OREANDA-NEWS. Fitch Ratings has upgraded six and affirmed 14 classes of Wachovia Bank Commercial Mortgage Trust 2006-C25 (WBCMT 2006-C25) commercial mortgage pass-through certificates. A full list of rating actions follows at the end of this ratings action commentary.

KEY RATING DRIVERS
The affirmations and upgrades reflect the significant paydown of the classes as well as better than expected recoveries on specially serviced assets. Fitch expects significant additional near- term paydown of the classes as over 90% of the underlying portfolio is scheduled to mature or reach its anticipated repayment date (ARD) by June 2016.

Fitch modeled losses of 7.3% of the remaining pool; expected losses on the original pool balance total 9.3%, including $150.3 million (5.3% of the original pool balance) in realized losses to date. Fitch has designated 32 loans (25.4%) as Fitch Loans of Concern, which includes four specially serviced assets (3.8%).

As of the November 2015 distribution date, the pool's aggregate principal balance has been reduced by 44.2% to $1.6 billion from $2.86 billion at issuance. Per the servicer reporting, nine loans (17.4% of the pool) are defeased. Interest shortfalls are currently affecting classes H through S.

The largest contributor to expected losses remains the Hercules Plaza loan (4.1% of the pool), which is secured by a 517,000 sf office property located in Wilmington, DE. As of the June 2015 rent roll, the property was 75% leased with significant lease roll of approximately 26% of net rentable area (NRA) over the next year, including the largest tenant, which is not expected to remain at the property. The loan was modified by the special servicer in 2014, at which time the loan was extended two years through 2018. Fitch will continue to monitor the occupancy status of the property.

The next largest contributor to expected losses remains the Piedmont Center Buildings 9-12 loan (4.1%), which is secured by four multi-tenanted office properties located in the Buckhead sub-market of Atlanta, GA. As of the June 2015 rent roll, occupancy was reported at 76% with less than 5% lease rollover through 2016. While recent sub-market metrics indicate the market remains relatively weak, the property has shown some improvement over the last year. The servicer-reported YE 2014 debt service coverage ratio (DSCR) was 1.15x compared with 1.08x at YE 2013. Further, the YTD June 2015 servicer reported DSCR was 1.38x.

The third largest contributor to expected losses is the real estate owned (REO) Hampton Inn - Las Vegas, NV (1.6%), a 322-room limited-service hotel located in Las Vegas, NV, approximately 1/2 mile west of The Strip. Foreclosure occurred in 2010. The special servicer completed an estimated $1 million in renovations in 2014. The servicer continues to work on stabilizing the property with most recently reported RevPAR 30% higher than two years prior.

RATING SENSITIVITIES
Rating Outlooks on classes A-4 through D are Stable due to increasing credit enhancement and continued expected paydown over the next year. Upgrades are anticipated to be limited, as loan repayments from maturing loans are expected to further raise adverse selection risk to an increasingly concentrated pool.

Distressed classes may be subject to downgrade as further losses are realized.

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

Fitch has upgraded the following classes and assigned or revised Rating Outlooks and REs as indicated:

--$218.3 million class A-J to 'BBBsf' from 'BBsf'; Outlook Stable;
--$10.7 million class B to 'BBB-sf' from 'BBsf'; Outlook Stable;
--$35.8 million class C to 'BBsf' from 'Bsf'; Outlook to Stable from Negative;
--$32.2 million class D to 'Bsf' from 'CCCsf'; Outlook Stable assigned;
--$32.2 million class F to 'CCCsf' from 'CCsf'; RE 15%;
--$32.2 million class G to 'CCsf' from 'Csf'; RE 0%.

Fitch has affirmed the following classes as indicated:

--$114 million class A-4 at 'AAAsf'; Outlook Stable;
--$500 million class A-5 at 'AAAsf'; Outlook Stable;
--$274.6 million class A-1A at 'AAAsf'; Outlook Stable;
--$286.2 million class A-M at 'AAAsf'; Outlook Stable;
--$17.9 million class E at 'CCCsf'; RE 100%;
--$32.2 million class H at 'Csf'; RE 0%;
--$10.7 million class J at 'Dsf'; RE 0%;
--$0 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%;
--$0 class P at 'Dsf'; RE 0%;
--$0 class Q at 'Dsf'; RE 0%.

The class A-1, A-2, A-3, A-PB1 and A-PB2 certificates have paid in full. Fitch previously withdrew the rating on the interest-only class IO certificates. Fitch does not rate the class S certificates.