Manhattan House Bonds Downgraded to Junk; Loan Transferred to "Special Servicing"

August 16, 2007 11:06 AM Eastern Daylight Time

Fitch Downgrades 1 & Places 2 Classes of CSFB 2005-CND2 on Rating Watch Negative

CHICAGO--(BUSINESS WIRE)--Fitch Ratings downgrades the following class of Credit Suisse First Boston's (CSFB) commercial mortgage pass-through certificates, series 2005-CND2:

--$18.8 million class N to 'B-' from 'BB-'.

Fitch places the following classes on Rating Watch Negative (RWN):

--$32 million class L rated 'BBB-';

--$23 million class M rated 'BB'.

In addition, Fitch affirms the following classes:

--$327.5 million class A-2 at 'AAA';

--Interest-only class A-X-1 at 'AAA';

--Interest-only class A-X-2 at 'AAA';

--Interest-only class A-X-3 at 'AAA';

--Interest-only class A-X-4 at 'AAA';

--Interest-only class A-X-5 at 'AAA';

--Interest-only class A-Y at 'AAA';

--$64 million class B at 'AAA';

--$63 million class C at 'AA';

--$39 million class D at 'AA';

--$36 million class E at 'AA-';

--$35 million class F at 'A+';

--$37 million class G at 'A';

--$33 million class H at 'A-';

--$36 million class J at BBB+';

--$32 million class K at 'BBB'.

Classes A-1, A-1S, and A-1J have been paid in full.

The downgrade of class N and placement of classes L and M on RWN are due to concerns about fees resulting from the transfer of the largest loan, Manhattan House (58%), to special servicing as well as concerns about the transaction's remaining loans, two (8.9%) of which have matured and remain in the trust.

As of the August 2007 remittance date, the transaction's principal balance had decreased by 61% to $776.3 million from $1.9 billion at issuance. Six loans remain in the pool: Manhattan House (58%), River Terrace (24.3%), Mizner Court at Broken Sound (7.4%), Spring Harbor (4.9%), Spring Landing (4.0%), and 80 John Street (1.4%).

The Manhattan House loan has been transferred to special servicing due to an unresolved buy-out dispute between the partners as well as resident-initiated litigation. There have been no sales or contracts signed for any of the units. The loan matures on Nov. 9, 2007. The loan, which has a trust balance of $450 million and additional subordinate debt of $306 million, is secured by a 583-unit multifamily rental building located on the Upper East Side of Manhattan, New York.

At issuance, the Prestige Portfolio loan was secured by five rental apartment properties (Spring Harbor, Tuscany Place, Spring Landing, Florida Club, and Summer Cove) in four different Florida cities with a total of 1,296 units that initially were to be converted to condominiums. The borrower cancelled the conversion of the rental units into condominiums, and is sold three of the five properties. The two remaining properties, Spring Harbor and Spring Landing, matured on Aug. 9, 2007.

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Contacts

Fitch Ratings
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Britt Johnson, +1-312-606-2341
Sandro Scenga, +1-212-908-0278 (Media Relations)