News Column

Fitch Upgrades 3 Classes of GMAC 2004-C3

July 3, 2014

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has upgraded three classes and affirmed 14 classes of GMAC Commercial Mortgage Securities, Inc., series 2004-C3, commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrades and affirmations are the result of increasing credit enhancement and the resolution of six specially serviced loans since Fitch's last rating action. Although classes A-J, B and C have high credit enhancement, upgrades were limited given several loans are underperforming with maturities in 2014 and could potentially transfer to the special servicer. Should the pool experience an influx of specially serviced loans, these classes would be at risk of experiencing interest shortfalls. Fitch will not assign or maintain 'AAAsf' or 'AAsf' ratings for bonds that it believes have a high level of vulnerability to interest shortfalls and will generally cap ratings at 'Asf' should bonds be susceptible to recoverable interest shortfalls. See 'Criteria for Rating Caps and Limitations in Global Structured Finance Transactions', dated May 28, 2014, for more details.

Fitch modeled losses of 6.2% of the remaining pool; expected losses on the original pool balance total 8%, including $71.7 million (5.7% of the original pool balance) in realized losses to date. Only 49 of the original 92 loans remain, 10 loans (19% of the pool) are defeased. Fitch has designated 14 loans (27.7%) as Fitch Loans of Concern, which includes two specially serviced assets (3.1%). As of the June 2014 distribution date, the pool's aggregate principal balance has been reduced by 64% to $450.9 million from $1.25 billion at issuance. Interest shortfalls are currently affecting classes E through P. Of the 47 remaining performing loans, 43 loans (83.4% of the pool) are set to mature in 2014.

The largest contributor to expected losses is a 112,899 square foot (sf) retail center located in Coconut Creek, FL. The subject had historically been well occupied until 2006 when Winn-Dixie left the center, with Staples and Ace Hardware backfilling the Winn-Dixie space. Ace Hardware has since closed and Fitch expects Staples to vacate upon their lease expiration of November 2016. As of April 2014 the property reported occupancy of 48%. The loan was transferred to special servicing in August 2011 due to a maturity default and foreclosure was completed in January 2014. The servicer is currently formulating a disposition strategy for this real estate owned (REO) asset.

RATING SENSITIVITY

Rating Outlooks on classes A-1A through C are Stable as no additional rating changes are expected due to increasing credit enhancement from continued paydown which offsets some concern of the potential for maturity defaults. Additional downgrades to the distressed classes (those rated below 'Bsf') are expected as losses are realized.

Fitch upgrades the following classes and assigns Rating Outlooks as indicated:

--$82.9 million class A-J to 'Asf' from 'BBBsf', Outlook Stable;

--$31.3 million class B to 'BBBsf' from 'BBsf', Outlook to Stable from Negative;

--$14.1 million class C to 'BBsf' from 'Bsf', Outlook to Stable from Negative.

Fitch affirms the following classes and assigns Recovery Estimates (RE) as indicated:

--$121.4 million class A-1A at 'AAAsf', Outlook Stable;

--$24.2 million class A-4 at 'AAAsf', Outlook Stable;

--$138.6 million class A-5 at 'AAAsf', Outlook Stable;

--$20.3 million class D at 'CCsf', RE 95%;

--$12.5 million class E at 'Csf', RE 0%;

--$5.6 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%.

The class A-1, A-2, A-3 and A-AB certificates have paid in full. Fitch does not rate the class P certificates. Fitch previously withdrew the ratings on the interest-only class X-1 and X-2 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 28, 2014);

--'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=748821

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=837910

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

Dustin Pike

Associate Director

+1-212-612-7875

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, +1 212-908-0278

sandro.scenga@fitchratings.com

Source: Fitch Ratings


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