NEW YORK - (Business Wire) Fitch Ratings has upgraded five classes of GS Mortgage Securities Corp. II Series 2004-C1 as follows:
-- $12.3 million class E to 'AAA' from 'AA+';
-- $13.4 million class F to 'AA+' from 'A+';
-- $7.8 million class G to 'A+' from 'A';
-- $7.8 million class H to 'A-' from 'BBB+';
-- $5.6 million class J to 'BBB+' from 'BBB'.
Fitch has also affirmed the following classes:
-- $104.1 million class A-1 at 'AAA';
-- $190.5 million class A-2 at 'AAA';
-- $125.4 million class A-1A at 'AAA';
-- Interest only classes X-1 and X-2 at 'AAA';
-- $20.1 million class B at 'AAA';
-- $7.8 million class C at 'AAA';
-- $16.7 million class D at 'AAA';
-- $3.3 million class K at BB+';
-- $3.3 million class L at 'BB-'.
-- $4.5 million class M at 'B+';
-- $3.3 million class N at 'B';
-- $3.3 million class O at 'B-'.
Fitch does not rate the $13.4 million class P.
The upgrades reflect increased credit enhancement due to the payoff of eight loans and scheduled amortization since Fitch's last rating action. As of the August 2008 distribution date, the pool has paid down 39.2%, to $542.7 million from $892.3 million at issuance. Fifteen loans (35.3%) are defeased.
Fitch has reviewed the performance of the remaining non-defeased shadow rated loan, The Water Tower Center (9.6%). The loan, which is secured by a regional anchored shopping mall located in Chicago, IL, maintains its investment grade shadow rating due to stable performance. There are a total of six pari passu notes A-1 through A-6 with the A-3 and A-4 pieces included in the trust. The property is currently 88.3% leased, compared to 96.1% occupied at issuance due to Lord & Taylor store closing. The American Girl has signed a 15-year lease for part of the vacated space which starts in February 2009. The loan is amortizing and is scheduled to mature in September 2010.
Three loans (3.1%) have been identified as Fitch loans of concern due to declining performance. The largest Fitch loan of concern (1.5%), which is in special servicing, is secured by a 282 unit multifamily property in San Antonio, TX. The loan was transferred to special servicing for an imminent maturity default after the borrower stated that he will not be able to refinance by the maturity date of October 1, 2008. Servicer reported year end (YE) 2007 debt service coverage ratio (DSCR) was only 0.35 times (X), compared to 1.57x at issuance. The property is currently 63% occupied, compared to 85.8% at issuance. The property suffered a fire in 2007 that damaged several units. Per a recent inspection by the servicer, all damages have been repaired. The special servicer is looking into possible workout options. Fitch will continue to monitor this loan.
The second largest Fitch loan of concern (1.1%) is secured by a 310 unit multifamily property in Houston, TX. Servicer report YE07 DSCR was 1.06x, compared to 2.0x at issuance. The decline in performance was caused by increased operating expenses, resident turnover, and high concessions offered at the property.
Eleven loans (17.5%) are scheduled to mature in 2008, including eight non-defeased loans (9%). The interest rates on these loans range from 4.55% to 5.43% with weighted average coupon of 4.95%. Servicer reported YE07 DSCR ranges from 0.35x to 2.3x with weighted average DSCR at 1.73x.
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.
Fitch Ratings, New York
Amy Gan, +1-212-908-9143
Adam Fox, +1-212-908-0869
Sandro Scenga, +1-212-908-0278 (Media Relations)
