Market Snapshot
  • U.S.
  • Europe
  • Asia
Ticker Volume Price Price Delta
DJIA 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 2.54 0.14%
NASDAQ 4,095.52 9.29 0.23%
Ticker Volume Price Price Delta
STOXX 50 3,155.81 16.55 0.53%
FTSE 100 6,625.25 41.08 0.62%
DAX 9,409.71 91.89 0.99%
Ticker Volume Price Price Delta
NIKKEI 14,516.27 98.74 0.68%
TOPIX 1,173.37 6.78 0.58%
HANG SENG 22,760.24 64.23 0.28%

Fitch Downgrades Four Classes of COMM 2006-C7



  Fitch Downgrades Four Classes of COMM 2006-C7

Business Wire

NEW YORK -- November 20, 2012

Fitch Ratings has affirmed the super senior classes of COMM 2006-C7,
commercial mortgage pass-through certificates at 'AAA' and downgraded four
classes. A detailed list of rating actions follows at the end of this press
release.

The downgrades reflect an increase in Fitch expected losses largely attributed
to increased loss expectations associated with the specially serviced assets,
particularly the Granite Run Mall. The asset is the fourth largest in the
pool; the most recent valuation is significantly lower than that at Fitch's
last rating action in February 2012. Fitch modeled losses of 15.0% of the
remaining pool; expected losses of the original pool including losses to date
are 14.3%.

Fitch designated 40 loans (35.3%) as Fitch Loans of Concern, which includes 16
specially serviced loans (18.8%). Additionally, four of the top 15 loans
(12.6%) are currently in special servicing, two of which (7.1%), are amongst
the top three largest contributors to Fitch modeled losses. Interest
shortfalls in the amount of $19 million are currently affecting classes A-J
thru P.

The largest contributor to Fitch expected losses is secured by The Granite Run
Mall, a 1,032,843 square foot (sf) super regional mall located in Media, PA,
approximately 12 miles from the central business district (CBD) of
Philadelphia. The mall is anchored by Sears, Boscov's, JC Penney, and Kohl's.
Sears and JC Penney own their stores but are subject to ground leases. The
loan transferred to special servicing in October 2010 due to imminent default
and is currently real estate owned (REO). The special servicer has installed
leasing and management teams and developed a capital plan and 2012 budget. As
of September 2012, the inline occupancy is 67% leased and 48% leased excluding
temporary. Leasing negotiations continue with several junior anchors. The life
safety issues and deferred maintenance issues at the property have all been
corrected.

The second largest contributor to loss is secured by an enclosed regional mall
consisting of 554,334 sf. The mall is anchored by Sears, JC Penney, and
Macy's, which is not part of the collateral. The collateral includes a 6,863
sf outparcel and 255,878 sf of inline space. The property is located in Battle
Creek, MI. The loan was transferred back to special servicing in August 2010
due to imminent default. General Growth Properties (GGP) and the special
servicer could not agree on terms for a modification. A deed in lieu of
foreclosure occurred in February 2011. The special servicer has engaged third
parties for management and leasing. As of September 2012, inline occupancy at
the property is 78%; excluding temporary tenants occupancy is 68%. The
property is currently being marketed for sale and closing is expected in 2012.

The third largest contributor to loss is secured by a 305,858 sf retail
property built in 1986, renovated in 2004 and located in Westminster, CO, just
north of Denver. The loan was transferred to special servicing in April 2011
for monetary default. The property was 74% occupied as of January 2012. The
loan was foreclosed upon in October 2011. The special servicer has engaged a
leasing team, which has made some progress. Prior to foreclosure, the receiver
negotiated a new lease with a restaurant tenant and drafted a renewal with an
existing tenant. The special servicer is in the process of reviewing the 2012
budget and determining capital needs for the next 12 months.

Fitch downgrades, revises Outlooks, and assigns or revises Recovery Estimates
(RE) for the following classes as indicated:

--$244.7 million class A-M to 'A' from 'AAA'; Outlook to Negative from Stable;

--$189.7 million class A-J to 'CCC' from 'B'; RE 75%;

--$52 million class B to 'C' from 'CCC'; RE 0%;

--$24.5 million class C to 'C' from 'CC'; RE 0%;

Additionally, Fitch affirms the following classes as indicated:

--$16.2 million class A-3 at 'AAA'; Outlook Stable;

--$68.4 million class A-AB at 'AAA'; Outlook Stable;

--$1,052.7 million class A-4 at 'AAA'; Outlook Stable;

--$262.4 million class A-1A at 'AAA'; Outlook Stable;

--$36.7 million class D at 'C'; RE 0%;

--$21.4 million class E at 'C'; RE 0%;

--$30.6 million class F at 'C'; RE 0%;

--$24.5 million class G at 'C'; RE 0%;

--$30.6 million class H at 'C'; RE 0%;

--$12.2 million class J at 'C', RE 0%;

--$6.1 million class K at 'C', RE 0%;

--$9.2 million class L at 'C', RE 0%;

--$3.1 million class M at 'C', RE 0%;

--$6.1 million class N at 'C', RE 0%;

--$9.2 million class O at 'C', RE 0%.

Fitch had previously withdrawn the rating on the interest-only class X.

Fitch does not rate the $87,148 class P certificates. Classes A-1 and A-2 have
paid in full.

Additional information on Fitch's amended criteria for analyzing U.S. fixed
rate CMBS is available in the Nov. 16, 2011 report, 'Surveillance Methodology
for U.S. Fixed-Rate CMBS Transactions,' which is available at
'www.fitchratings.com' under the following headers:

Structured Finance >> CMBS >> Criteria Reports

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);

--'Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions' (Dec. 21,
2011).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

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

Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=662869

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.

Contact:

Fitch Ratings
Primary Analyst
Lisa Cook, +1 212-908-0665
Director
Fitch, Inc.
One State Street Plaza
New York, NY 10004
or
Committee Chairperson
Mary MacNeill, +1 212-908-0785
Managing Director
or
Media Relations
Sandro Scenga, +1 212-908-0278 (New York)
sandro.scenga@fitchratings.com
Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement