November 13, 2012 / 7:31 AM / in 5 years

TEXT-Fitch cuts 4 CSC series 1 classes to 'Dsf'

(The following statement was released by the rating agency)

Nov 13 - Fitch Ratings has downgraded CSC Series 1 GK’s four classes of the bonds to ‘Dsf’ and simultaneously withdrawn the outstanding ratings of the transaction due to tranche default. The transaction is a Japanese multi-borrower type CMBS securitisation. The details of the rating actions are as follows:

Class B-2 bonds downgraded to ‘Dsf’ from ‘CCsf’; rating withdrawn; Recovery Estimate NC

Class B-3 bonds downgraded to ‘Dsf’ from ‘CCsf’; rating withdrawn; Recovery Estimate NC

Class C-2 bonds downgraded to ‘Dsf’ from ‘Csf’; rating withdrawn; Recovery Estimate NC

Class D-2 bonds downgraded to ‘Dsf’ from ‘Csf’; rating withdrawn; Recovery Estimate NC

Class E-2 bonds ‘Dsf’; rating withdrawn; Recovery Estimate NC

Class E-3 bonds ‘Dsf’; rating withdrawn; Recovery Estimate NC

Class F-3 bonds ‘Dsf’; rating withdrawn; Recovery Estimate NC

Class G-3 bonds ‘Dsf’; rating withdrawn; Recovery Estimate NC

The downgrade of the class B-2 and B-3 bonds reflects non-payment of interest at legal final maturity on 13 November 2012, while the principal of these bonds was fully redeemed. The payment of a large special servicing fee relating to the sale of the collateral properties was deducted from the fund that pays the interest on the bonds, rather than from the account holding principal proceeds received from the underlying loan, resulting in the non-payment of interest for these classes.

The downgrade of the class C-2 and D-2 follows the write-down of the bond principal to zero at legal final maturity on 13 November 2012. Sales of properties backing the transaction have resulted in a partial repayment of the underlying loan and the remaining debt obligation was waived at end-October 2012.

Fitch will no longer calculate the Recovery Estimate for this transaction following the withdrawal of the ratings.

At closing in December 2006, the bonds were backed by loans extended to six borrowers, and secured by 72 properties. All properties were sold by end-September 2012.

Fitch will no longer provide ratings or analytical coverage for this transaction.

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