| UNITED STATES | |||||||||
| SECURITIES AND EXCHANGE COMMISSION | |||||||||
| Washington, D.C. 20549 |
| FORM 10-K | |||||||||
| (Mark One) | |||||||||
| ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||||||
| For the fiscal year ended December 31, 2017 | |||||||||
| or | |||||||||
| ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||||||
| For the transition period from _____________ to _____________ |
| Commission file number of the issuing entity: 001-33286 | |||||||||
| Central Index Key Number of Issuing Entity: 0001387637 | |||||||||
| filed on behalf of: | |||||||||
| CORPORATE BACKED CALLABLE TRUST CERTIFICATES, J.C. PENNEY DEBENTURE-BACKED SERIES 2007-1 | |||||||||
| (Exact Name of Registrant as Specified in its Charter) |
| by: | |||||||||
| Select Asset Inc. | |||||||||
| (Exact Name of Depositor as Specified in its Charter) | |||||||||
| Commssion File Number of Depositor: 333-112795 | |||||||||
| Central Index Key Number of Depositor: 0001221546 |
| Delaware | 13-4029392 | ||||||||
| (State or other jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | ||||||||
| 277 Park Avenue | |||||||||
| New York, New York | 10172 | ||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||
| Registrant’s telephone number, including area code: (646) 285-9000 |
| Title of Each Class | Name of Each Exchange on Which Registered | ||||||||
| Corporate Backed Callable Trust Certificates, J.C. | New York Stock Exchange ("NYSE") | ||||||||
| Penney Debenture-Backed Series 2007-1, Class A-1 | |||||||||
| Securities registered pursuant to Section 12(g) of the Act: None. |
| Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ No |
| Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒ No |
| Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No |
| Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). | |||||||||
| Not applicable. |
| Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. | |||||||||
| Not applicable. |
| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer", "accelerated filer", and "smaller reporting company" in Rule 12b-2 of the Exchange Act. | |||||||||
| Large accelerated filer ☐ | Accelerated filer ☐ | ||||||||
| Non-accelerated filer ☒ | Smaller reporting company ☐ | ||||||||
| Emerging growth company ☐ | |||||||||
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ |
| Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No |
| State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter. |
| The registrant has no voting stock or class of common stock that is held by non-affiliates. |
| DOCUMENTS INCORPORATED BY REFERENCE | |||||||||
| None. |
| INTRODUCTORY NOTES |
| Select Asset Inc. (the "Depositor") is the Depositor in respect of the Corporate Backed Callable Trust Certificates, J.C. Penney Debenture-Backed Series 2007-1 Trust (the “Trust”), a common law trust formed pursuant to the Standard Terms for Trust Agreements, dated as of November 9, 2006, between the Depositor and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented by a series supplement (the “Series Supplement”) dated as of January 31, 2007 in respect of the Trust. The Trust’s assets consist solely of notes issued by J.C. Penney Corporation, Inc., successor to J.C. Company, Inc. (the “Underlying Securities Issuer”). The Certificates do not represent obligations of or interests in the Depositor or the Trustee. |
| The Depositor is a wholly-owned, indirect subsidiary of Lehman Brothers Holdings Inc. (“LBHI”). On September 15, 2008 and periodically thereafter, LBHI and certain of its subsidiaries (collectively, the “Debtors”) commenced voluntary cases under chapter 11 of title 11 of the United States Code with the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) (jointly administered proceedings, In re Lehman Brothers Holdings Inc. et al., Case Number 08-13555). LBHI and Lehman Brothers Inc. have sold since September 15, 2008 significant businesses, including the sale on September 21, 2008 of the investment banking business to Barclays Capital Inc., which business included the employees who historically conducted the Registrant’s business. The Depositor believes the Trustee has maintained the proper processes and internal controls to monitor the Trust’s cash flows and administer the Trust, as reported in the assertion by the Trustee in the Report on Assessment of Compliance with Applicable Servicing Criteria, attached hereto as Exhibit 33.1. Pursuant to the terms of the Trust Agreement, the Trustee (i) is responsible for administering the Trust and has “full power and authority...to do or cause to be done any and all things in connection with such administration” (Section 3.01 of the Trust Agreement); (ii) is responsible to “make any and all filings, reports, notices or applications with, and seek any comments and authorizations from, the Commission and any state securities authority on behalf of the Trust” (Section 3.01 of the Trust Agreement); and (iii) controls the Certificate Account for each series of certificates (Section 3.03 of the Trust Agreement). |
| On December 6, 2011, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the Modified Third Amended Joint Chapter 11 Plan of Lehman Brothers Holdings Inc. and its Affiliated Debtors (the “Plan”). The Plan and the Confirmation Order were attached as Exhibit 2.1 and Exhibit 2.2, respectively, to LBHI’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 14, 2011. LBHI’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 14, 2011 contains a summary of the Plan. |
| On March 6, 2012 (the “Effective Date”), the Plan became effective and a notice of the Effective Date of the Plan (the “Notice of Effective Date”) was filed with the Bankruptcy Court. |
| J.C. Penney Company, Inc., the guarantor of the underlying securities, is subject to the information reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). For information on J.C. Penney Company, Inc. please see its periodic and current reports filed with the Securities and Exchange Commission (the “Commission”) under its Exchange Act file number, 001-15274. The Commission maintains a site on the World Wide Web at “http://www.sec.gov” at which users can view and download copies of reports, proxy and information statements and other information regarding Issuers that file electronically through the Electronic Data Gathering, Analysis and Retrieval system, or “EDGAR.” Periodic and current reports and other information required to be filed pursuant to the Exchange Act by J.C. Penney Company, Inc. may be accessed on this site. You can request copies of these documents, upon payment of a duplicating fee, by writing to the SEC. The public may read and copy any materials filed with the Commission at the Commission’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. Neither Select Asset Inc. nor the Trustee has participated in the preparation of such reporting documents, or made any due diligence investigation with respect to the information provided therein. Neither Select Asset Inc. nor the Trustee has verified the accuracy or completeness of such documents or reports. There can be no assurance that events affecting the issuer of the Underlying Securities, the underlying securities guarantor or the underlying securities have not occurred or have not yet been publicly disclosed which would affect the accuracy or completeness of the publicly available documents described above. |
| Pursuant to General Instruction J of Form 10-K, the Trust is not required to respond to various items of Form 10-K. Such items are designated herein as “Not Applicable.” Distribution reports detailing receipts and distributions by the Trust are filed after each distribution date on Form 10-D in lieu of reports on Form 10-Q. |
| PART I |
| Item 1. Business. | |||||||||
| Not Applicable |
| Item 1A. Risk Factors. | |||||||||
| Not Applicable |
| Item 1B. Unresolved Staff Comments. | |||||||||
| Not Applicable |
| Item 2. Properties. | |||||||||
| Not Applicable |
| Item 3. Legal Proceedings. | |||||||||
| None |
| Item 4. Submission of Matters to a Vote of Security Holders | |||||||||
| None |
| PART II |
| Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. | |||||||||
| Not Applicable |
| Item 6. Selected Financial Data. | |||||||||
| Not Applicable |
| Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. | |||||||||
| Not Applicable |
| Item 7A. Quantitative and Qualitative Disclosures About Market Risk. | |||||||||
| Not Applicable |
| Item 8. Financial Statements and Supplementary Data. | |||||||||
| Not Applicable |
| Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. | |||||||||
| None |
| Item 9A. Controls and Procedures. | |||||||||
| Not Applicable |
| Item 9A(T). Controls and Procedures. | |||||||||
| Not Applicable |
| Item 9B. Other Information. | |||||||||
| None. |
| PART III |
| Item 10. Directors, Executive Officers and Corporate Governance. | |||||||||
| Not Applicable |
| Item 11. Executive Compensation. | |||||||||
| Not Applicable |
| Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. | |||||||||
