OREANDA-NEWS. Fitch Ratings has downgraded Talisman-4 Finance plc's class A, B and C notes, as follows:

{EUR30.1m class A (XS0263096389) downgraded to 'Dsf' from 'Bsf'; Recovery Estimate (RE) 100%
EUR39.4m class B (XS0263098161) downgraded to 'Dsf' from 'CCsf'; RE revised to 20% from 10%
EUR39.4m class C (XS0263098914) downgraded to 'Dsf' from 'Csf'; RE0%
EUR3.8 m class D (XS0263099722) affirmed at 'Dsf'; RE0%
EUR0m class E (XS0263100835) affirmed at 'Dsf'; RE0%
EUR0m class F (XS0263101304) affirmed at 'Dsf'; RE0%
EUR0m class G (XS0263101569) affirmed at 'Dsf'; RE0%

The transaction is a securitisation of originally eight commercial mortgage loans secured on assets located in Germany. As of the January 2015 interest payment date, only one loan (DT12) remained. This loan, which was originally secured by 12 properties, failed to repay at maturity in July 2013 and has been in special servicing since.

KEY RATING DRIVERS
The downgrade of the class A, B and C notes reflects the note event of default at maturity on 22 July 2015. The special servicer has not managed to arrange the sale of the remaining assets securing the DT12 loan in time for maturity, thus falling short of expectations, and instead undertook a discounted payoff (DPO) for six properties with an entity controlled by Summit Group (the borrower) as well as a sale of six other properties to third parties.

In a special notice published on 16 July 2015, the special servicer announced that it had entered into a loan sale agreement including a DPO on six properties. The special servicer will complete the sale of the remaining assets, in most cases at already notarised prices. Alternatively, it will sell them at lower, contractually agreed prices on 15 December 2015 to an entity controlled by the borrower.

While this represents a severe loss of principal, the DPO provides for execution of an exit to a long-running workout, and should return principal in full to the class A investors. Fitch also anticipates a modest recovery for the class B notes, as reflected in the Recovery Estimates.

RATING SENSITIVITIES
There is no prospect of changes in the ratings although the Recovery Estimates are subject to variables including sale proceeds, timing and costs.

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

DATA ADEQUACY
Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. There were no findings that were material to this analysis. Fitch has not reviewed the results of any third party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring.

Fitch did not undertake a review of the information provided about the underlying asset pool ahead of the transaction's initial closing. The subsequent performance of the transaction over the years is consistent with the agency's expectations given the operating environment and Fitch is therefore satisfied that the asset pool information relied upon for its initial rating analysis was adequately reliable.

Overall, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable.

SOURCES OF INFORMATION
The information below was used in the analysis.
-Investor report as of the July 2015 IPD