OREANDA-NEWS. Fitch Ratings has affirmed all classes of Capital Trust RE CDO 2005-1 (Capital Trust 2005-1). Further, Fitch has determined that a proposed Supplemental Indenture will not impact the ratings of the transaction. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

Capital Trust 2005-1 is highly concentrated with assets from only five obligors remaining in the portfolio. The CDO is significantly under collateralized. 100% of the portfolio is considered either defaulted or Fitch assets of concern. Since Fitch's last rating action, the capital structure has paid down by \$29.6 million with de minimis additional realized losses. As of the April 2015 trustee report, the CDO was 76.5% B-notes and 23.5% CRE CDOs (all rated 'Csf'). Total recoveries are expected to be low due to the subordinate and/or distressed nature of the remaining collateral.

On March 20, 2012, the Trustee declared an event of default (EOD) due to non-payment of full and timely accrued interest to the class B notes. The class B notes are a non-deferrable class and have been affirmed at 'Dsf' due to default in the timely payment of their accrued interest. As of the time of this rating action, the noteholders have not given direction to accelerate the notes or liquidate the portfolio.

This transaction was analyzed according to the 'Surveillance Criteria for U.S. CREL CDOs', which applies stresses to property cash flows and debt service coverage ratio (DSCR) tests to project future default levels for the underlying collateral in the portfolio.

The largest component of Fitch's base case loss is related to three non-senior securities (23.5%) from the same obligor, CT CDO IV Ltd. 2006-1, all of which are rated 'Csf' by Fitch.
The ratings for classes C through H are based on a deterministic analysis that considers Fitch's base case loss expectation for the pool and the current percentage of defaulted assets and Fitch Assets of Concern, factoring in anticipated recoveries relative to the credit enhancement of each class.

Currently, given that an Event of Default has been triggered, the ability of the collateral manager to manage the CDO is constrained by the transaction document restrictions on selling or liquidating assets unless either the amount collected would be sufficient to pay the obligations of the transaction in full or 66 2/3% of each class of notes consent to the transaction. In April 2015, Fitch Ratings was notified by the Trustee of a proposed Supplemental Indenture to the CDO, which will permit the collateral manager to sell assets after the occurrence of an Event of Default in limited circumstances, including the Collateral Manager providing an officer's certificate to the trustee that sets forth a factual determination that the sale of a particular asset will not materially and adversely affect the rights of any class of noteholders as well as make reasonable effort to inform noteholders of a sale's pendency at least 10 days prior to such sale. The purpose of the proposed Supplemental Indenture is to allow the collateral manager more flexibility to manage the CDO when beneficial sale opportunities arise and/or to avoid adverse regulatory circumstances. The ratings of the transaction will not be affected by the proposed Supplemental Indenture.

On April 14, 2015, the Trustee forwarded notice of the proposed Supplemental Indenture to the noteholders and holders of the preferred shares of the transaction. Interested parties should contact the trustee for further details. It remains the exclusive responsibility of the note holders to perform their own risk analysis of any proposed changes. Fitch is not a party to the transaction and therefore does not provide consent or approval, as that remains the sole preserve of the transaction parties. Fitch expects to be notified by the trustee when or if the supplemental indenture is executed.

RATING SENSITIVITIES

There is potential for classes C through H to be downgraded to 'Dsf' if they experience principal writedowns.

Capital Trust 2005-1 is a commercial real estate collateralized debt obligation (CDO) managed by CT Investment Management Co., LLC (CTIMCO).

Fitch has affirmed the following classes:

--\$31.1 million class B at 'Dsf'; RE 50%;
--\$21.1 million class C at 'Csf'; RE 0%;
--\$14.4 million class D at 'Csf'; RE 0%;
--\$15.2 million class E at 'Csf'; RE 0%;
--\$6.8 million class F at 'Csf'; RE 0%;
--\$6.8 million class G at 'Csf'; RE 0%;
--\$10.1 million class H at 'Csf'; RE 0%.

Class A is paid in full. Fitch does not rate the class J and X-J certificates or the preferred shares.