset Management LLC (CWCapital). Details of the three largest specially serviced assets, two of which are top 10 nondefeased assets, are as follows:

The 1700 Twinbrook Office Center REO asset ($39.0 million, 3.1%), the fifth-largest nondefeased asset in the pool has a total reported exposure of $48.6 million. The asset is a 162,357-sq.-ft. class B office building in Rockville, Md. The loan was transferred to the special servicer on June 8, 2009, because of cash flow shortfalls as a result of low occupancy. The property became REO on Sept. 14, 2010. The reported DSC and occupancy as of year-end 2015 were 0.48x and 76.2%, respectively. CWCapital reported to us that the asset was recently sold, and we expect a moderate loss upon its eventual resolution.

The Merced Marketplace A and B loan (aggregate balance of $22.0 million, 1.7%), the ninth-largest nondefeased asset in the pool, has a total reported exposure of $22.0 million. The loan is secured by a 113,124-sq.-ft. retail property in Merced, Calif. The loan was transferred back to the special servicer on July 1, 2016, because of monetary default. The loan, which has a current payment status, was previously modified on Oct. 10, 2012, and the modification terms included, among other items, splitting the loan into a $15.1 million A note and a $6.9 million subordinate B hope note. The reported DSC and occupancy as of year-end 2015 were 1.05x and 89.7%, respectively. We expect a minimal loss on the A note and no recovery on the B note upon this loan's eventual resolution.

The Marketplace College Ave. loan ($15.4 million, 1.2%) has a total reported exposure of $16.2 million. The loan is secured by a 241,048-sq.-ft. retail property in Appleton, Wis. The loan, which has a reported 90-day delinquent payment status, was transferred to the special servicer on July 7, 2016, because of imminent maturity default. The reported DSC for the nine months ended Sept. 30, 2015, was 0.69x, and the reported occupancy as of June 1, 2016, was 73.0%. A $7.7 million appraisal reduction amount is in effect against the loan. We expect a moderate loss upon this loan's eventual resolution.

The two remaining assets with the special servicer each have individual balances that represent less than 0.3% of the total pool trust balance. We estimated losses for the five specially serviced assets, arriving at a weighted average loss severity of 46.2%.

With respect to the specially serviced assets noted above, a minimal loss is less than 25%, a moderate loss is 26%-59%, and a significant loss is 60% or greater.