Fitch Upgrades 4 Classes of CSMC 2006-C1

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has upgraded four and affirmed 15 classes of Credit Suisse Commercial Mortgage Trust commercial mortgage pass-through certificates series 2006-C1 (CSMC 2006-C1). A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

Upgrades reflect the continued paydown of the transaction and significant percentage of defeased collateral (15.5% of the pool). As of the August 2015 distribution date, the pool's aggregate principal balance has been reduced by 46.1% to $1.62 billion from $3.01 billion at issuance.

Fitch modeled losses of 7% of the remaining pool; expected losses on the original pool balance total 6.8%, including $91.1 million (3% of the original pool balance) in realized losses to date. Fitch has designated 105 as Fitch Loans of Concern (35.4%), which includes 10 specially serviced assets (2.8%). Loan maturities are concentrated over the next year with approximately 40% maturing through year-end and 55% in 2016.

Per the servicer reporting, 25 loans are defeased, including four of the top-15 loans. Interest shortfalls are currently affecting classes J through S.

The largest contributor to expected losses is a specially-serviced loan (0.6% of the pool), which is secured by a single-tenant industrial property located in Butler, Indiana. The loan, which was originally secured by two properties, transferred to special servicing in 2010 after the shared single tenant rejected its leases and vacated the properties as part of a bankruptcy filing. The vacant Michigan property was sold out of receivership in June 2013 with net proceeds applied towards debt obligations. The remaining Indiana property was re-leased to a new single tenant this year. The special servicer is now reportedly pursuing foreclosure and a potential note sale.

The next largest specially serviced asset (0.5%) is secured by a 137,000 square foot office property located in Atlanta, Georgia. The loan transferred in February 2015 due to payment default. Year-end 2014 occupancy was reported at 73%; however, a major tenant (29% of net rentable area [NRA]) was expected to vacate the property at its lease expiration in June 2015. The special servicer is moving forward with foreclosure.

RATING SENSITIVITIES

The Stable Outlooks on classes A through F reflect the increasing credit enhancement and expected continued paydown of the classes. Upgrades were limited due to the significant percentage of Fitch Loans of Concern. Fitch will continue to monitor the changing collateral given the large percentage of the pool maturing in the near future. Ratings on the distressed classes may be subject to further downgrades as losses are realized.

DUE DILIGENCE USAGE

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

Fitch has upgraded the following classes and assigns or revises Rating Outlooks as indicated:

--$236.5 million class A-J to 'AAsf' from 'Asf'; Outlook to Stable from Positive;

--$18.8 million class B to 'AAsf' from 'Asf'; Outlook Stable;

--$37.5 million class C to 'Asf' from 'BBBsf'; Outlook Stable;

--$33.8 million class D to 'BBBsf' from 'BBB-sf'; Outlook to Stable from Negative.

Fitch has affirmed the following classes and assigns or revises Rating Outlooks and REs as indicated:

--$22.5 million class E at 'BBsf'; Outlook to Stable from Negative;

--$33.8 million class F at 'Bsf'; Outlook to Stable from Negative;

--$30 million class G at 'CCCsf'; RE 95%.

Fitch has affirmed the following classes as indicated:

--$538.3 million class A-4 at 'AAAsf'; Outlook Stable;

--$271.9 million class A-1-A at 'AAAsf'; Outlook Stable;

--$300.4 million class A-M at 'AAAsf'; Outlook Stable;

--$33.8 million class H at 'CCCsf'; RE 0%;

--$30 million class J at 'CCsf'; RE 0%;

--$32.9 million 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%.

Classes A-1 through A-AB were paid in full. Fitch does not rate the class S or CCA 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.

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. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria (pub. 10 Dec 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=990303

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=990303

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/20150902006388/en/

Fitch Ratings
Primary Analyst
Stacey McGovern
Director
+1-212-908-0722
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: [email protected]

Source: Fitch Ratings

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