| Not Applicable |
| Item 13. Certain Relationships and Related Transactions, and Director Independence. | |||||||||
| None |
| Item 14. Principal Accounting Fees and Services. | |||||||||
| Not Applicable |
| SUBSTITUTE INFORMATION PROVIDED IN ACCORDANCE WITH GENERAL | |||||||||
| INSTRUCTION J(2) TO FORM 10-K. |
| Item 1112(b) of Regulation AB, Significant Obligor Financial Information. | |||||||||
| See Instruductory Note |
| Item 1114(b)(2) of Regulation AB, Credit Enhancement and Other Support, Except for Certain Derivatives Instruments (Information Regarding Significant Enhancement Providers). | |||||||||
| No applicable updates |
| Item 1115(b) of Regulation AB, Certain Derivatives Instruments (Financial Information). | |||||||||
| No applicable updates |
| Item 1117 of Regulation AB, Legal Proceedings. | |||||||||
| No applicable updates |
| Item 1119 of Regulation AB, Affiliations and Certain Relationships and Related Transactions. | |||||||||
| No applicable updates |
| Item 1122 of Regulation AB, Compliance with Applicable Servicing Criteria. | |||||||||
| See Exhibits 33.1 and 34.1 to this Form 10-K |
| Item 1123 of Regulation AB, Servicer Compliance Statement. | |||||||||
| See Exhibit 35 to this Form 10-K |
| PART IV |
| Item 15. Exhibits, Financial Statement Schedules. |
| (a) The following documents have been filed as part of, or incorporated by reference into this annual report. |
| (1) None | |||||||||
| (2) None | |||||||||
| (3) The exhibits filed in response to Item 601 of Regulation S-K are listed in the Exhibit Index. | |||||||||
| (b) The exhibits filed in response to Item 601 of Regulation S-K are listed in the Exhibit Index. | |||||||||
| (c ) None. |
| SIGNATURES |
| Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. |
| Select Asset Inc. | |||||||||
| as Depositor for the Trust (The "Registrant") | |||||||||
| /s/ Clifford S. Feibus | |||||||||
| Name: Clifford S. Feibus | |||||||||
| Title: Senior Vice President and Controller | |||||||||
| (Senior Officer in charge of securitization of the Depositor) | |||||||||
| Date: March 28, 2018 | |||||||||
| EXHIBIT INDEX |
| Reference Number per Item 601 of Regulation SK | Description of Exhibits | Exhibit Number in this Form 10 K | |||||||
Exhibit 33.1
Management’s Assertion
Report on Assessment of Compliance with Applicable Servicing Criteria
U.S. Bank National Association (“U.S. Bank”) is responsible for assessing compliance as of and for the year ended December 31, 2017 with the servicing criteria set forth in Item 1122 (d) of Regulation AB applicable to it as set forth on Exhibit A hereto. This report covers asset backed securities transactions within the U.S. Bank Corporate Trust Repackaging Platform1 (the “Platform”)
U.S. Bank hereby provides the following report on its assessment of compliance with the servicing criteria set forth in Item 1122 of Regulation AB applicable to it and as described on Exhibit A hereto;
| 1. | U.S. Bank is responsible for assessing its compliance with the servicing criteria applicable to it as noted on the accompanying Exhibit A; |
| 2. | Except as provided in paragraph 3 below, U.S. Bank used the criteria set forth in paragraph (d) of Item 1122 of Regulation AB to assess its compliance with the applicable servicing criteria; |
| 3. | The criteria listed in the column titled “Inapplicable Servicing Criteria” on Exhibit A hereto are inapplicable to U.S. Bank based on the servicing activities it performs directly with respect to the Platform; |
| 4. | U.S. Bank has complied, in all material respects, with the applicable servicing criteria as of and for the year ended December 31, 2017; and |
| 5. | Ernst & Young, LLP, a registered public accounting firm, has issued an attestation report on U.S. Bank’s assessment of compliance with the applicable servicing criteria as of and for the year ended December 31, 2017. |
| U.S. BANK NATIONAL ASSOCIATION |
||
| /s/ Joseph Giordano |
||
| Name: Joseph Giordano |
||
| Title: Senior Vice President |
||
Date: February 28, 2018
| 1 | The U.S. Bank Corporate Trust Repackaging Platform (the “Platform”) consists of the activities involved in the performance of servicing functions for publicly issued transactions comprised of the repackaging of corporate debt and/or other agency securities the securities of which were offered on or after January 1, 2006. The Platform does not include asset-backed or mortgage-backed transactions supported by a pool of receivables or other financial assets. |
