OREANDA-NEWS. March 16, 2015. Fitch Ratings has downgraded JCREF CMBS 2007-1 GK's class E notes due December 2015 to 'Dsf' and simultaneously withdrawn the rating due to tranche default. The transaction is a Japanese multi-borrower type CMBS securitisation. The details of the rating actions are as follows:

JPY1.4bn* Class E notes downgraded to 'Dsf' from 'Csf'; rating withdrawn
*as of 12 March 2015

KEY RATING DRIVERS

The downgrade of the class E notes follows the completion of workout activities of all defaulted loans backing the transaction. Since the previous rating action in July 2014, workout activities for the remaining two defaulted loans have been completed and the available funds from the underlying loans have been applied to the note repayment. Together with the available cash reserved at the transaction level, these proceeds were sufficient to redeem the class B to D notes in full by December 2014. The remainder from the cash reserved at the transaction level, which will mostly be used for the liquidation of the note issuer, is much smaller than the outstanding balance of the class E notes. Therefore, Fitch expects the class E notes' principal to be written down at the next payment date in June 2015.

According to the transaction structure, principal losses on defaulted loans will not cause a reduction in the note principal until available cash, including that reserved cash in the transaction account, is fully applied to the note repayment.

Fitch will no longer calculate the Recovery Estimate for this transaction following the withdrawal of the ratings.

Fitch assigned ratings to this transaction in November 2007. At closing, the notes were secured by nine loans or Tokutei Mokuteki Kaisha bonds (collectively, the underlying loans) collateralised by 56 properties.

Contacts:

Lead Surveillance Analyst
Naoki Saito
Director
+81 3 3288 2631
Fitch Ratings Japan Limited
Kojimachi Crystal City, East Wing, 3rd Floor
4-8 Kojimachi, Chiyoda-ku
Tokyo 102-0083

Committee Chairperson
Atsushi Kuroda
Senior Director
+81 3 3288 2692

Media Relations: Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com.

Additional information is available at www.fitchratings.com.

The sources of information used for the review of this transaction were the servicer, Premier Asset Management Company and the issuer, JCREF CMBS 2007-1 GK.

Applicable criteria, 'Global Structured Finance Rating Criteria', dated 4 August 2014; 'Criteria for Rating CMBS in Asia-Pacific', dated 2 May 2014; and 'Counterparty Criteria for Structured Finance and Covered Bonds', dated 14 May 2014; are available at www.fitchratings.com.

Related research, 'Structured Finance Recovery Estimates for Distressed Securities', dated 18 November 2011; is available at www.fitchratings.com.