TORONTO, Jan. 18 /CNW/ - Merrill Lynch Financial Assets Inc. announced today the occurrence of a monetary event of default in respect of a subordinate B Loan relating to two (2) Senior Loans included in the C-19 and C-20 Securitizations (as described below) has resulted in a Triggering Event of Default under the related Co-Lender Agreement (as defined below). As a result, Midland Loan Services, Inc. (the "Servicer") issued a Purchase Option Notice to Northcastle Loan LP ("Northcastle") on January 12, 2010 pursuant to Section 10(1) of the Co-Lender Agreement which entitles Northcastle 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 Northcastle exercises this option to purchase the Senior Loans, the Company expects that the price of the Class XC certificates in each of the C-19 Securitization and C-20 Securitization will be materially and adversely affected.
The Senior Loans affected are: (a) Loan Control No. 4 (the "C-19 Senior Loan") in the securitization known as Merrill Lynch Financial Assets Inc. (as Issuer), Commercial Mortgage Pass-Through Certificates, Series 2006 - Canada 19 (the "C-19 Securitization") issued pursuant to a Short Form Prospectus dated June 14, 2006; and (b) Loan Control No. 8 (the "C-20 Senior Loan" and together with the C-19 Senior Loan, collectively, the "Senior Loans") in the securitization known as Merrill Lynch Financial Assets Inc. (as Issuer), Commercial Mortgage Pass-Through Certificates, Series 2006 - Canada 20 (the "C-20 Securitization") issued pursuant to a Short Form Prospectus dated October 20, 2006.
The C-19 Senior Loan, having a current principal balance of approximately $25,893,003.83 and the C-20 Senior Loan, having a current principal balance of approximately $25,893,003.83 are two of three companion loans secured by first mortgages secured by five (5) hotel mortgaged properties located in the Province of Ontario. The Senior Loans have been separately securitized in the C-19 Securitization and C-20 Securitization and are held by Computershare Trust Company of Canada, as custodian and nominee for certificateholders in the related securitizations. The third companion loan secured by the same first mortgages (the "B Loan"), having a current principal balance of $23,000,000, is subordinate to the Senior Loans and is held by Northcastle. The rights and obligations of the holders of the Senior Loans and the B Loan are governed by a Co-Lender Agreement dated October 27, 2005 between Merrill Lynch Capital Canada Inc., as Initial Note A-1 Lender, Merrill Lynch Capital Canada Inc., as Initial Note A-2 Lender and Northcastle Loan LP, as Initial Note B Lender (as amended and assigned from time to time) (the "Co-Lender Agreement"). The Co-Lender Agreement was filed on SEDAR on June 23, 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 provides unmatched convenience in the United States, serving approximately 53 million consumer and small business relationships with 6,000 retail banking offices, more than 18,000 ATMs and award-winning online banking with more than 29 million active users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to more than 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients in more than 150 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.
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 FINANCIAL ASSETS INC.
For further information: For further information: John Yiannacopoulos, (646) 855-2314