OREANDA-NEWS. Fitch Ratings has affirmed Cornerstone Titan 2007-1 plc's notes, as follows:

EUR21.4class A2 (XS0288055600) affirmed at 'Csf'; Recovery Estimate (RE) revised to RE0% from 90%
EUR39.2m class B (XS0288056673) affirmed at 'Dsf'; RE0%
EUR0m class C (XS0288057218) affirmed at 'Dsf'; RE0%
EUR0m class D (XS0288057648) affirmed at 'Dsf'; RE0%
EUR0m class E (XS0288058885) affirmed at 'Dsf'; RE0%
EUR0m class F (XS0288059420) affirmed at 'Dsf'; RE0%
EUR0m class G (XS0288060196) affirmed at 'Dsf'; RE0%

Cornerstone Titan 2007-1 plc is a CMBS transaction secured by three loans backed by commercial real estate assets in Germany and Switzerland.

KEY RATING DRIVERS
The affirmation reflects the continued weak performance of the remaining loans, derived to a large extent from the weak recovery prospects of the underlying collateral. The downward revision of the RE on the class A2 notes is primarily due to the litigation against the issuer brought by the class X noteholder.

According to a notice on 9 October 2015, Credit Suisse Asset Management (CSAM) believes that it has been underpaid class X payments because of alleged calculation errors (specifically the exclusion of default interest). Should the courts find in favour of CSAM, it will likely be entitled to accrued interest as well, at a rate also subject to doubt.

Based on Fitch's estimates, a legal award could account for all prospective recoveries - particularly as collateral liquidation has progressed in the past 12 months. Since the last rating action, four loans have been resolved with mixed results. Two loans repaid in full, while the other two suffered losses, broadly in line with Fitch's expectations.

These distributions have already been made to investors, and only three loans remain. The bulk of the EUR16m of recoveries projected by Fitch is expected to come from the German Retail 2 loan, backed by 10 properties. While Fitch has little visibility as to the likelihood and consequence of the claim being upheld, we assume that the plaintiff - an affiliate of the originator - would only have taken legal action and risked its reputation in the eyes of investors if it stood a strong chance of winning a material sum.

RATING SENSITIVITIES
Any loss suffered on the class A2 notes will result in their downgrade to 'Dsf' and subsequent withdrawal.

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.
- Asset reporting provided by Capita Asset Services as at 30 October 2015
- Transaction reporting provided by US Bank as at 23 October 2015