Fitch Upgrades Two Classes of CSFB 2005-C5

NEW YORK--()--Fitch Ratings has upgraded two and affirmed 12 classes of Credit Suisse First Boston Mortgage Securities Corp. series 2005-C5, commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrades are due to recent pay downs primarily from loan pay-offs at maturity. Fitch modeled losses of 46.7% of the remaining pool; expected losses on the original pool balance total 6.6%, including $101.9 million (3.5% of the original pool balance) in realized losses to date. As a result of the pay downs, the pool is concentrated with 21 loans remaining, including one defeased loan (0.6% of the pool) and 13 specially serviced loans (83.1% of the pool).

As of the November 2015 distribution date, the pool's aggregate principal balance has been reduced by 93.5% to $188.9 million from $2.94 billion at issuance. Interest shortfalls are currently affecting classes G through S.

The largest contributor to expected losses is a specially serviced loan (14.3% of the pool) secured by a 1,747,418 square foot (sf) regional mall (537,716 sf collateral) originally built in 1954 and located in Southfield, MI (Detroit MSA). The loan transferred to special servicing in May 2014 due to imminent default. JC Penney (283,534 sf) and National Wholesale Liquidators (117,750 sf) both vacated several years ago and the borrower had had difficulty re-leasing the spaces. Subsequently, shadow anchors Macy's and Target announced store closures and the special servicer determined that lease-up of the mall was unlikely. Ultimately the mall closed in February 2015. A sales contract is currently in place, but Fitch expects little to no recoveries upon disposition of the asset.

The second largest contributor to expected losses is a specially serviced loan (23.5% of the pool) secured by a 720,558 sf (527,668 sf of collateral) regional mall located in Decatur, GA, approximately seven miles southeast of Atlanta. The mall is shadow anchored by a 198,000 sf Macy's. The loan transferred to special servicing in April 2015 due to imminent maturity default; however, the closing of a potential loan modification is pending. Performance has steadily declined in recent years with occupancy at 68% and debt service coverage ratio (DSCR) at 1.24x as of year-end (YE) 2014. Occupancy has declined further to roughly 63% as of the September 2015 rent roll.

The third largest contributor to expected losses is a specially serviced loan (14.8% of the pool) originally secured by two office properties totalling 313,847 sf located in Phoenix, AZ. The loan transferred to special servicing effective March 2013 due to monetary default and foreclosure took place in September 2013. The larger of the two buildings was sold in September 2014. Occupancy at the remaining property declined from 83.1% as of May 2014 to 41.9% as of June 2015 after a large tenant reduced their space. However, a new tenant has recently moved in, increasing occupancy to 61.7% per the September 2015 rent roll. The special servicer projects a disposition to occur in the near term, but a sales contract has not been executed.

RATING SENSITIVITIES

The ratings for classes C through F are expected to remain stable. Upgrades to these classes above the recommended ratings are not warranted at this time due to pool concentration and exposure from the specially serviced loans (83.1% of pool). In addition, due to the large percentage of specially serviced loans in the pool, potential clawback of special servicer principal and interest advances and fees upon disposition or non-recoverability determinations of the distressed assets are a concern. Should loss expectations increase on the specially serviced loans, including two distressed regional malls, classes E and F may be subject to downgrades. The distressed classes (those rated below 'B') may be subject to further downgrades as losses are realized.

DUE DILIGENCE USAGE

No third party due diligence was provided or reviewed in relation to this rating action.

Fitch has upgraded the following rating as indicated:

--$8 million class C to 'Asf' from 'BBBsf', Outlook Stable;

--$21.8 million class D to 'Asf' from 'BBB-sf', Outlook Stable.

Fitch has affirmed the following ratings as indicated:

--$18.1 million class E at 'BBsf', Outlook to Stable from Negative;

--$29 million class F at 'Bsf', Outlook to Stable from Negative;

--$36.3 million class G at 'CCCsf', RE 70%;

--$21.8 million class H at 'CCsf', RE 0%;

--$32.6 million class J at 'Csf', RE 0%

--$21.4 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%;

--$0 class P at 'Dsf', RE 0%;

--$0 class Q at 'Dsf', RE 0%.

The class A-1, A-2, A-3, A-AB, A-4, A-1A, A-M, A-J, B, 375-A, 375-B, and 375-C certificates have paid in full. Fitch does not rate the class S certificates. Fitch previously withdrew the ratings on the interest-only class A-X, A-SP and A-Y certificates.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

U.S. and Canadian Fixed-Rate Multiborrower CMBS Surveillance and U.S. Re-REMIC Criteria (pub. 13 Nov 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=873395

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=995940

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=995940

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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Contacts

Fitch Ratings
Primary Analyst
Martin Nunnally
Associate Director
+1-212-908-0871
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Mary MacNeill
Managing Director
+1-212-908-0785
or
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Martin Nunnally
Associate Director
+1-212-908-0871
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Mary MacNeill
Managing Director
+1-212-908-0785
or
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com