EXHIBIT A to Management’s Assertion
| Reference |
Servicing Criteria |
Applicable |
Inapplicable Servicing Criteria | |||
| General Servicing Considerations | ||||||
| 1122(d)(l)(i) | Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements. | X | ||||
| 1122(d)(l)(ii) | If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing activities. | X2 | ||||
| 1122(d)(1)(iii) | Any requirements in the transaction agreements to maintain a back-up servicer for the Pool Assets are maintained. | X | ||||
| 1122(d)(1)(iv) | A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements. | X | ||||
| 1122(d)(l)(v) | Aggregation of information, as applicable, is mathematically accurate and the information conveyed accurately reflects the information. | X | ||||
| Cash Collection and Administration | ||||||
| 1122(d)(2)(i) | Payments on pool assets are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days following receipt, or such other number of days specified in the transaction agreements. | X | ||||
| 1122(d)(2)(ii) | Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel. | X | ||||
| 1122(d)(2)(iii) | Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements. | X | ||||
| 1122(d)(2)(iv) | The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of over collateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements. | X | ||||
| 1122(d)(2)(v) | Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, “federally insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-l(b)(1) of the Securities Exchange Act. | X | ||||
| 1122(d)(2)(vi) | Unissued checks are safeguarded so as to prevent unauthorized access. | X | ||||
| 1122(d)(2)(vii) | Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements. | X | ||||
2 No servicing activities were performed by the Company that required the servicing criteria to be complied with Corporate Trust Repackaging Platform 2 |
|
| Reference |
Servicing Criteria |
Applicable |
Inapplicable Servicing Criteria | |||
| Investor Remittances and Reporting | ||||||
| 1122(d)(3)(i) | Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of Pool Assets serviced by the Servicer. | X | ||||
| 1122(d)(3)(ii) | Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements. | X | ||||
| 1122(d)(3)(iii) | Disbursements made to an investor are posted within two business days to the Servicer’s investor records, or such other number of days specified in the transaction agreements. | X | ||||
| 1122(d)(3)(iv) | Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements. | X | ||||
| Pool Asset Administration | ||||||
| 1122(d)(4)(i) | Collateral or security on pool assets is maintained as required by the transaction agreements or related pool asset documents. | X | ||||
| 1122(d)(4)(ii) | Pool assets and related documents are safeguarded as required by the transaction agreements. | X | ||||
| 1122(d)(4)(iii) | Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements. | X3 | ||||
| 1122(d)(4)(iv) | Payments on pool assets, including any payoffs, made in accordance with the related pool asset documents are posted to the Servicer’s obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related pool asset documents. | X | ||||
| 1122(d)(4)(v) | The Servicer’s records regarding the pool assets agree with the Servicer’s records with respect to an obligor’s unpaid principal balance. | X | ||||
| 1122(d)(4)(vi) | Changes with respect to the terms or status of an obligor’s pool assets (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents. | X | ||||
| 1122(d)(4)(vii) | Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements. | X4 | ||||
3 No servicing activities were performed by the Company that required the servicing criteria to be complied with 4 No servicing activities were performed by the Company that required the servicing criteria to be complied with
Corporate Trust Repackaging Platform 3 |
|
| Reference |
Servicing Criteria |
Applicable |
Inapplicable Servicing Criteria | |||
| 1122(d)(4)(viii) | Records documenting collection efforts are maintained during the period a pool asset is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent pool assets including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment). | X5 | ||||
| 1122(d)(4)(ix) | Adjustments to interest rates or rates of return for pool assets with variable rates are computed based on the related pool asset documents. | X | ||||
| 1122(d)(4)(x) | Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor’s pool asset documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable pool asset documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related pool assets, or such other number of days specified in the transaction agreements. | X | ||||
