Fitch Affirms CSFB 1998-C2

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed three classes of Credit Suisse First Boston Mortgage Securities Corp. (CSFB) commercial mortgage pass-through certificates, series 1998-C2. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERSThe affirmations to classes F and G reflect the high credit enhancement (CE) as a result of continued paydown, including defeasance sufficient to pay down both classes. CE has improved since Fitch's last rating action due to $27 million in principal paydown, including $15 million from scheduled amortization payments and $12 million received from the disposition of specially serviced assets. Class I was affirmed at 'Dsf' due to losses already incurred.

Fitch modeled losses of 7.6% of the remaining pool; expected losses on the original pool balance total 3.4%, including $56.4 million (2.9% of the original pool balance) in realized losses to date. Fitch has designated eight loans (23.2%) as Fitch Loans of Concern, which includes one specially serviced asset (17.4%).

As of the February 2016 distribution date, the pool's aggregate principal balance has been reduced by 95% to $104.4 million from $1.92 billion at issuance. There are 48 of the original 227 loans remaining in the transaction. Per the servicer reporting, 19 loans (63.8% of the pool) are fully defeased. Of the non-defeased loans 27 are fully amortizing (6.1%), all of which are secured by credit tenant leases. Interest shortfalls are currently affecting classes H through J.

The specially serviced loan, which is the largest loan in the pool (17.4%), was originally secured by three properties (two retail and one industrial) located in Irving and North Richland, TX. After initially transferring to special servicing in December 2009, the loan was modified with a reduced interest rate and its maturity extended twice to April 2013 and finally May 2014. The borrower was unable to repay the loan at the extended maturity date and the asset became real estate owned (REO) in July 2014. The industrial property and one of the retail properties were sold in an April 2015 auction. The remaining asset is a 242,000 square foot retail property located in Irving, TX anchored by Best Buy (18% of the net rentable area [NRA]) and Ross Dress for Less (12.4%). The property is not listed for sale, and the servicer is currently focused on renewing existing leases at the property.

RATING SENSITIVITIESThe Rating Outlooks of the investment-grade classes remain Stable with future affirmations expected, as both classes are fully covered by defeasance. The rating for class I will remain at 'Dsf' due to incurred losses.

DUE DILIGENCE USAGENo third-party due diligence was provided or reviewed in relation to this rating action.

Fitch affirms the following classes:

--$36 million class F at 'AAAsf'; Outlook Stable;--$19.2 million class G at 'AAAsf'; Outlook Stable;--$1.3 million class I at 'Dsf'; RE 0%.

The class A1, A2, B, C, D and E certificates have paid in full. Fitch does not rate the class H or J certificates. Fitch previously withdrew the rating on the interest-only class AX certificates.

Additional information is available at www.fitchratings.com.

Applicable CriteriaGlobal Structured Finance Rating Criteria (pub. 06 Jul 2015)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952U.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 DisclosuresDodd-Frank Rating Information Disclosure Formhttps://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1000755Solicitation Statushttps://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1000755Endorsement Policyhttps://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160310006463/en/

Fitch Ratings
Benson Thomas
Director
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Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Mary MacNeill
Managing Director
+1-212-908-0785
or
Media Relations
Sandro Scenga, New York, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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