Fitch Downgrades 6 Classes of COMM 2006-C8; Removes 1 From Watch Negative

2009-01-09 05:46:02 -

Fitch Ratings downgrades, removes from Rating Watch Negative and assigns a Negative Rating Outlook to one class of COMM 2006-C8 Mortgage Trust, commercial mortgage pass-through certificates as follows:


--$9.4 million class O to 'B-' from 'B+'; Outlook Negative.


In addition, Fitch downgrades and maintains the Rating Outlooks on the following classes:


--$42.5 million class J to 'BBB-' from 'BBB'; Outlook Negative;


--$42.5 million class K to 'BB+' from 'BBB-'; Outlook Negative;


--$18.9 million class L to 'BB' from 'BB+'; Outlook Negative;


--$18.9 million class M to 'B+' from 'BB'; Outlook Negative;


--$4.7 million class N to 'B' from 'BB-'; Outlook Negative.


Fitch also affirms the following:


--$29.7 million class A-1 at 'AAA'; Outlook Stable;


--$100 million class A-2A at 'AAA'; Outlook Stable;


--$366 million class A-2B at 'AAA'; Outlook Stable;


--$244.5 million class A-3 at 'AAA'; Outlook Stable;


--$92.5 million class A-AB at 'AAA'; Outlook Stable;


--$1.1 billion class A-4 at 'AAA'; Outlook Stable;


--$668.8 million class A-1A at 'AAA'; Outlook Stable;


--$377.6 million class A-M at 'AAA'; Outlook Stable;


--$302.1 million class A-J at 'AAA'; Outlook Stable;


--Interest-only class X-P at 'AAA'; Outlook Stable;


--Interest-only class X-S at 'AAA'; Outlook Stable;


--$28.3 million class B at 'AA+'; Outlook Stable;


--$42.5 million class C at 'AA'; Outlook Stable;


--$37.8 million class D at 'AA-'; Outlook Stable;


--$23.6 million class E at 'A+'; Outlook Stable;


--$28.3 million class F at 'A'; Outlook Stable.


Fitch affirms the following and revised their Outlooks:


--$51.9 million class G at 'A-'; Outlook to Negative;


--$37.8 million class H at 'BBB+'; Outlook to Negative.


The $14.2 million class P, $9.4 million class Q, and $42.5 million class S are not rated by Fitch.


The rating downgrades and removal of one class from Rating Watch Negative are due to projected losses on the five specially serviced loans (3.2%). The Rating Outlooks reflect the likely direction of any rating changes over the next one or two years.


The largest specially serviced loan is the Fortress/Ryan's portfolio (1.6%), collateralized by 130 retail properties, specifically a mix of restaurant tenants, located in 22 different states. The loan transferred to the special servicer when the Master Lessee and Lease Guarantor filed for bankruptcy in January 2008. A loan and lease modification has recently been approved, which will allow for the removal of a specified number of locations from the lease in conjunction with a pro rata rent reduction for those locations. Additionally, the modification allows the borrower to sell the properties removed from the lease and apply the sale proceeds to pay down the loan balance. While losses are possible due to the value deterioration of the restaurant assets, they are not expected to be imminent.


The second largest specially serviced loan (0.9%) is secured by a portfolio of multifamily properties located in the Bronx, NY. The loan transferred to special servicing in November 2008 and is currently 60 days delinquent. Losses are expected.


The third largest specially serviced loan (0.4%) is collateralized by a student-oriented multifamily property located in Urbana, IL. The loan transferred to special servicing in February 2008 for imminent default. A sale contract has recently been executed for the property, resulting in an assumption of the loan at a reduced debt amount. The losses have been incorporated into Fitch's analysis.


Three loans, First City Tower (2.5%), Casual Male Headquarters (0.8%), and Minnesota Office Building (0.5%), maintain investment grade shadow ratings.


The largest shadow-rated loan, First City Tower, is an office property located in Houston, TX, that reported first-quarter 2008 occupancy of 91%, up from issuance occupancy of 85%. The second largest shadow rated loan, Casual Male Headquarters, is an industrial property located in Canton, MA. The building is 100% occupied by Casual Male Retail Group, Inc. with a lease expiration in January 2026. The third loan, Minnesota Office Building, is an office property in Minneapolis, MN. Occupancy as of July 2008 was 86%, an increase from the issuance occupancy of 61%.


Loan maturities range from 2011 to 2017, with 67.7% of the pool scheduled to mature in 2016.


Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 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.








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