| 1122(d)(4)(xi) | Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements. | X | ||||
| 1122(d)(4)(xii) | Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the Servicer’s funds and not charged to the obligor, unless the late payment was due to the obligor’s error or omission. | X | ||||
| 1122(d)(4)(xiii) | Disbursements made on behalf of an obligor are posted within two business days to the obligor’s records maintained by the servicer, or such other number of days specified in the transaction agreements. | X | ||||
| 1122(d)(4)(xiv) | Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements. | X | ||||
| 1122(d)(4)(xv) | Any external enhancement or other support, identified in Item 1114(a)(l) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements. | X | ||||
5 No servicing activities were performed by the Company that required the servicing criteria to be complied with Corporate Trust Repackaging Platform 4 |
|
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Report of Independent Registered Public Accounting Firm
The Board of Directors
U.S. Bank National Association
We have examined management's assertion, included in the accompanying Report on Assessment of Compliance with Applicable Servicing Criteria, that U.S. Bank National Association (the "Company") complied with the servicing criteria set forth in Item 1122 (d) of the Securities and Exchange Commission's Regulation AB for the U.S. Bank Corporate Trust Repackaging Platform (the "Platform"), for which the company provides servicing functions for publicly issued transactions comprised of the repackaging of corporate debt and/or other agency securities, as of and for the year ended December 31, 2017, except for servicing criteria 1122 (d)(1)(i), 1122 (d)(1)(iii), 1122 (d)(1)(v), 1122 (d)(2)(iii), 1122 (d)(4)(i), 1122 (d)(4)(vi) and 1122 (d)(4)(ix)-(xv), which the Company has determined are not applicable to the activities performed by them with respect to the servicing platform covered by this report. Management is responsible for the Company's compliance with those servicing criteria. Our responsibility is to express an opinion on management's assertion about the Company's compliance with the servicing criteria based on our examination.
Our examination was conducted in accordance with
attestation standards established by the American Institute of Certified Public Accountants, as adopted by the Public Company Accounting
Oversight Board (United States) and, accordingly, included examining, on a test basis, evidence about the Company's compliance with the
applicable servicing criteria and performing such other procedures as we considered necessary in the circumstances. Our examination
included testing of less than all of the individual asset-backed transactions and securities that comprise the Platform, testing of less
than all of the servicing activities related to the Platform, and determining whether the Company processed those selected transactions
and performed those selected activities in compliance with the servicing criteria. Furthermore, our procedures were limited to the selected
transactions and servicing activities performed by the Company during the period covered by this report. Our procedures were not designed
to determine whether errors may have occurred either prior to or subsequent to our tests that may have affected the balances or amounts
calculated or reported by the Company during the period covered by this report for the selected transactions or any other transactions.
Although the Company is responsible for assessing compliance with Items 1122 (d)(1)(ii), 1122 (d)(4)(iii), 1122 (d)(4)(vii) and 1122
(d)(4)(viii) of Regulation AB, there were no servicing activities performed by the Company as of and for the year ended December 31,
2017, that required these servicing criteria to be complied with. We believe that our examination provides a reasonable basis for our
opinion.
Our examination does not provide a legal determination on the Company's compliance with the servicing criteria.
In
our opinion, management’s assertion that the Company complied with the aforementioned servicing criteria as of and for the
year ended December 31, 2017, for the U.S. Bank
Corporate Trust Asset-Backed Securities Platform is fairly stated, in all material respects.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
February 28, 2018