Fitch Affirms COMM 2004-RS1 Ltd./Corp.

NEW YORK--()--Fitch Ratings has affirmed 12 classes issued by COMM 2004-RS1 Ltd./Corp. (COMM 2004-RS1). The affirmations are a result of sufficient credit enhancement from deleveraging of the capital structure to support the relative ratings. A complete list of rating actions follows at the end of this release.

KEY RATING DRIVERS

Since the last rating action in May 2013, approximately 8.72% of the collateral has been upgraded. Currently, 74.4% of the portfolio has a Fitch derived rating below investment grade with 63.1% having a rating in the 'CCC+' category and below, compared to 34.9% and 27.9%, respectively, at the last rating action. Over this period, the class A, B-1 (paid in full) and B-2 notes have received $72.4 million in pay downs for a total of $276 million since issuance.

One obligor, Marquee 2004-1, comprised of 50% of the portfolio paid off in full with no losses since last rating action.

This transaction was analyzed under the framework described in the report 'Global Rating Criteria for Structured Finance CDOs' using the Portfolio Credit Model (PCM) for projecting future default levels for the underlying portfolio. The Rating Loss Rates (RLR) were then compared to the credit enhancement of the classes. Fitch also analyzed the structure's sensitivity to the assets that are distressed, experiencing interest shortfalls, and those with near-term maturities.

For the class C through N notes, Fitch analyzed the class' sensitivity to the default of the distressed assets ('CCC' and below). Given the high probability of default of the underlying assets and the expected limited recovery prospects upon default, the class C notes have been affirmed at 'CCsf', indicating that default is probable. Similarly, the class D through N notes have been affirmed at 'Csf', indicating that default is inevitable.

The Negative Outlook on the class B notes reflects the risk of adverse selection as the portfolio continues to delever.

RATING SENSITIVITIES

In addition to those sensitivities discussed above, further negative migration and defaults beyond those projected by SF PCM as well as increasing concentration in assets of a weaker credit quality could lead to downgrades.

COMM 2004-RS1 is a CMBS mezzanine resecuritization that closed in November 2004. Currently, 100% of the portfolio is composed of 11 classes of CMBS collateral from the 2001 and 2004 vintages.

Fitch has affirmed the following classes:

--$25,027,194 class B-2 at 'Bsf'; Outlook Negative;

--$13,386,000 class C at 'CCsf';

--$12,955,000 class D at 'Csf';

--$4,318,000 class E at 'Csf';

--$3,023,000 class F at 'Csf';

--$2,056,000 class G at 'Csf';

--$2,176,000 class H at 'Csf';

--$725,000 class J at 'Csf';

--$1,313,000 class K at 'Csf';

--$1,520,000 class L at 'Csf';

--$622,000 class M at 'Csf';

--$2,384,528 class N at 'Csf'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 24, 2013);

--'Global Rating Criteria for Structured Finance CDOs' (Sept. 12, 2013).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

Global Rating Criteria for Structured Finance CDOs

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=718027

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=830335

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Contacts

Fitch Ratings
Primary Surveillance Analyst
Sean Gibbs
Associate Director
+1-212-908-0311
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
sandro.scenga@fitchratings.com

Sharing

Contacts

Fitch Ratings
Primary Surveillance Analyst
Sean Gibbs
Associate Director
+1-212-908-0311
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
sandro.scenga@fitchratings.com