Fitch Takes Various Actions on CSMC 2007-C5; Places Two Classes on Rating Watch Negative

NEW YORK--()--Fitch Ratings has placed two classes on Rating Watch Negative, downgraded four classes and affirmed 12 classes of Credit Suisse Commercial Mortgage Trust, series 2007-C5 commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The Rating Watch placement of classes A-3 and A-1-A is due to increased loss expectations since Fitch's last rating action and the pending updated valuations on several specially serviced loans. Fitch modeled losses of 19% of the remaining pool; expected losses on the original pool balance total 22.7%, including $271 million (10% of the original pool balance) in realized losses to date. Fitch has designated 51 (57.5%) Fitch Loans of Concern, of which 17 (33.8%) are in special servicing.

As of the November 2014 distribution date, the pool's aggregate principal balance has been reduced by 33% to $1.82 billion from $2.72 billion at issuance. Per the servicer reporting, three loans (1.5% of the pool) are defeased. Interest shortfalls are currently affecting classes A-J through S.

The largest contributor to expected losses remains the specially-serviced Gulf Coast Town Center Phases I & II loan (10.5% of the pool), an open-air anchored retail center in Fort Myers, FL. The property is anchored by Bass Pro Shop, JC Penney, Belk Stores and Regal Cinema, all on long term leases. The most recently reported DSCR was 0.94x as of year-end 2013.

The largest driver to increased expected losses since Fitch's last rating action is the recently transferred specially-serviced Jericho Plaza (I & II) loan (9%). The interest-only loan is secured by two class A office buildings, with 638,216 square foot of space, located in Jericho, NY. The property has been suffering from poor performance over the last two years primarily due to lease rollover. In addition, the largest tenant, NY Community Bank (10.6% of NRA), will be vacating at its lease expiration in Dec. 2014.

The next largest driver to increased expected losses is the specially-serviced Fairfield Inn by Marriott Hotel Portfolio (3.5%). The portfolio is secured by 9 limited-service hotels with 728 rooms; all under the Fairfield Marriott flag. The properties are located in secondary and tertiary markets in five states; MA (Amesbury, Tewksbury and Woburn), NH (Portsmouth and Manchester), NY (East Greenbush), CT (Milford and Wallingford) and VT (Williston). The portfolio was previously with the special servicer in November 2010 and then returned in November 2013 due to imminent default. The portfolio became REO on Sept. 30, 2014 via a deed-in-lieu.

RATING SENSITIVITIES

Fitch expects to resolve the Rating Watch Negative status as more information becomes available on updated valuations and workout strategies of specially serviced loans including potential payoffs. Classes A-4 and A-1-A may be downgraded a full category or more. The Outlook Negative on classes A-3 and A-AB are the result of the remaining concentration risk of interest-only loans (49%) in the pool with minimal scheduled paydowns prior to 2017 and increasing loss expectations.

Fitch downgrades the following classes and assigns REs as indicated:

--$198 million class A-M to 'CCCsf' from 'B-sf'; RE 70%;

--$74.1 million class A-1-AM to 'CCCsf' from 'B-sf'; RE 70%;

--$153.5 million class A-J to 'Csf' from 'CCsf'; RE 0%;

--$57.4 million class A-1-AJ to 'Csf' from 'CCsf'; RE 0%.

Fitch affirms the following classes and revises Rating Outlooks as indicated:

--$118.8 million class A-3 at 'AAAsf'; Outlook to Negative from Stable;

--$32.6 million class A-AB at 'AAAsf'; Outlook to Negative from Stable.

Fitch places on Rating Watch Negative:

--$982.5 million class A-4 'AAAsf';

--$143.5 million class A-1-A 'AAAsf'.

Fitch affirms the following classes:

--$23.8 million class B at 'Csf'; RE 0%;

--$20.4 million class C at 'Csf'; RE 0%;

--$18.2 million class D at 'Dsf'; RE 0%;

--$0 class E at 'Dsf'; RE 0%;

--$0 class F at 'Dsf'; RE 0%;

--$0 class G at 'Dsf'; RE 0%;

--$0 class H at 'Dsf'; RE 0%;

--$0 class J at 'Dsf'; RE 0%;

--$0 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%.

The class A-1 and A-2 certificates have paid in full. Fitch does not rate the class O, P, Q and S certificates. Fitch previously withdrew the ratings on the interest-only class A-SP and A-X certificates.

Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 11, 2013 report, 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is available at 'www.fitchratings.com' under the following headers:

Structured Finance >> CMBS >> Criteria Reports

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

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (Aug. 4, 2014);

--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 11, 2013).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

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

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724961

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=934155

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings
Primary 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, New York
Sandro Scenga
+1 212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary 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, New York
Sandro Scenga
+1 212-908-0278
sandro.scenga@fitchratings.com