Fitch Upgrades CSFB 2006-TFL2

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has upgraded two and affirmed three classes of Credit Suisse First Boston Mortgage Securities Corp., series 2006-TFL2. Since issuance, the transaction has been reduced by nearly 98% from paydown and dispositions. Only one loan, the JW Marriott Starr Pass, remains. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrades are due to greater confidence in the recovery prospects of the JW Marriott Starr Pass loan. Since Fitch's last rating action, the special servicer has made progress with open legal cases, settling a key case surrounding land access and usage. While this resolution is a positive development, open litigation on other matters remains. The outstanding judgements need to be settled before the servicer can move forward with the foreclosure process.

The JW Marriott Starr Pass consists of a 575-room full service hotel and a 27-hole Arnold Palmer-designed championship golf course, located in Tucson, AZ. The hotel, which offers

88,000 square foot (sf) of meeting space, including a 20,000 sf ballroom, was opened in 2005 and maintains high curb appeal with well-kept landscaping and an attractive design.

In April 2010, the loan transferred to special servicing for imminent default. Performance did not meet expectations from issuance, and the recession hit the Southwest, specifically the Tucson market, particularity hard. Resort performance improved as the U.S. lodging market rebounded from recessionary lows, but workout momentum has not been successfully maintained due to the open legal disputes that have carried on for years. The resort remains well kept however and maintains high curb appeal.

RATING SENSITIVITIES

The ratings are expected to remain stable in the near term. Future upgrades are unlikely given the loan's defaulted status as well as limited financial information available at the time of the review. While recovery prospects have improved, further downgrades to the already distressed classes are possible if workout negotiations continue to stall.

DUE DILIGENCE USAGE

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

Fitch has upgraded the following classes:

--$949,356 class G to 'Asf' from 'BBBsf'; Outlook Stable;

--$20 million class H to 'BBBsf' from 'BBsf'; Outlook Stable.

Fitch affirms the following classes:

--$19 million class J at 'Bsf'; Outlook Stable;

--$22 million class K at 'CCCsf'; RE 60%;

--$16.1 million class L at 'Dsf'; RE 0%.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions (pub. 27 Aug 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=870009

Criteria for Rating Caps and Limitations in Global Structured Finance Transactions (pub. 28 May 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748781

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1005836

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1005836

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/20160609006262/en/

Fitch Ratings
Primary Analyst
Chris Bushart
Senior Director
+1-212-908-0606
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, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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