NEW YORK--()--Fitch Ratings has downgraded 10 classes and affirmed 16 classes of Citigroup Commercial Mortgage Trust's commercial mortgage pass-through certificates, series 2007-C6. A detailed list of rating actions follows at the end of this press release.
The downgrades reflect an increase in Fitch modeled losses across the pool. Fitch modeled losses of 14.3% of the original pool (including losses of 1.1% incurred to date), compared to 11% modeled at the previous rating action. The increase is predominantly due to declining pool performance and an increased volume of loans in special servicing. There are currently 45 specially serviced loans (14.5%) in the pool, compared to 24 loans (7.9%) at the previous rating action.
As of the November 2012 distribution date, the pool's aggregate principal balance was $4.4 billion, down from $4.8 billion at issuance. There is one defeased loan (0.03%). There are cumulative interest shortfalls in the amount of $21.4 million currently affecting classes H through S.
Fitch has identified 109 loans (26.5%) as Fitch Loans of Concern, which includes 45 specially serviced loans (14.5%). Thirteen loans within the top 15 have Fitch loan to values (LTVs) in excess of 90%, including two loans in special servicing, which can impact a loan's ability to refinance at maturity.
The largest contributor to losses was the Hyde Park Apartment Portfolio, representing 2.84% of the outstanding pool balance. The loan is secured by 43 properties, consisting of 951 units. The latest reported debt service coverage ratio (DSCR) was 0.71x, as of June 30, 2012, with occupancy of 82%. The borrower completed $26 million of renovations in 2011, updating kitchens, baths, walls, ceilings and floor coverings, as well as improving common areas.
The second largest contributor to losses was Moreno Valley Mall (1.92% of the pool). The collateral consists of 472,844 square feet (sf) of a 1.1 million sf regional mall in Moreno Valley, CA, just east of Riverside, CA. The mall is anchored by J.C. Penney, Macys, and Sears, and contains a 150,000 sf vacant anchor space, which are not part of the collateral. The property was originally transferred to special servicing as part of the GGP bankruptcy and was modified. The loan re-defaulted and became REO through a deed in lieu of foreclosure in February 2011. Recent leasing efforts have resulted in increased occupancy at the mall. According to a Sept. 30, 2012 rent roll, the property is approximately 82% occupied, whereas it was 53.8% occupied on Nov. 30, 2011.
The third largest contributor to losses was the Southeast Apartment Portfolio (0.85% of the pool). The loan is collateralized by seven multifamily properties located in South Carolina and Georgia. The portfolio, which is REO, had an average occupancy of 77.4%, as of Nov. 1, 2012.
Fitch downgrades the following classes, and revises Outlooks and Recovery Estimates (RE's) as indicated:
--$425.6 million class A-M to BBBsf from AAAsf; Outlook Stable;
--$50 million class A-MFL to BBBsf from AAAsf; Outlook Stable;
--$248.3 million class A-J to CCCsf from BBsf; RE 80%;
--$150 million class A-JFL to CCCsf from BBsf; RE 80%;
--$23.8 million class B to CCsf from Bsf; RE 0%;
--$71.3 million class C to CCsf from CCCsf; RE 0%;
--$35.7 million class D to CCsf from CCCsf; RE 0%;
--$29.7 million class E to Csf from CCsf; RE 0%;
--$35.7 million class F to Csf from CCsf; RE 0%;
--$47.6 million class G to Csf from CCsf; RE 0%.
In addition, Fitch affirms the following classes, maintains Outlooks and revises REs as follows:
--$71.5 million class A-2 at AAAsf; Outlook Stable;
--$387 million class A-3 at AAAsf; Outlook Stable;
--$126.3 million class A-3B at AAAsf; Outlook Stable;
--$125.4 million class A-SB at AAAsf; Outlook Stable;
--$1,573 million class A-4 at AAAsf; Outlook Stable;
--$200 million class A-4FL at AAAsf; Outlook Stable;
--$477.4 million class A-1A at AAAsf; Outlook Stable;
--$53.5 million class H at Csf; RE 0%;
--$65.4 million class J at Csf; RE 0%;
--$53.5 million class K at Csf; RE 0%;
--$11.9 million class L at Csf; RE 0%;
--$11.9 million class M at Csf; RE 0%;
--$17.8 million class N at Csf; RE 0%;
--$11.9 million class O at Csf; RE 0%;
--$5.9 million class P at Csf; RE 0%;
--$5.9 million class Q at Csf; RE 0%.
Fitch does not rate class S. Class A-1 is paid in full. The rating on class X was previously withdrawn.
Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 21, 2011 report, 'Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions', which is available at 'www.fitchratings.com' under the following headers:
Structured Finance >> CMBS >> Criteria Reports
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:
Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions
Global Structured Finance Rating Criteria