Fitch Upgrades 2 Classes of GCCFC 2007-GG9

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has upgraded two classes and affirmed 18 classes of Greenwich Capital Commercial Funding Corp. (GCCFC) commercial mortgage pass-through certificates series 2007-GG9. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

Fitch modeled losses of 7.8% of the remaining pool; expected losses on the original pool balance total 12.8%, including $542.5 million (8.3% of the original pool balance) in realized losses to date. Fitch has designated 29 loans (25.4%) as Fitch Loans of Concern, which includes nine specially serviced assets (7.1%).

As of the April 2016 distribution date, the pool's aggregate principal balance has been reduced by 41.1% to $3.88 billion from $6.58 billion at issuance. Per the servicer reporting, 21 loans (30.2% of the pool) are defeased. Interest shortfalls are currently affecting classes D through S. The upgrades reflect significant defeasance in excess of $1.1 billion since Fitch's last review resulting in increased defeasance-adjusted credit enhancement (CE) for the senior classes.

The largest contributor to expected losses is the specially-serviced COPT Office Portfolio (3.4% of the pool). The asset is real estate owned (REO) and originally consisted of nine office properties, totaling 618,541 square feet (sf), located in Linthicum, MD, and five office properties, totaling 400,441 sf, in Colorado Springs, CO. Five of the properties have been sold, one is under contract and the remaining eight properties are REO and most are being marketed for sale.

The next largest contributor to expected losses is the TIAA RexCorp Long Island Portfolio loan (6.1%), which is secured by five office properties totaling 1.2 million sf, located in Nassau and Suffolk counties on Long Island, NY. While occupancy has been fairly stable, rental rates have eroded in the past few years due to weak market conditions. As of YE 2015, occupancy had increased to 95%. The YE 2015 net cash flow (NCF) DSCR was 1.37x, an increase from 1.16x at YE 2014.

The third largest contributor to expected losses is the Plaza America Towers I and II loan (3.6%), which is secured by two office buildings containing 509,430 sf of space located in Reston, VA. The property cash flows have suffered due to the largest tenant vacating the property at lease expiration in 2011. As of YE 2015, the property was 87.9% occupied, a slight improvement from 84.2% at YE 2014. While occupancy improved, DSCR declined to 0.86x compared to 0.97x last year. DSCR is expected to improve in the coming year as rent concessions burn off.

RATING SENSITIVITIES

Rating Outlooks on classes A-4 through A-MFX are Stable due to increasing CE from continued defeasance and paydown. Ratings of classes A-M and A-MFX are capped at 'A' as nearly 100% of the pool matures in the next year, potential adverse selection, and possible interest shortfalls should loans fail to pay off at maturity. Further upgrades to classes A-M and A-MFX are possible if the majority of the pool pays off at maturity and the larger specially serviced loans are resolved. Further downgrades to the distressed classes will occur as losses are realized.

DUE DILIGENCE USAGE

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

Fitch upgrades the following classes:

--$557.6 million class A-M to 'Asf' from 'BBBsf'; Outlook Stable;

--$100 million class A-MFX to 'Asf' from 'BBBsf'; Outlook Stable.

Fitch affirms the following classes as indicated:

--$2.2 billion class A-4 at 'AAAsf'; Outlook Stable;

--$196 million class A-1A at 'AAAsf'; Outlook Stable;

--$575.4 million class A-J at 'CCCsf'; RE 90%;

--$32.9 million class B at 'CCsf'; RE 0%;

--$98.6 million class C at 'Csf'; RE 0%;

--$41.1 million class D at 'Csf'; RE 0%;

--$25.5 million class E at 'Dsf'; RE 0%;

Fitch affirms classes F through Q, which have been reduced to zero balance by realized losses, at 'Dsf'; RE 0%.

The class A-1, A-2, A-3 and A-AB certificates have paid in full. Fitch does not rate the class S certificates. Fitch previously withdrew the rating on class A-MFL and the interest-only class X certificates.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

Criteria for Rating Caps and Limitations in Global Structured Finance Transactions (pub. 28 May 2014)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748781

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 Formhttps://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1003980

Solicitation Statushttps://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1003980

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

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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160504006401/en/

Fitch Ratings
Primary Analyst:
R. Brook Sutherland, +1-312-606-2346
Senior Director
Fitch Ratings, Inc.
70 West Madison
Chicago, IL 60602
or
Committee Chairperson:
Mary MacNeill, +1-212-908-0785
Managing Director
or
Media Relations:
Sandro Scenga, +1-212-908-0278
New York
[email protected]

Source: Fitch Ratings

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