Fitch Downgrades 8 Classes of GCCFC 2007-GG9

NEW YORK--()--Fitch Ratings downgrades eight classes of Greenwich Capital Commercial Funding Corp. (GCCFC), series 2007-GG9, commercial mortgage pass-through certificates, due to increased loss expectations on the specially serviced loans, higher than expected realized losses from dispositions and further deterioration of collateral performance. A detailed list of rating actions follows at the end of this release.

The downgrades reflect an increase in Fitch modeled losses across the pool, which includes modeled losses on loans in special servicing, and on performing loans with declines in performance indicative of a higher probability of default. Fitch modeled losses of 14.9% (15.1% cumulative transaction losses, which includes losses realized to date) based on modeled losses on the specially serviced loans and loans assumed to default during the term or not refinance at maturity.

The Outlook for classes A-M and A-MFX remains Negative, as further collateral underperformance may lead to a downgrade. Should cash flows deteriorate further on the performing loans, or if realized losses exceed current expectations on the specially serviced loans, downgrades of these classes are possible. In addition, interest shortfalls have increased significantly since Fitch's last rating action.

As of the October 2012 distribution date, the pool's aggregate principal balance has decreased 11.6% to $5.81 billion from $6.58 billion at issuance. As of October 2012, there are cumulative interest shortfalls in the amount of $36.5 million; currently affecting classes B through S. Fitch has designated 79 loans (46.8%) as Fitch Loans of Concern, which includes 32 specially serviced loans (25.4%).

The largest contributor to loss is the Schron Industrial Portfolio (5.2%) The loan is secured by a portfolio of 36 industrial properties located in Nassau and Suffolk Counties on Long Island, NY. The loan transferred to the special servicer in December 2010 for imminent default. The loan was modified in 2012 and remains specially serviced. The loan was split into an A/B structure, with an A-note balance of $220 million and a subordinate B-note balance of $85 million and a scheduled maturity date of December 2016.

The second largest contributor to loss is the specially serviced Peachtree Center (3.6%) in Atlanta, GA. The collateral consists of six office buildings totaling 2.4 million square feet (sf), three parking garages and a 134,024 sf retail center. The loan transferred to special servicing in February 2010 due to imminent default. A loan modification has closed with the loan split into a springing A/B structure consisting of a $140 million A-note and a $67.6 million B-note. The bi-furcated loan is scheduled to mature in June 2015.

The third largest contributor to loss (2.4%) is secured by the Hyatt Regency Bethesda. The collateral is a 390 room full-service hotel. The loan transferred to special servicing in December 2009 due to imminent default. The hotel was adversely affected by the economic downturn; however, trailing 12-month (TTM) occupancy has improved to 78.6% as of June 2012. The October 2012 remittance indicated the property is in foreclosure.

Fitch has downgraded and maintained Outlooks on the following classes as indicated:

--$557.6 million class A-M to 'BBBsf' from 'AAAsf'; Outlook Negative;

--$100 million class A-MFX to 'BBBsf' from 'AAAsf'; Outlook Negative.

In addition, Fitch has downgraded the following classes and assigned Recovery Estimates (RE) as follows:

--$575.4 million class A-J to 'CCCsf' from 'Bsf'; RE 60%;

--$32.9 million class B to 'CCsf' from 'CCCsf', RE 0%;

--$98.6 million class C to 'CCsf' from 'CCCsf', RE 0%;

--$41.1 million class D to 'CCsf' from 'CCCsf', RE 0%;

--$41.1 million class E to 'CCsf' from 'CCCsf', RE 0%;

--$82.2 million class H to 'Csf' from 'CCsf', RE 0%.

Fitch has affirmed the following classes as indicated:

--$811 million class A-2 at 'AAAsf'; Outlook Stable;

--$86 million class A-3 at 'AAAsf'; Outlook Stable;

--$84.5 million class A-AB at 'AAAsf'; Outlook Stable;

--$2.67 billion class A-4 at 'AAAsf'; Outlook Stable;

--$317.7 million class A-1A at 'AAAsf'; Outlook Stable;

--$57.5 million class F at 'CCsf', RE 0%;

--$57.5 million class G at 'CCsf', RE 0%;

--$65.8 million class J at 'Csf', RE 0%;

--$65.8 million class K at 'Csf', RE 0%;

--$32.9 million class L at 'Csf', RE 0%;

--$16.4 million class M at 'Csf', RE 0%.

--$17.5 million class N at 'Dsf', RE 0%.

Classes O, P and Q are fully depleted and remain at 'Dsf', RE 0%, due to realized losses.

Class A-1 has been paid in full. The non-rated class S is fully depleted. Fitch previously withdrew the ratings of class A-MFL and the interest-only class X.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (June 6, 2012);

--'Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions' (Dec. 21, 2011).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679923

Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=662869

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Contacts

Fitch Ratings
Primary Analyst
Jeffrey Diliberto, +1-212-908-9173
Director
Jeffrey.diliberto@fitchratings.com
Fitch, Inc.
One State Street Plaza
New York, NY 10004
or
Committee Chairperson
Mary MacNeill, +1-212-908-0785
Managing Director
Mary.macneill@fitchratings.com
or
Media Relations
Elizabeth Fogerty, New York, +1-212-908-0526
elizabeth.fogerty@fitchratings.com

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Contacts

Fitch Ratings
Primary Analyst
Jeffrey Diliberto, +1-212-908-9173
Director
Jeffrey.diliberto@fitchratings.com
Fitch, Inc.
One State Street Plaza
New York, NY 10004
or
Committee Chairperson
Mary MacNeill, +1-212-908-0785
Managing Director
Mary.macneill@fitchratings.com
or
Media Relations
Elizabeth Fogerty, New York, +1-212-908-0526
elizabeth.fogerty@fitchratings.com