TORONTO, Oct. 30 /CNW/ - Merrill Lynch Financial Assets Inc. announced today the occurrence of a non-monetary event of default in respect of the Senior Loan in connection with each of the C-17 and C-18 Securitizations (as described below) has resulted in a Triggering Event of Default under the Co-Lender Agreement (as defined below). As a result, Midland Loan Services, Inc. (the "Servicer") issued a Purchase Option Notice to King Sett Real Estate Mortgage GP No. 3 Inc., as general partner of King Sett Real Estate Mortgage LP No. 3 ("KingSett") on October 21, 2009 pursuant to Section 10(1) of the Co-Lender Agreement which entitles KingSett to exercise a limited option, for a period up to 60 days, to purchase the Senior Loans for a purchase price (as more particularly described in the Co-Lender Agreement) which is generally equal to par.
In the event that KingSett exercises this option to purchase the Senior Loans, the Company expects that the price of certain certificate classes in each of the C-17 Securitization and C-18 Securitization (including, but not limited to, the Class XP-1, XP-2 and XC certificates in each securitization) will be materially and adversely affected.
The Senior Loans affected are: (a) Loan Control No. 1 (the "C-17 Senior Loan") in the securitization known as Merrill Lynch Financial Assets Inc. (as Issuer), Commercial Mortgage Pass-Through Certificates, Series 2005 - Canada 17 (the "C-17 Securitization") issued pursuant to a Short Form Prospectus dated November 29, 2005; and (b) Loan Control No. 1 (the "C-18 Senior Loan") in the securitization known as Merrill Lynch Financial Assets Inc. (as Issuer), Commercial Mortgage Pass-Through Certificates, Series 2006 - Canada 18 (the "C-18 Securitization") issued pursuant to a Short Form Prospectus dated March 6, 2006.
The C-17 Senior Loan, having a current principal balance of approximately $70,431,000 and the C-18 Senior Loan, having a current principal balance of approximately $57,626,000 are two of three companion loans secured by first mortgages secured by twenty-eight (28) multi-family mortgaged properties in the provinces located in the Provinces of Ontario and Nova Scotia. The Senior Loans have been separately securitized in the C-17 Securitization and C-18 Securitization and are held by Computershare Trust Company of Canada, as custodian and nominee for certificateholders in the related securitizations. Each Senior Loan is the largest loan in the mortgage loan pool of the related securitization. The third companion loan secured by the same first mortgages (the "Subordinate Loan"), having a current principal balance of approximately $12,835,000, is subordinate to the Senior Loans and is held KingSett. The rights and obligations of the holders of the Senior Loans and the Subordinate Loan are governed by a Co-Lender Agreement dated December 1, 2005 between Merrill Lynch Capital Canada Inc., as Initial A-1 Lender, Merrill Lynch Capital Canada Inc., as Initial A-2 Lender and Merrill Lynch Capital Canada Inc., as Initial B Lender (as amended and assigned from time to time) (the "Co-Lender Agreement"). The Co-Lender Agreement was filed on SEDAR on January 10, 2006 as a material contract.
Merrill Lynch Financial Assets Inc. is a special purpose issuer corporation that issues asset-backed securities in the private and public capital markets.
Bank of America
Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company's corporate and investment banking, and sales and trading businesses operate under the Bank of America Merrill Lynch brand. Bank of America Merrill Lynch focuses on middle-market and large corporations, institutional investors, financial institutions and government entities. It provides innovative services in M&A, equity and debt capital raising, lending, trading, risk management, research, and liquidity and payments management. Bank of America Merrill Lynch serves clients in more than 150 countries and has relationships with 99 percent of the U.S. Fortune 500 companies and nearly 96 percent of the Fortune Global 500.
Bank of America Merrill Lynch is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation ("Investment Banking Affiliates"), including, in the United States, Banc of America Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, which are both registered broker-dealers and members of FINRA and SIPC, and, in other jurisdictions, locally registered entities. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured * May Lose Value * Are Not Bank Guaranteed
SOURCE MERRILL LYNCH
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