Fitch Ratings affirms, removes from Rating Watch Negative, and assigns Rating Outlooks to Lehman Brothers Floating Rate Commercial Mortgage commercial mortgage pass-through certificates, series 2006-CCL-C2.
The rating affirmations are due to the maturity extension and the continued paydown of the only remaining loan in the pool, the Charlottesville Portfolio. While Fitch expects the principal balance of the remaining class to be paid in full, there will continue to be interest shortfalls due to special servicing fees.
The Positive Outlook reflects the high likelihood of the shortfalls to class M being fully recovered. Per the loan documents, prior to any paydown of the B-Note, all of the previously paid monthly special servicing fees, liquidation fees, and workout fees that were paid through the trust must be reimbursed. Once the principal balance of the trust is paid in full, funds will next be directed to paying the balance of the interest shortfalls.
As of the April 2010 remittance date, the transaction's principal balance had decreased by 99.9% to $1.76 million from $932.9 million at issuance. Fifteen of the original 16 loans have paid in full. The remaining loan is secured by a multifamily rental property that was converted to condominiums.
The Charlottesville Portfolio was transferred to special servicing in February 2008 due to the depletion of the interest reserve as well as the continued lack of sales. The loan is secured by two former multifamily properties located in Charlottesville, VA - Walker Square and Riverbend - that were converted to condominiums. The loan matured Sept. 16, 2008 with no additional extension options. The loan has paid down by 95.3% since issuance. The sale of one unit closed in April 2010 bringing the number of unsold units to 133. The special servicer has modified the loan and extended the maturity to Sept. 16, 2010 with an additional one year extension option. The loan was transferred back to the master servicer in April 2010. Due to the small remaining balance of the trust and the limited number of condo sales needed to payoff the balance, a full recovery is likely.
Fitch affirms, removes from Rating Watch Negative and assigns Outlooks to the following classes:
--$20.7 million class M at 'BB+'; Outlook Positive;
--Interest-only class X at 'AAA'; Outlook Stable.
Classes A-1, A-2, X-FLP, B, C, D, E, F, G, H, J, K, L, ASH-1 and ASH-2 have paid in full.
Fitch does not rate the following classes: BRD, GRS, ZPH, PPL, MTH, PRM, PKT-1, PKT-2, PKT-3, CGR, RGB-1, RGB-2, or RGB-3.
Additional information is available at 'www.fitchratings.com'.
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