Fitch Upgrades Two Classes of CGCMT 2006-C4

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has upgraded two and affirmed 12 classes of Citigroup Commercial Mortgage Trust (CGCMT) commercial mortgage pass-through certificates series 2006-C4 as a result of significant paydown. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The upgrades to the senior classes are the result of increasing credit enhancement from defeasance and loan payoffs of approximately $1 billion since the beginning of 2016. The affirmations of the distressed classes reflect the adverse selection for the remaining collateral. Based on the concentrated nature of the pool, Fitch applied an additional stress in its analysis. Of the 19 remaining loans, 83.3% are considered as Fitch Loans of Concern (FLOCs), including nine loans (64.5%) in special servicing. Of the performing loans, three (16.6%) mature in June 2016 and six (7.8%) have maturities in 2021. One loan (4.2%) is defeased.

As of the May 2016 distribution date, the principal balance has been reduced by 93.6% to $144.9 million from $2.26 billion at issuance. Total realized losses to date total $152.8 million (6.8%) of the original pool balance. Interest shortfalls are currently affecting classes F through P.

The largest contributor to expected losses is the specially-serviced DuBois Mall loan (21% of the pool), which is secured by a 441,059 square foot (sf) regional mall located in Dubois, PA. As of year-end 2015, DSCR and occupancy were reported at 1.22x and 92%, respectively. The loan transferred to the special servicer in May 2016 in anticipation of not being able to refinance prior to its June 2016 maturity date. The loan remains current.

The next largest contributor to expected losses is the specially-serviced 60 Frontage Road loan (8.9%), which is secured by a 130,706 sf single-tenant office property in Andover, MA. The loan transferred to special servicing April 2015 due to imminent default, as the single tenant vacated the property upon lease expiration in December 2015. Property remains vacant and the loan status is listed as in foreclosure.

RATING SENSITIVITIES

Fitch analysis employed an additional stressed scenario to reflect the pool's exposure to single-event risk associated with the large percentage of the pool in special servicing, including the largest loan in the pool as well as significant concentration with only 19 loans remaining. Further upgrades are unlikely as the potential for future performance volatility of the concentrated pool warrants a cap on ratings of the remaining classes. 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 and assigns or revises Rating Outlooks as indicated:

--$9 million class A-J to 'AAAsf' from 'BBsf'; Outlook Stable;

--$50.9 million class B to 'BBsf' from 'Bsf'; Outlook to Stable from Negative.

Fitch affirms the following classes but assigns or revises REs as indicated:

--$25.5 million class C at 'CCCsf'; RE 100%.

Fitch affirms the following classes as indicated:

--$31.1 million class D at 'CCsf'; RE 0%;

--$22.6 million class E at 'Csf'; RE 0%;

--$5.8 million 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%;

--$0 class O at 'Dsf'; RE 0%.

Classes A-1, A-2, A-3, A-1A, A-M and A-SB have paid in full. Fitch does not rate class P. Fitch previously withdrew the rating on the interest-only class X certificates.

Structured Finance then CMBS then Criteria Reports

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 Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1005185

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1005185

Endorsement Policy

https://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/20160526006240/en/

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

Source: Fitch Ratings

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Form 8.3 - LondonMetric Property Plc & Schroder REIT
• Element 29 Renews IR Consultant Agreement and Engages Market Maker
• Nextech3D.ai Unveils Strategic AI Growth Roadmap Focused on Workforce Intelligence and Event Technology Innovation