Fitch Upgrades Two Classes of CSFB 2003-C3
Fitch Ratings has upgraded two classes and affirmed five classes of Credit Suisse First Boston Mortgage Securities Corp., series 2003-C3 (CSFB 2003-C3) commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The upgrades reflect increased credit enhancement and expected continued paydown. The ratings also reflect the pool's high concentration with 11 loans remaining, of which three are specially serviced assets (63.9% of the pool).
As of the September 2015 distribution date, the pool's aggregate principal balance has been reduced by 98.5% to $26.2 million from $1.76 billion at issuance. Per the servicer reporting, one loan (0.6% of the pool) is defeased and is scheduled to mature in 2018. Interest shortfalls are currently affecting classes K through P.
The largest specially serviced asset (30.1% of the pool) is a 163,393 square foot (sf) suburban office building located in Colorado Springs, CO. The single tenant property is occupied by Honeywell International (rated 'A', Outlook Stable by Fitch as of April 23, 2015). The loan transferred to special servicing in February 2013 due to maturity default and became Real Estate Owned (REO) in May 2014. Honeywell extended their lease in 2013 to November 2016. According to the special servicer, Honeywell has not yet indicated if it will renew its lease.
The largest contributor to expected losses (17% of the pool) is a specially serviced loan secured by a 176,508 sf retail center located in Las Vegas, NV. The loan was transferred to the special servicer due to default in July 2014, and a receiver was appointed in September 2014. Full year 2014 financials were unavailable, however an Asset Management Report provided by the special servicer exhibited stable performance at the property for the month of May 2015, but also noted a major deferred maintenance item. Occupancy at the property remained relatively stable at 97.2% as of year-end (YE) 2014 compared to YE 2013.
The upgrades of class H and class J are due to increased credit enhancement and continued paydown. Further upgrades were limited due to the pool's increasing concentration and continued risk of adverse selection. The remaining classes have all experienced principal losses and are rated 'Dsf'.
DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action.
Fitch has upgraded the following ratings:
--$532,572 class H notes to 'Asf' from 'B'; Outlook Stable;
--S19.4 million class J notes to 'CCCsf' from 'CCsf'; RE 100%.
Fitch has affirmed the following ratings:
--$6.2 million class K notes at 'Dsf'; RE 20%;
--$0 class L notes at 'Dsf'; RE 0%;
--$0 class M notes at 'Dsf'; RE 0%;
--$0 class N notes at 'Dsf'; RE 0%;
--$0 class O notes at 'Dsf'; RE 0%.
The class A-1, A-2, A-3, A-4, A-5, B, C, D, E, F, G, ASP, 622A, 622B, 622C, 622D, 622E, and 622F certificates have paid in full. Fitch does not rate the class P certificates. Fitch previously withdrew the ratings on the interest-only class A-X and A-Y certificates.
Additional information is available at www.fitchratings.com.
Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria (pub. 10 Dec 2014)
Dodd-Frank Rating Information Disclosure Form
Fitch Ratings, Inc.
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