Fitch Ratings has upgraded two classes and affirmed 12 classes of Morgan Stanley Capital I Trust (MSCI) commercial mortgage pass-through certificates series 2006-TOP23. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrade to class A-J reflects the significant paydown since Fitch's last review (roughly $900 million) and the amount of defeased collateral (30.1% of the pool) that is maturing in July 2016. The upgrade to class B reflects the increase in credit enhancement as a result of the paydown. The affirmations to the classes below investment grade are due to the concentrated nature of the pool and the potential for additional maturity defaults. Of the 33 remaining loans, 15.4% matured in June 2016 and are still performing, while an additional 35.4% mature in July 2016. Fitch modeled losses of 22.7% of the remaining pool; expected losses on the original pool balance total 5.1%, including $28.9 million (1.8% of the original pool balance) in realized losses to date. Fitch has designated eight loans (40.1%) as Fitch Loans of Concern, which includes four specially serviced assets (14.7%).

As of the June 2016 distribution date, the pool's aggregate principal balance has been reduced by 85.5% to $234.1 million from $1.61 billion at issuance. Per the servicer reporting, four loans (30.1% of the pool) are defeased. Interest shortfalls are currently affecting classes G through P.

The largest contributor to expected losses is secured by a 155,012 square foot (sf) mixed-use (office and retail) property (6.6% of the pool) located in Savannah, GA. The loan transferred to the special servicer in July 2013 due to a payment default. Foreclosure occurred in May 2014 and the property subsequently became real estate owned (REO). The servicer has addressed some deferred maintenance issues and continues to increase occupancy, which was 52% according to the April 2016 rent roll. The disposition timing is still being determined.

The next largest contributor to expected losses is the 150 Hillside Avenue loan (9.1%), which is secured by a 128,818 sf office building located in White Plains, NY. The two largest tenants at the property occupy 95.7% of the total net rentable area (NRA). The largest tenant, The Dannon Company, occupies 57% of the NRA with their lease expiring in September 2017. The loan matures in June 2036, but has an ARD date in June 2018. Fitch applied a conservative analysis to this loan due to the lease rollover risk in 2017 and the interest rate increase scheduled for June 2018 should the loan fail to refinance. According to the October 2015 rent roll, the property is 100% occupied. The servicer reported DSCR for YE 2015 was reported to be 1.55x.

The third largest contributor to expected losses is also specially serviced and is secured by a portfolio of industrial properties (3.2%) located in IL. The loan transferred to the special servicer January 2013 due to the borrower's failure to remit the November 2012 payment. One of the four properties was sold in June 2013 and with the net proceeds applied to the loan. Foreclosure occurred on the remaining three properties in November 2014. Another property was sold by the special servicer in April 2016. The servicer is now attempting to the sell the two remaining properties, one of which is under contract and the other is being held as lease renewal negotiations are ongoing.

RATING SENSITIVITIES

Outlooks on classes A-J, B and D remain Stable due to increasing credit enhancement. The Outlook on class C has been revised to Positive from Stable to reflect the expected paydown from loans maturing in July 2016 (35.4%). Due to the concentrated nature of the pool and the potential for increased losses from maturing loans, Fitch applied a conservative analysis to the pool. As such, additional upgrades may be warranted if the bulk of maturing loans pay in full. The distressed class E through K notes are susceptible to further downgrades as losses are realized.

DUE DILIGENCE USAGE

No third party due diligence was provided or reviewed in relation to this rating action.

Fitch upgrades the following classes:

--$102.2 million class A-J to 'AAAsf' from 'Asf'; Outlook Stable;

--$32.3 million class B to 'Asf' from 'BBB-sf'; Outlook Stable.

Fitch affirms the following classes and revises Rating Outlooks and REs as indicated:

--$16.1 million class C at 'BBsf'; Outlook to Positive from Stable;

--$14.1 million class E at 'CCCsf'; RE 75%;

--$12.1 million class F at 'CCCsf'; RE 0%.

Fitch affirms the following classes:

--$26.2 million class D at 'Bsf'; Outlook Stable;

--$14.1 million class G at 'CCsf'; RE 0%;

--$10.1 million class H at 'Csf'; RE 0%;

--$4 million class J at 'Csf'; RE 0%;

--$2.8 million class K at 'Dsf'; RE 0%;

--$0 class L at 'Dsf'; RE 0%;

--$0 class M at 'Dsf'; RE 0%;

--$0 class N at 'Dsf'; RE 0%;

--$0 class O at 'Dsf'; RE 0%.

The class A-1, A-2, A-3, A-AB, A-4 and A-M certificates have paid in full. Fitch does not rate the class P certificates. Fitch previously withdrew the rating on the interest-only class X certificates.