Fitch Downgrades 15 Classes of CSMC 2006-C1; Affirms Super Seniors
Fitch Ratings has downgraded 15 classes and affirmed six classes of Credit Suisse Commercial Mortgage Trust commercial mortgage pass-through certificates series 2006-C1 (CSMC 2006-C1) due to an increase in Fitch expected losses across the pool, primarily due to increased losses on specially serviced loans. A detailed list of rating actions follows at the end of this press release.
Fitch modeled losses of 7.6% of the remaining pool; expected losses on the original pool balance total 7.3%, including losses already incurred. The pool has experienced $37.8 million (1.3% of the original pool balance) in realized losses to date. Fitch has designated 99 loans (32.3%) as Fitch Loans of Concern, which includes 22 specially serviced assets (8.6%).
As of the October 2012 distribution date, the pool's aggregate principal balance has been reduced by 21% to $2.38 billion from $3.0 billion at issuance. Per the servicer reporting, two loans (0.5% of the pool) have defeased since issuance. Interest shortfalls are currently affecting classes K through S.
The largest contributor to expected losses is the specially-serviced Lane Portfolio loan (1.7% of the pool), which is secured by a portfolio of three hotels (589 rooms) located in Annapolis, MD, Durham, NC, and Kentwood, MI. The loan transferred to special servicing in April 2010 due to insufficient cash flow. Potential resolution strategies are under discussion with the borrower.
The next largest contributor to expected losses is the 8201 Greensboro Drive loan (3.1%), which is secured by a 361,000-sf office building located in McLean, VA, approximately 13 miles west of Washington, D.C. As of August 2012, occupancy had increased to 91.5% from 80% at last review; however, 10% of the tenancy rolls over the next year. The property remains over-leveraged.
The third largest contributor to expected losses is an REO property, Village at Double Diamond (0.7%), a 58,000 sf retail property located in Reno, NV. Foreclosure was completed in August 2012. Occupancy was recently reported at 62%. New property management has been installed with the plan to stabilize the rent roll over the next two quarters with approximately 20% of the leases expiring by year end.
Fitch downgrades the following classes and assigns or revises Rating Outlooks and Recovery Estimates (REs) as indicated:
--$236.5 million class A-J to 'Asf' from 'AAsf', Outlook Stable;
--$18.8 million class B to 'Asf' from 'AAsf', Outlook to Negative from Stable;
--$37.5 million class C to 'BBBsf' from 'Asf', Outlook to Negative from Stable;
--$33.8 million class D to 'BBB-sf' from 'BBBsf', Outlook to Negative from Stable;
--$22.5 million class E to 'BBsf' from 'BBBsf', Outlook to Negative from Stable;
--$33.8 million class F to 'Bsf' from 'BBsf', Outlook to Negative from Stable;
--$30 million class G to 'CCCsf' from 'BBsf', RE 60%;
--$33.8 million class H to 'CCCsf' from 'Bsf', RE 0%;
--$30 million class J to 'CCsf' from 'B-sf', RE 0%;
--$37.5 million class K to 'Csf' from 'CCCsf', RE 0%;
--$15 million class L to 'Csf' from 'CCCsf', RE 0%;
--$11.3 million class M to 'Csf' from 'CCCsf', RE 0%;
--$11.3 million class N to 'Csf' from 'CCsf', RE 0%;
--$3.8 million class O to 'Csf' from 'CCsf', RE 0%;
--$3.5 million class Q to 'Dsf' from 'Csf', RE 0%.
Fitch affirms the following classes:
--$220.7 million class A-3 at 'AAAsf', Outlook Stable;
--$94.3 million class A-AB at 'AAAsf', Outlook Stable;
--$698 million class A-4 at 'AAAsf', Outlook Stable;
--$497.5 million class A-1-A at 'AAAsf', Outlook Stable;
--$300.4 million class A-M at 'AAAsf', Outlook Stable;
--$3.8 million class P at 'Csf', RE 0%.
Class A-2 is paid in full. Fitch does not rate the class S or class CCA certificates. Fitch previously withdrew the ratings on the interest-only class A-X and A-Y certificates.
Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 21, 2011 report, 'Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions', which is available at 'www.fitchratings.com' under the following headers:
Structured Finance >> CMBS >> Criteria Reports
Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (June 6, 2012);
--'Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions' (Dec. 21, 2011).
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions
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