OREANDA-NEWS. Fitch Ratings has upgraded two classes and affirmed five classes of GE Commercial Mortgage Corporation (GECMC) commercial mortgage pass-through certificates series 2005-C2. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrades reflect actual and expected increases in credit enhancement from amortization and pay down from maturing loans. The transaction has paid down \$837.4 million (45% of the original pool balance) since Fitch's last rating action and according to the servicer, five loans totaling \$27.7 million (34.6% of the current pool) are anticipated to pay in full by their respective maturities on or before May 1, 2015. The affirmations on the distressed classes H through M reflect the concentrated nature and adverse selection of the pool, with only 10 of the original 142 loans remaining.

Fitch modeled losses of 17.9% of the remaining pool; expected losses on the original pool balance total 3.7%, including \$53.8 million (2.9% of the original pool balance) in realized losses to date. Fitch has designated three loans (45.7%) as Fitch Loans of Concern. As of the April 2015 remittance date, two loans were in special servicing (43.6% of the pool), including the largest loan in the pool, Chatsworth Business Park (29.3%).

As of the April 2015 distribution date, the pool's aggregate principal balance has been reduced by 95.7% to \$79.9 million from \$1.86 billion at issuance. No loans are defeased. Interest shortfalls are currently affecting classes G through Q.

The largest contributor to expected losses is the specially-serviced Chatsworth Business Park loan, the largest loan in the pool (29.3% of the pool). The loan is secured by a 231,770 square foot (sf) office property in Chatsworth, CA. The property is currently 71% leased by a single tenant, County of LA, through March 2016. The property was also previously occupied by Sanyo North America Corp. (previously 29% net rentable area [NRA]) which vacated the property in 2014 prior to its February 2017 lease expiration. The loan had transferred to special servicing in March 2010 for imminent maturity default, followed shortly thereafter by the maturity of the loan in April 2010. The lender foreclosed on the property and the asset has been real estate owned (REO) since August 2012. The asset was offered for sale in an October 2013 auction, but did not sell. The servicer is currently working to re-lease the vacant space, and negotiations are on-going to extend the County of LA lease. Total exposure on the loan has been reduced to \$24.5 million as of April 2015 from \$35.7 million in 2013 through repayment of servicer advances and loan principal from property excess cash flow.

The next largest contributor to expected losses is secured by a portfolio of three retail properties totaling 172,000 sf located in Big Rapids, Otsego, and Cedar Springs, MI (7.2%). As of September 2014, the portfolio reported occupancy at 99% and debt service coverage ratio (DSCR) at 1.58x, an improvement over year-end (YE) 2013 with 88% occupancy and 1.32x DSCR. There is significant near term rollover risk with leases for over 50% of the portfolio's NRA scheduled to mature in the next 12 months, the largest being Big Lots (18.5% portfolio NRA; 34% property NRA) whose lease expires in January 2016. The subject loan had matured on April 1, 2015 without repayment and is awaiting transfer to the special servicer.

RATING SENSITIVITIES

The Outlooks on classes F and G are expected to remain Stable as the classes benefit from increasing credit enhancement and continued delevering of the transaction through amortization and repayment of maturing loans. The rating for class G is capped at 'Asf' as it previously incurred interest shortfalls. Fitch will not assign or maintain 'AAAsf' or 'AAsf' ratings for notes that it believes have a high level of vulnerability to interest shortfalls or deferrals, even if permitted under the terms of the documents (see 'Criteria for Rating Caps and Limitations in Global Structured Finance Transactions', dated May 28, 2014, for more details). The distressed classes (those rated below 'B') are subject to further downgrades as losses are realized.

Fitch upgrades the following classes:

--\$12.6 million class F to 'AAAsf' from 'BBsf'; Outlook Stable;
--\$21 million class G to 'Asf' from 'Bsf'; Outlook Stable.

Fitch affirms the following classes:

--\$16.3 million class H at 'CCCsf'; RE 100%;
--\$21 million class J at 'CCsf'; RE 50%;
--\$9.1 million class K at 'Dsf'; RE 0%;
--\$0 class L at 'Dsf'; RE 0%;
--\$0 class M at 'Dsf'; RE 0%.

The class A-1, A-2, A-3, A-AB, A-4, A-1A, A-J, B, C, D and E certificates have paid in full. Fitch does not rate the class N, O, P and Q certificates. Fitch previously withdrew the ratings on the interest-only class X-C and X-P certificates.

Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 10, 2014 report, 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is available at 'www.fitchratings.com' under the following headers:

Structured Finance >> CMBS >> Criteria Reports.