OREANDA-NEWS.  Fitch Ratings has affirmed all classes of German American Capital Corp.'s COMM 2012-LC4 commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS
The affirmations are primarily due to overall stable performance of the collateral pool since Fitch's last rating action. The transaction has high retail exposure, representing 52.3% of the collateral pool. Seven of the top 15 loans (41.3% of the pool) are secured by retail properties. Currently, there are no delinquent or specially serviced loans. As of the January 2016 distribution date, the transaction's aggregate principal balance has been reduced by 6.7% to $887.1 million from $951.3 million at issuance.

Fitch has identified two loans (3.7%) as Fitch loans of concern (LOC).

The first Fitch LOC (3% of the pool) is secured by a 628,063 square foot (sf) interest in Susquehanna Valley Mall, a 744,790 sf regional mall located in Selinsgrove, PA, approximately 50 miles north of Harrisburg, PA. Sears, Taco Bell, Applebee's, and Friendly's are not part of the collateral as these tenants own their stores. As of the September 2015 rent roll, the property was 91% leased but 82% occupied. JC Penney (9.1% of net rentable area [NRA]) did not renew its lease when it expired in November 2015 and has vacated as expected. Per co-tenancy clauses, the departure of JC Penney had immediate impact on the leases of two small tenants (1% of NRA). JC Penney's vacancy has also triggered the full sweep of tenants lease payments. The borrower is actively marketing the vacated space. The remaining major tenants include Boscov's (21% of NRA; with lease expiring April 2023) and Bon-Ton (12.1% of NRA), which has extended its lease for three years till January 2017. The servicer reported third quarter 2015 (3Q15) debt service coverage ratio (DSCR) was 1.95x, compared to 1.96x at year-end 2014 (YE2014), 1.98x at YE2013, 2.0x at YE2012 and 2.15x at UW. Fitch anticipates DSCR will decrease further with the loss of JP Penney rents and the effects from the co-tenancy clauses.

The second Fitch LOC (0.7%), which is also a servicer watchlist loan, is secured by a 152-unit, Class B student housing community located in Nacogdoches, TX. The property suffered a significant occupancy decline in 2013 due to poor property management. The borrower removed the previous manager and has been actively managing the property. As a result, the occupancy rate has recovered from its lowest point and the borrower expects the property performance to improve. As of 3Q15, the property was 88% occupied, compared to 93% at YE2014, 83% at YE2013, 89% at YE2012, and 99.3% at UW. The servicer reported 3Q15 DSCR was 0.85x, compared to 0.99x at YE14, 0.91x at YE2013, 1.15x at YE2012 and 1.51x at UW. The loan remains current since Mach 2014, when it defaulted last.

The largest loan in the pool (10.4%) is secured by 541,128 square feet of a 928,667 sf two-level regional mall located in Saugus, MA, approximately 10 miles north of Boston. The collateral is anchored by Sears and Macy's, which own their stores. The largest tenants include Dick's Sporting Goods (12.7% of NRA) and Best Buy (11.1%). As of 3Q15, the property was 92% occupied, compared to 95% at YE2014, and 90% at UW. The servicer reported 3Q15 DSCR was 2.14x, compared to 2.29x at YE2014 and 1.93x at UW.

The second largest loan (8%) is secured by the leasehold interest in a 236,215 sf multi-level anchored retail center located in the Union Square area of Manhattan. The property is 100% occupied by seven tenants, including a 14-screen Regal Cinemas theater (50.3%), Best Buy (19.5%), and Nordstrom Rack (13.6%). The nearest lease expiration date is January 2017 (3.8%). The loan was assigned a stand-alone investment grade credit opinion by Fitch at issuance. The servicer reported 2Q15 DSCR was 4.9x, compared to 4.22x at YE2014 and 4.34x at UW.

RATING SENSITIVITIES
The Outlook remains Stable for all classes. Due to the stable performance, Fitch does not foresee positive or negative ratings migration until a material economic or asset-level event changes the transaction's portfolio-level metrics.

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

Fitch has affirmed the following classes as indicated:

--$63.2 million class A-2 at 'AAAsf', Outlook Stable;
--$115.6 million class A-3 at 'AAAsf', Outlook Stable;
--$416.5 million class A-4 at 'AAAsf', Outlook Stable;
--$93 million class A-M at 'AAAsf', Outlook Stable;
--Interest-Only class X-A at 'AAA', Outlook Stable;
--$44.7 million class B at 'AAsf', Outlook Stable;
--$32.9 million class C at 'Asf', Outlook Stable;
--$52.9 million class D at 'BBB-sf', Outlook Stable;
--$15.3 million class E at 'BBsf', Outlook Stable;
--$11.8 million class F at 'Bsf', Outlook Stable.

Class A-1 has paid in full. Fitch does not rate the class G and HP certificates, or the interest-only class X-B.