Fitch Affirms CSMC 2006-C4

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed 20 classes of Credit Suisse Commercial Mortgage Trust (CSMC) commercial mortgage pass-through certificates series 2006-C4. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The affirmations reflect expected continued paydown of the senior classes due to scheduled amortization and the pool's upcoming 2016 maturity schedule (24.1% matures through June and 69.6% matures by October). Fitch modeled losses of 7.1% of the remaining pool; expected losses on the original pool balance total 12.9%, including $342.4 million (4.9% of the original pool balance) in realized losses to date. Fitch has designated 66 loans (16.1%) as Fitch Loans of Concern, which includes 15 specially serviced assets (6.9%).

As of the November 2015 distribution date, the pool's aggregate principal balance has been reduced by 31.1% to $2.9 billion from $4.3 billion at issuance. Per the servicer reporting, 26 loans (38.3% of the pool) are defeased. Interest shortfalls are currently affecting classes A-J through S.

The largest contributor to expected losses is a specially serviced loan (1.5% of the pool) secured by a 450,090-sf office complex located in Longmont, CO. The loan transferred to special servicing in September 2015 due to imminent payment default. The property is 100% leased to Seagate Technology, which has continued to pay rent despite not occupying the space since 2007. The lease expires March 31, 2016. Per the special servicer, in the event an acceptable alternative resolution proposal is not provided by the Borrower shortly, foreclosure proceedings will be filed.

The second largest contributor to expected losses is a loan (1.8% of the pool) secured by a 799-unit (1,207-bed) student housing complex located in Philadelphia, PA. Revenue has been negatively impacted by increased competition from newer housing developments over the past two years. The servicer-reported occupancy and debt service coverage ratio (DSCR) were 70.1% and 0.65x, respectively at year-end (YE) June 2015 compared to 66.0% and 1.61x at YE June 2013.

The third largest contributor to expected losses is a specially serviced asset (0.8% of the pool) secured by an interest in seven office buildings (204,961-sf) located in Beavercreek, Ohio. The loan transferred to special servicing in May 2013 due to imminent default and became real estate owned (REO) in October 2015. The portfolio was 82.9% occupied as of the August 2015 rent roll. Per the servicer, the sales strategy is still being determined

RATING SENSITIVITIES

The Stable Rating Outlook on classes A-3 through A-M reflect increasing credit enhancement as a result of continued paydown and defeased collateral. Downgrades to the distressed classes could occur if losses are greater than expected from the specially serviced loans, pool performance deteriorates, or loans default at maturity. Fitch will continue to monitor the changing collateral given the large percentage of the pool maturing in the near future.

DUE DILIGENCE USAGE

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

Fitch has affirmed the following ratings:

--$1.4 billion class A-3 at 'AAAsf'; Outlook Stable;

--$150 million class A-4FL at 'AAAsf'; Outlook Stable;

--$423.0 million class A-1A at 'AAAsf'; Outlook Stable;

--$427.3 million class A-M at 'Asf'; Outlook Positive from Stable;

--$341.8 million class A-J at 'CCCsf'; RE 80%;

--$26.7 million class B at 'CCsf'; RE 0%;

--$64.1 million class C at 'CCsf'; RE 0%;

--$37.4 million class D at 'Csf'; RE 0%;

--$21.4 million class E at 'Csf'; RE 0%;

--$20.8 million class F at 'Dsf'; RE 0%;

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

--$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 O at 'Dsf'; RE 0%;

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

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

Fitch does not rate the class S certificates

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=996878

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=996878

Endorsement Policy

https://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/20151216006351/en/

Fitch Ratings
Primary Analyst
Tiffany Pierce, +1-212-908-9107
Associate Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Karen Trebach, +1-212-908-0215
Senior Director
or
Media Relations
Sandro Scenga, New York, +1-212-908-0278
[email protected]

Source: Fitch Ratings

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