Nov 20 - Fitch Ratings downgrades five classes of Citigroup Commercial
Mortgage Trust, series 2006-C5, commercial mortgage pass-through certificates,
due to further deterioration of performance. The downgrades are driven by a
decline in value of several loans in special servicing as well as a decline in
performance of several large loans since Fitch's last rating action. A detailed
list of rating actions follows at the end of this release.
Fitch modeled losses of 8.5% of the current balance which includes expected
losses on the specially serviced loans and Fitch loans of concern. Cumulative
losses, which include realized losses and current modeled losses, were 10.6% of
the original balance compared to 8.6% at the last rating action.
As of the October 2012 distribution date, the transaction's pooled principal
balance has been reduced by approximately 21.3% to $1.67 billion from $2.12
billion at issuance. Since Fitch's last rating action, two loans in the top 10
repaid without losses to the trust (Ala Moana Center and NNN WellPoint
Operations Center), while one loan, Four Points Sheraton, repaid with a realized
loss of 1%. Interest shortfalls are affecting classes E through P.
The largest contributor to losses is the IRET Portfolio Loan (7.3%). The loan is
secured by a portfolio of nine office buildings located in Nebraska (four),
Missouri (two), Minnesota (two), and Kansas (one) with a total of 936,720 square
feet (sf). Portfolio occupancy has declined to 82.5% as of July 2012 and cash
flow has declined since Fitch's last rating action. Fitch is modeling the loan
to default during the term.
The next largest contributor to losses is the One and Two Securities Center Loan
(4.1%). The loan is secured by a 521,957- sf office property located in Atlanta,
GA. The loan transferred to the special servicer in December 2010 for imminent
default when several tenants vacated upon lease expiration. The loan became REO
in November 2011. The property is 79% leased as of Sept. 2012. Recent valuations
indicate significant losses.
The third largest contributor to losses is the Courtyard Atlanta Roswell loan
(0.4%) which is secured by a 154-room hotel located in Roswell, GA. The property
became REO in March, 2011. The special servicer is preparing the asset for
disposition as soon as possible. Recent valuations indicate significant losses.
Fitch downgrades the following classes and revises the Outlooks and Recovery
Estimates (RE) as indicated:
--$172.6 million class A-J to 'BBsf' from 'BBBsf'; Outlook to Negative from
--$42.5 million class B to 'CCCsf' from 'BBsf'; RE 75%;
--$21.2 million class C to 'CCCsf' from 'Bsf'; RE 0%;
--$26.5 million class D to 'CCsf' from 'CCCsf'; RE 0%;
--$29.2 million class E to 'Csf' from 'CCsf'; RE 0%.
Fitch affirms the following classes:
--$65.7 million class A-3 at 'AAAsf'; Outlook Stable;
--$92.8 million class A-SB at 'AAAsf'; Outlook Stable;
--$774.3 million class A-4 at 'AAAsf'; Outlook Stable;
--$201.7 million class A-1A at 'AAAsf' Outlook Stable;
--$212.4 million class A-M at 'AAAsf'; Outlook Stable
--$26.5 million class F at 'Csf'; RE 0%;
--$21.2 million class G at 'Csf'; RE 0%.
Classes A-1, A-2, AMP-1, AMP-2, and AMP-3 have paid in full. Classes H through O
have realized losses and remain at 'Dsf' RE 0%. Fitch does not rate class P.
Fitch withdrew the ratings of the interest only class XP and XC. (For additional
information, see 'Fitch Revises Practice for Rating IO & Pre-Payment Related
Structured Finance Securities', dated June 23, 2010.)
Additional information on Fitch's 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,
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions