News Column

Fitch Downgrades One Distressed Class of CGCMT 2006-FL2

June 13, 2014

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has downgraded one distressed pooled class of Citigroup Commercial Mortgage Trust (CGCMT) commercial mortgage pass-through certificates, series 2006-FL2. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The downgrade is the result of more certainty of losses on the Radisson Ambassador Plaza Hotel & Casino as the borrower has not made any progress towards a payoff and the forbearance agreement terminated in July 2013. Performance has also continued to decline and the borrower indicated they can no longer make debt service payments. An updated appraisal with a lower value indicates lower recoveries.

Since Fitch's last rating action, the pool has paid down by approximately $13.7 million due primarily to the payoff of the Doubletree Hospitality & Centre Plaza Office.

The transaction is collateralized by one loan, the specially-serviced Radisson Ambassador Plaza Hotel & Casino loan, a 233-room, full-service hotel and approximately 15,000 square foot (sf) casino located in the Condado section of San Juan, Puerto Rico. The loan transferred to special servicing in June 2011 for imminent maturity default. The borrower had exercised its third and final extension option, which expired on July 9, 2011. In January 2012, a forbearance agreement was executed, which terminated in July 2013 with no payoff from the borrower. For the year ending 2013 the NOI has decreased, resulting in a negative cash flow with an occupancy, ADR, and RevPAR of 66.6%, $124, and $83 respectively. Fitch continues to model significant losses to the senior pooled loan based on a Fitch adjustment to the most recent appraisal. The nonpooled RAM-1 and RAM-2 classes associated with the loan continue to be modeled with no recoveries in the base case.

RATING SENSITIVITIES

The rating on class J is revised to Negative as downgrades are possible if a prolonged workout for the Radisson Ambassador Plaza Hotel & Casino results in an increased expected loss. Additional downgrades to the distressed classes (those rated below 'B') are expected as losses are realized.

Fitch downgrades the following class as indicated:

--$22.4 million class K to 'CCsf' from 'CCCsf'; RE 50%

Fitch affirms the following classes and revises Rating Outlooks as indicated:

--$3.7 million class J at 'BBB+sf'; Outlook to Negative from Stable;

--$23.9 million class L at 'Csf'; RE 0%;

--$2 million class RAM-1 at 'Csf'; RE 0%;

--$2.4 million class RAM-2 at 'Csf'; RE 0%.

The following classes originally rated by Fitch have paid in full: A-1, A-2, X-1, B, C, D, E, F, G, H, CAN-1, CAN-2, CAN-3, CAC-1, CAC-2, CAC-3, CNP-1, CNP-2, CNP-3, DSG-1, HFL, HGI-1, HGI-2, HMP-1, HMP-2, HMP-3, MVP, WBD-1, and WBD-2. In addition, Fitch previously withdrew the ratings on the interest-only classes X-2 and X-3.

Fitch did not rate the non-pooled classes DHC-1, DHC-2, DHC-3, DSG-2, PHH-1, PHH-2, SRL, and WPP.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 20, 2014);

--'Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions' (Sept. 20, 2013).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748821

Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=718468

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=834610

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

Darren Liss

Director

+1-212-908-0753

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

Committee Chairperson

Mary MacNeill

Managing Director

+1-212-908-0785

or

Media Relations

Sandro Scenga, New York, +1-212-908-0278

sandro.scenga@fitchratings.com

Source: Fitch Ratings


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