NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed 10 classes of GE Commercial Mortgage Corporation series 2004-C2 commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The affirmations are due to sufficient credit enhancement to the remaining Fitch rated classes. Fitch modeled losses of 17.8% of the remaining pool; expected losses on the original pool balance total 2.2%, including $1.4 million (0.1% of the original pool balance) in realized losses to date.
As of the February 2014 distribution date, the pool's aggregate principal balance has been reduced by 88.7% to $158.7 million from $1.4 billion at issuance. Six of the remaining 20 loans are specially serviced (35.1% of the pool) and three are defeased (5.7% of the pool).
The largest contributor to expected losses is a 477,259 square foot (sf) office building located in Downtown Columbus, OH. The loan is specially-serviced (14.6% of the pool). Occupancy was 80.3% as of the February 2014 rent roll; the second largest tenant has extended their lease to June 2015 from June 2013.
The second largest contributor to expected losses is a specially-serviced loan (4.5% of the pool), which is secured by an 80,211 sf retail property located in Marlton, NJ, approximately 15 miles east of Philadelphia and 85 miles southwest of New York City. The loan was transferred to the special servicer in February 2012 for imminent default. Occupancy was 56.8% as of December 2013.
The third largest contributor to expected losses is a specially-serviced loan (5.3% of the pool), which is secured by a 93,541 sf grocery anchored retail center located in Keller, TX (Dallas-Fort Worth MSA). The property is anchored by Kroger (66.2% NRA, expiration June 2022). The loan recently transferred to special servicing in February 2014 for balloon payment/maturity default. Occupancy was at 92% as of October 2013 and DSCR was 1.03x as of year-to-date third quarter 2013.
RATING SENSITIVITY
The ratings of investment grade classes C to G are expected to remain stable due to increasing credit enhancement and continued paydown. Despite high credit enhancement, upgrades are not expected due to the concentrated pool and the credit characteristics of the remaining collateral. The distressed classes (those rated below 'B') are expected to be subject to further downgrades as losses are realized. In addition, classes H and J may be subject to downgrades should realized losses be greater than Fitch's expectations.
Fitch affirms the following classes as indicated:
--$5.3 million class C at 'AAAsf', Outlook Stable;
--$25.8 million class D at 'AAsf', Outlook Stable;
--$15.5 million class E at 'AAsf', Outlook Stable;
--$18.9 million class F at 'Asf', Outlook Stable;
--$17.2 million class G at 'BBBsf', Outlook to Stable from Negative;
--$18.9 million class H at 'BBsf', Outlook Negative;
--$10.3 million class J at 'Bsf', Outlook Negative;
--$8.6 million class K at 'CCCsf', RE 100%;
--$6.9 million class L at 'CCCsf', RE 100%;
--$5.2 million class M at 'CCCsf', RE 100%.
The class A-1, A-2, A-3, A-4, A-1A, B, PPL-1, PPL-2, PPL-3, PPL-4, PPL-5 and PPL-6 certificates have paid in full. Fitch does not rate the class N, O and P certificates. Fitch previously withdrew the rating on the interest-only class X-1 certificates and the interest-only class X-2 certificates have paid in full.
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=821321
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