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Fitch Downgrades Two Distressed Classes of CSMC 2006-C4

January 23, 2014

NEW YORK --(BUSINESS WIRE)-- Fitch Ratings has downgraded two distressed classes and affirmed 18 classes of Credit Suisse Commercial Mortgage Trust ( CSMC 2006-C4) commercial mortgage pass-through certificates series 2006-C4. A detailed list of rating actions follows at the end of this press release. KEY RATING DRIVERS Fitch modeled losses of 11.8% of the remaining pool; expected losses on the original pool balance total 16%, including $281.2 million (6.6% of the original pool balance) in realized losses to date. Fitch has designated 95 loans (35.4%) as Fitch Loans of Concern, which includes 19 specially serviced assets (4.7%) and five loans within the Top 15 (20.8%). As of the January 2014 distribution date, the pool's aggregate principal balance has been reduced by 20.3% to $3.41 billion from $4.27 billion at issuance. Per the servicer reporting, four loans (1.4% of the pool) are defeased. Interest shortfalls are currently affecting classes C through S. The largest contributor to expected losses is The Ritz-Carlton South Beach loan (5.3% of the pool), which is secured by a 376 room full-service hotel located in Miami, FL. Debt service coverage ratio (DSCR) remained relatively flat at year-end (YE) 2012 (1.08x) compared to YE 2011 (1.06x). Per the latest Smith Travel Report as of November 2013 , the trailing 12 month (TTM) revenue per available room (RevPAR) is trending downward at $369.59 compared to $494.91 at YE 2012; even though occupancy has increased, average daily rate (ADR) is significantly lower. However, the property continues to outperform its competitive set in terms of RevPAR. The next largest contributor to expected losses is the Carlton Hotel on Madison loan (2.8%), which is secured by a 316-room full service hotel located in New York, NY . The property is underperforming relative to the market. However, the TTM September 2013 DSCR is showing signs of improvement at 0.69x , compared to 0.55x and 0.17x as of YE 2012 and YE 2011, respectively. The third largest contributor to expected losses is the 280 Park Avenue loan (8.8%), which is secured by a 1.2 million square foot office tower located in New York, NY . Following significant tenant rollover experienced in early 2012, the property was 55.7% occupied as of June 2013 . The year-to-date (YTD) June 2013 servicer reported DSCR was 0.66x compared to 0.70x at YE 2012 and 1.28x at YE 2011. The largest loan in the pool is the 11 Madison Avenue loan (23.7%). As of the September 2013 rent roll, occupancy was down to 89% from 99% as of YE 2012 and YE 2011. Credit Suisse, which currently occupies 81% of the property, recently announced its plan downsize to 54% under a new 20 year lease (existing lease scheduled to expire in 2017). Sony will reportedly occupy 23% of total space, thereby reducing total current occupancy by approximately 4%. The YTD September 2013 DSCR was 0.88x compared to 1.11x at YE 2012 and 1.06x at YE 2011. RATING SENSITIVITY Rating Outlooks on classes A-3 through A-1A remain Stable due to increasing credit enhancement and continued paydown. Rating Outlook on class A-M remains Negative due to significant maturity concentration in 2016 (89.4%) and the high concentration of Fitch LOCs. Fitch downgrades the following classes as indicated: -- $37.4 million class D to 'Csf' from 'CCsf', RE 0%; -- $21.4 million class E to 'Csf' from 'CCsf', RE 0%. Fitch affirms the following classes as indicated: -- $1.7 billion class A-3 at 'AAAsf', Outlook Stable; -- $150 million class A-4FL at 'AAAsf', Outlook Stable; -- $558.1 million class A-1A at 'AAAsf', Outlook Stable; -- $427.3 million class A-M at 'BBB-sf', Outlook Negative; -- $341.8 million class A-J at 'CCCsf', RE 50%; -- $26.7 million class B at 'CCsf', RE 0%; -- $64.1 million class C at 'CCsf', RE 0%; -- $48.1 million class F at 'Csf', RE 0%; -- $34.1 million 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%; -- $0 class P at 'Dsf', RE 0%; -- $0 class Q at 'Dsf', RE 0%. Fitch does not rate the class S certificates. Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 11, 2013 report, 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is available at ' www.fitchratings.com ' under the following headers: Structured Finance >> CMBS >> Criteria Reports Additional information is available at ' www.fitchratings.com '. Applicable Criteria and Related Research : --'Global Structured Finance Rating Criteria' ( May 24, 2013 ); --'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' ( Dec. 11, 2013 ). Applicable Criteria and Related Research : Global Structured Finance Rating Criteria http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661 U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724961 Additional Disclosure Solicitation Status http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=816656 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. Fitch Ratings Primary Analyst Tiffany Pierce , +1-212-908-9107 Associate Director Fitch Ratings, 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 Source: Fitch Ratings


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