OREANDA-NEWS. December 23, 2015. Fitch Ratings has upgraded one and affirmed eight classes of Sovereign Commercial Mortgage Securities Trust commercial mortgage pass-through certificates series 2007-C1. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS
The upgrade of class D is due to increased credit enhancement as a result of continued principal paydown and overall stable pool performance since Fitch's last rating action. The upgrade is limited to 'BBsf' due to the highly concentrated nature of the transaction and the growing risk of adverse selection. In addition, the loans in this transaction do not have the same features as typical commercial mortgage conduit loans originated for securitization. The loans lack some of the structural features and reporting requirements often seen in CMBS transactions.

Currently there are 21 loans remaining in the pool, 89% of which are on the servicer watchlist due to lease rollover or the borrowers' non-compliance of financial reporting.

Fitch modeled losses of 21% of the remaining pool; expected losses on the original pool balance total 3.2%, including \\$25 million (2.5% of the pool) in realized losses to date. Fitch has identified 18 loans (93.8%) as Fitch loans of concern, including one special serviced loan (4.9%).

As of the November 2015 distribution date, the pool's aggregate balance has been reduced by 96.3% to \\$37.3 million from \\$1.0 billion at issuance. Since the last review, the pool balance has been reduced by \\$16.4 million (30.6%). Interest shortfalls of \\$0.8 million are currently affecting classes G through N.

The largest loan in the pool (32.1%) is secured by a 106,981 square foot (sf) office property located in Dublin, OH. The loan transferred to special servicing in January 2014 due to maturity default. The borrower was unable to refinance the loan at its 2013 maturity due to concerns from prospective buyers on the near term lease expiration of the sole tenant. A loan modification was subsequently executed to extend the loan maturity to April 2016. The property is 100% leased by Pacer Global Logistics until March 2016, and the space serves as the tenant's global headquarters. The company was acquired by XPO Logistics in 2014. The borrower is in negotiations with the tenant which has indicated that they will downsize and therefore do not need the entire space at the property.

The one specially serviced loan in the pool (4.9%) is collateralized by a four story walk-up multifamily property in Brooklyn, NY. The property contains 32 rent stabilized units. The loan transferred to special servicing in 2012 due to a pending maturity default. A foreclosure complaint was filed in January 2013 and was signed in by the court in February 2014. A receiver has been in place since November 2014. The Environmental Phase II investigation confirmed the presence of contamination from an offsite dry cleaner, which has been razed. The foreclosure sale has been postponed to February 2016. The appraisal value of the property as of June 2015 is approximately \\$6.2 million (after taking the consideration of the estimated costs of remediation). Fitch expects minimal losses on this loan since the asset value is significantly higher than the outstanding debt.

RATING SENSITIVITIES
As a result of the limited financial reporting, Fitch applied additional stresses to operating income and capitalization rates. The rating on class D is expected to remain stable as it incorporates these additional stressed assumptions; however, is unlikely to be upgraded.

The distressed classes (rated below 'B') may be subject to further rating actions as losses are realized.

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

Fitch has upgraded the following class as indicated:

--\\$17.9 million class D to 'BBsf' from 'CCCsf'; Outlook Stable.

Fitch has affirmed the following classes as indicated:

--\\$10.1 million class E at 'CCsf; RE 90%;
--\\$7.6 million class F at 'Csf'; RE 0%;
--\\$1.6 million class G at 'Dsf'; RE 0%;
--\\$0 class H at 'Dsf'; RE 0%;
--\\$0 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%.

The class A-1, A-2, A1-A, A-J, B and C certificates have paid in full. Fitch does not rate the class N certificates. Fitch previously withdrew the rating on the interest-only class X certificates.