OREANDA-NEWS. February 09, 2015. Fitch Ratings has affirmed The Trafford Centre Finance Limited's commercial mortgage-backed securities, as follows:

GBP2.2m class A1 (N) (XS0222487158) due 2015 affirmed at 'AAAsf'; Outlook Stable
GBP326.6m class A2 (XS0108039776) due 2033 affirmed at 'AAAsf'; Outlook Stable
GBP188.5m class A3 (XS0222488396) due 2038 affirmed at 'AAAsf'; Outlook Stable
GBP20m class A4 (XS1031620849) due 2024 affirmed 'AAAsf'; Outlook Stable
GBP82.6m class B (XS0108043968) due 2029 affirmed at 'AAsf'; Outlook Stable
GBP20m class B2 (XS0222489014) due 2038 affirmed at 'AAsf'; Outlook Stable
GBP20m class B3 (XS1031629808) due 2029 affirmed 'AAsf'; Outlook Stable
GBP29.1m class D1 (N) (XS0222489873) due 2035 affirmed at 'BBBsf'; Outlook Stable
GBP50m class D2 (XS0108046474) due 2022 affirmed at 'BBBsf'; Outlook Stable
GBP70m class D3 (XS1031633313) due 2029 affirmed 'BBBsf'; Outlook Stable

The transaction is a securitisation of rental income derived from Intu Trafford Centre, a super-regional shopping centre in the north west of England, located four miles west of Manchester city centre.

KEY RATING DRIVERS
The affirmations are driven by the stable performance of lease income in the loan collateral. Debt service coverage declined to 1.33x (as of the September 2014 interest payment date) from 1.47x a year ago due to a GBP110m tap issue in March 2014. The collateral benefits from a strong income profile with a weighted average lease length to first break (WALL) of 7.8 years.

The property is let to 195 tenants and thus benefits from a granular and diverse income profile with no tenant accounting for more than 3.3% of passing rent. The top 10 tenants provide 26% of passing rent, with a WALL of 11.2 years. The anchor tenants (Next, Selfridges, Boots BHS, Marks & Spencer, H&M) provide a strong base to attract smaller tenants and ensure a stable level of occupancy (currently at 96%).

The sponsor, Intu Properties, included within its half yearly results to June 2014 an updated valuation for the centre of GBP2,113bn, higher than the GBP1.821bn reported at the closing of the second tap issue. Coupled with loan scheduled amortisation of GBP12.6m, the loan-to-value ratio has fallen to 38.3%, from 45.1% in April 2014.

RATING SENSITIVITIES
A subdued retail environment could have a detrimental effect on the performance of the collateral and prompt negative rating action. Upgrades are limited by the sponsor's ability to tap the structure for more debt funding.

Fitch estimates 'Bsf' proceeds to be GBP1,116m.

Fitch will continue to monitor the performance of the transaction.

For more surveillance data, see link below: https://www.fitchratings.com/creditdesk/sectors/perf_analytics/esf/esf_detail.cfm?deal_id=87148801§or_flag=43a&deal_nm=Trafford%20Centre%20Finance%20Ltd%2E%20%28The%29%20The%20Trafford%20Centre%20Finance%20Ltd


Contacts:
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Mbarek Wadil
Analyst
+44 20 3530 1162
Fitch Ratings Limited
30 North Colonnade
London E14 5GN

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Galen Moloney
Senior Director
+44 20 3530 1561

Media Relations: Athos Larkou, London, Tel: +44 203 530 1549, Email: athos.larkou@fitchratings.com.

Additional information is available at www.fitchratings.com.

The sources of information used to assess these ratings were the issuer, servicer, and periodic cash manager and servicer reports.