Fitch Ratings has upgraded one class, downgraded one class, and affirmed 11 classes of LB-UBS Commercial Mortgage Trust (LBUBS) commercial mortgage pass-through certificates series 2005-C7. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrade to class D reflects the increase in credit enhancement due to significant loan paydown since Fitch's last rating action in September 2015. The downgrade to class G reflects incurred losses on the subordinate tranche. Fitch modeled losses of 3.5% of the remaining pool; expected losses on the original pool balance total 5.6%, including $128.4 million (5.5% of the original pool balance) in realized losses to date. Fitch has designated two loans (10.3%) as Fitch Loans of Concern, including one specially serviced loan (2.5%).

As of the December 2015 distribution date, the pool's aggregate principal balance has been reduced by 96% to $91.4 million from $2.34 billion at issuance. The pool is highly concentrated with only nine of the original 137 loans remaining in the transaction. There are currently no defeased loans. Interest shortfalls are affecting classes G through T.

The specially serviced loan (2.5%) is secured by an 11,872 square foot (sf) retail centre located in Brooksville, FL, approximately 50 miles north of Tampa. The property has experienced cash flow issues due to occupancy declines. As of September 2015, the property was 49% occupied. The loan had transferred to special servicing in March 2015 due to payment default. A foreclosure sale took place in December 2015, where the trust was the winning bidder. The servicer is evaluating its real estate owned (REO) strategy and timing for eventual disposition.

The largest loan in the pool is the 1166 Avenue of the Americas loan (36.7%), which is secured by the condominium interests in a 1.7 million sf class A office building located in New York, NY. The 902,232 sf of collateral, located on floors 22-32 and 33-44, serve as the corporate headquarters for the loan's sponsor, Marsh & McLennan Companies, Inc. (rated 'A-'/Outlook Stable). The collateral is 100% master leased by the sponsor though October 2035. The net operating income (NOI) debt service coverage ratio (DSCR) has remained flat at 1.44x since issuance. The A-note contributed to the trust is pari passu with another $241.6 million A-note with respect to the payment of interest; however, it is senior with respect to the payment of principal. The mortgage has a maturity date in October 2035; however, the pooled trust note is expected to fully amortize by November 2018.

RATING SENSITIVITIES

The Outlook on the 'AAA' rated class D is expected to remain Stable as the class benefits from increasing credit enhancement and continued delevering of the transaction through amortization and repayment of maturing loans. The Positive Outlook on class E reflects the possibility for future upgrades due to an expected increase in credit enhancement as loans mature. Additional downgrades to class F are possible should property performance decline or loans fail to repay at their respective maturity dates.

DUE DILIGENCE USAGE

No third party due diligence was provided or reviewed in relation to this rating action.

Fitch has upgraded the following rating:

--$26.6 million class D to 'AAAsf' from 'BBBsf'; Outlook Stable.

Fitch has downgraded the following rating:

--$17.9 million class G to 'Dsf' from 'Csf'; RE 80%.

Fitch has affirmed the following ratings and revised Rating Outlooks as indicated:

--$23.5 million class E at 'BBsf'; Outlook to Positive from Stable;

--$23.5 million class F at 'CCCsf'; RE 100%;

--$0 class H at 'Dsf'; RE 0%;

--$0 class J at 'Dsf'; RE 0%;

--$0 class K at 'Dsf'; RE 0%;

--$0 class L at 'Dsf'; RE 0%;

--$0 class M at 'Dsf'; RE 0%;

--$0 class N at 'Dsf'; RE 0%;

--$0 class P at 'Dsf'; RE 0%;

--$0 class Q at 'Dsf'; RE 0%;

--$0 class S at 'Dsf'; RE 0%.

The class A-1, A-2, A-3, A-AB, A-4, A-1A, A-M, A-J, B, C, CM-1, CM-2, CM-3, and CM-4 certificates have paid in full. Fitch does not rate the class T certificate. Fitch previously withdrew the ratings on the interest-only class X-CP and X-CL certificates.

Fitch does not rate the SP-1 through SP-7 rake classes, which are specific to the Station Place I $63 million B-note. The senior A-note for Station Place I was part of the pooled portion of the trust, which has since paid in full.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

U.S. and Canadian Fixed-Rate Multiborrower CMBS Surveillance and U.S. Re-REMIC Criteria (pub. 13 Nov 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=873395

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=997567

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=997567

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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