Fitch Downgrades Two Distressed Classes of CSMC 2007-C1

CHICAGO--()--Fitch Ratings has downgraded two classes Credit Suisse Commercial Mortgage Trust (CSMC) series 2007-C1 commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The downgrades are based on a greater certainty of losses since Fitch's last rating action. The pool's aggregate principal balance has been reduced by 33.7% to $2.235 billion from $3.371 billion at issuance. Fitch modeled losses of 15.92% of the remaining pool; expected losses on the original pool are 20.1%, which includes 9.58% in realized losses to date. Fitch designated 60 loans (29.5%) as Fitch Loans of Concern, which include 12 specially serviced loans (5.4%).

The largest contributor to Fitch's modeled losses is the City Place (5.12% of the pool) loan. The loan is collateralized by a 731,886 square foot (sf) mixed use center located in West Palm Beach, FL. The loan was transferred to the special servicer in April 2010 and a modification consisting of an A/B note structure was completed in January of 2012. The loan was returned to the master servicer in August 2012. Occupancy has declined to 89% from 95% at issuance; however, improved from 85% in 2007. Several major retail tenants have renewed leases over the past 12 months and the sponsor is upgrading the mixed-use development through capital improvements. The asset has exhibited the strongest performance since the modification with the third quarter 2014 debt service coverage ratio listed at 2.17x based on the A note balance. Fitch losses are based on current cashflow with an upward adjustment of the cap rate due to market location which results in an expected loss of the entire B Note and a small percentage of the A Note. The loan is scheduled to mature in December 2018.

The second largest contributor to modeled losses is Savoy Park (7.2%). The loan is secured by a multifamily complex consisting of 1,802 units, located in the Harlem neighborhood of New York, NY. The loan was previously in special servicing beginning in July 2010 due to imminent default. The loan was assumed by the mezzanine lender and a loan modification was completed in 2012. The modification includes an A/B Note split of $160 million A Note and $50 million B Note, and extension to December 11, 2017. Per the master servicer, the complex's occupancy rate is 95%. The loan has returned to the master servicer in March 2013 and remains current. Performance has steadily improved since the modification with the debt service coverage ratio over 1.0x since year-end 2012.

The third largest contributor to Fitch's model losses is the 1025 Old Country Road (1.21%), a 206,482 sf suburban office building located in Westbury, NY. The loan was transferred to the special servicer in May 2009 for imminent payment default. Property performance has steadily deteriorated since 2009 as occupancy decreased from 80% to 17% as of year-end 2013. The special servicer initiated foreclosure proceedings in 2011.

RATINGS SENSITIVITIES

The Rating Outlook remains Negative for the A-M, A-MFL, and A-MFX classes. These classes may be downgraded if the transaction experiences an increase in the number of specially serviced loans, or expected losses on the existing specially serviced loans or performing loans increase.

Fitch downgrades the following classes as indicated:

--$286.6 million class A-J to 'CCsf' from 'CCCsf'; RE0%;

--$25.3 million class B to 'Csf' from 'CCsf'; RE 0%.

Fitch affirms the following classes as indicated:

--$24.1 million class A-AB at 'AAAsf'; Outlook Stable;

--$616.4 million class A-3 at 'AAAsf'; Outlook Stable;

--$906.2 million class A-1A at 'AAAsf'; Outlook Stable;

--$212.1 million class A-M at 'Bsf'; Outlook Negative;

--$100.0 million class A-MFL at 'Bsf'; Outlook Negative;

--$25.0 million class A-MFX at 'Bsf'; Outlook Negative.

--$37.9 million class C at 'Csf'; RE 0%;

--$1.7 million class D at 'Dsf'; RE 0%;

Classes E, F, G, H, J, K, L, M, N, O, P, Q, and S are affirmed at 'Dsf'/RE 0%. Classes A-1 and A-2 have paid in full. Class T is not rated. Fitch has previously withdrawn the ratings in the interest-only classes A-SP and A-X.

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

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 20, 2014);

--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 10, 2014).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria - Effective from 20 May 2014 to 4 August 2014

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748821

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

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=972016

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Contacts

Fitch Ratings
Primary Analyst
Jay Bullie
Associate Director
+1-312-368-2079
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Committee Chairperson
Mary MacNeill
Managing Director
+1-212-908-0785
or
Media Relations
Sandro Scenga, +1 212-908-0278
New York
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Jay Bullie
Associate Director
+1-312-368-2079
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Committee Chairperson
Mary MacNeill
Managing Director
+1-212-908-0785
or
Media Relations
Sandro Scenga, +1 212-908-0278
New York
sandro.scenga@fitchratings.com