Fitch Affirms CSFB 2005-C1

NEW YORK--()--Fitch Ratings has affirmed all classes of Credit Suisse First Boston Mortgage Securities Corp., series 2005-C1 (CSFB 2005-C1), commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The affirmations reflect stable performance and sufficient credit enhancement to offset Fitch modeled losses for the pool. Fitch modeled losses of 8.6% of the remaining pool; modeled losses of the original pool are 8.7%, including losses already incurred to date.

The Negative Rating Outlook on classes B, C, and D reflects significant upcoming loan maturities in the pool and the possibility for further underperformance on loans in the top 15 (27.7% of the remaining pool). Approximately 84% of the remaining pool has a maturity date within the next three years, with concentrations in 2014 (44.5% of pool) and 2015 (36.7%).

Fitch has designated 49 loans (47.5%) as Fitch Loans of Concern, which includes five specially serviced loans (6.2%). Eleven of the top 15 loans (36.5%) have Fitch stressed loan-to-values greater than 90%. These loans may experience difficulties refinancing at loan maturity. In addition, sponsor concentration exists for the multifamily collateral (8.7%) in the top 15; this sponsor has defaulted on prior securitized multifamily loans.

As of the February 2013 distribution date, the pool's aggregate principal balance has been reduced by 33.7% of the original pool balance to $1 billion from $1.51 billion at issuance. Approximately 30.7% was due to principal paydowns and 3% was due to realized losses. Fifteen loans (11.5%) have been fully defeased since issuance. Cumulative interest shortfalls totaling $4.8 million are currently affecting classes H through P.

The largest contributors to modeled losses are three (8.5%) of the top 15 loans; two (5%) of which are currently specially serviced.

The largest contributor to modeled losses is a loan (3.5%) secured by a 168,006 square foot (sf) retail and entertainment complex located in downtown Manhattan. As of September 2012, the servicer-reported occupancy was 63%, a slight improvement from the 58% at year-end (YE) 2011, but still a significant decline from the 79% and 98% reported at YE 2010 and at issuance, respectively.

Many of the property's original tenants have vacated. In the third quarter of 2010, the second and third largest tenants (18% and 10%, respectively, of NRA) both terminated their leases and vacated prior to lease expiration. However, multiple new leases, predominately restaurant tenants, have been signed throughout 2011 and 2012, which helped to boost occupancy. Further, the largest tenant renewed its lease until July 2016.

For the first nine months of 2012, the debt service coverage ratio (DSCR), on a net operating income (NOI) basis, was 0.47x, an improvement from a negative NOI DSCR of -0.04x at YE 2011, but still representing a significant decline from the 1.34x reported at issuance. The loan sponsor is covering debt service shortfalls out of pocket.

The second largest contributor to modeled losses is a specially serviced loan (3.3%) secured by a 305,887 sf anchored retail property located in Yuba City, CA. The loan was transferred to special servicing in March 2011 due to imminent default.

Two of the anchor tenants at the property have lease expirations in 2015. Another tenant announced it would close all stores nationally, which will result in a closure of the store at the property. Legal counsel has been engaged and the special servicer continues to gather information from the borrower and evaluate possible workout strategies. The lender is in discussions with the borrower on a potential A and B note loan modification.

The third largest contributor to modeled losses is a specially serviced loan (1.6%) on a 76,916 sf retail property located in Thousand Oaks, CA. The loan was transferred to special servicing in April 2009 due to imminent default. The asset became real-estate owned (REO) in January 2012.

The asset remains REO and unlisted. The special servicer is in the process of working through the remainder of the leases at the property as well as evictions of defaulted tenants. The former borrower was extremely uncooperative and did not turn over any leases, rent rolls, or operating statements. The special servicer indicated there are several restaurant tenants interested in the property. The best disposition strategy is still being determined at this time.

Fitch has affirmed the following classes as indicated:

--$15.9 million class A-AB at 'AAAsf'; Outlook Stable;

--$53.8 million class A-3 at 'AAAsf'; Outlook Stable;

--$674.3 million class A-4 at 'AAAsf'; Outlook Stable;

--$92.5 million class A-J at 'AAsf'; Outlook Stable;

--$43.4 million class B at 'BBB-sf'; Outlook Negative;

--$13.2 million class C at 'BBsf'; Outlook Negative;

--$24.5 million class D at 'Bsf'; Outlook Negative;

--$18.9 million class E at 'CCCsf'; RE 0%;

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

--$15.1 million class G at 'CCsf'; RE 0%;

--$18.9 million class H at 'CCsf'; RE 0%;

--$5.7 million class J at 'Csf'; RE 0%;

--$3.1 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%.

Classes A-1 and A-2 have paid in full. Fitch does not rate class P. Fitch had previously withdrawn the rating on the interest-only classes A-X and A-SP.

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);

--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 18, 2012).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

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

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=696969

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Contacts

Fitch Ratings
Primary Analyst
Melissa Che, +1-212-908-9107
Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Committee Chairperson
Christopher Bushart, +1-212-908-0606
Senior Director
or
Media Relations
Sandro Scenga, +1-212-908-0278 (New York)
sandro.scenga@fitchratings.com

Sharing

Contacts

Fitch Ratings
Primary Analyst
Melissa Che, +1-212-908-9107
Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Committee Chairperson
Christopher Bushart, +1-212-908-0606
Senior Director
or
Media Relations
Sandro Scenga, +1-212-908-0278 (New York)
sandro.scenga@fitchratings.com