Fitch Downgrades WAMU 2005-C1; Assigns Outlooks

Fitch Ratings has downgraded and assigned Rating Outlooks to Washington Mutual's (WAMU) commercial mortgage pass-through certificates, series 2005-C1, as follows:

--$800,000 class M to 'B-' from 'B'; Outlook Negative.

In addition, Fitch has downgraded and assigned a Recovery Rating (RR) to the following class:

--$1.6 million class N to 'CCC/RR1' from 'B-'.

Fitch has also affirmed and assigned Rating Outlooks to the following classes:

--$91.8 million class A-2 at 'AAA'; Outlook Stable;

--$49.6 million class A-J at 'AAA'; Outlook Stable;

--Interest-only class X at 'AAA'; Outlook Stable;

--$8.9 million class B at 'AAA'; Outlook Stable;

--$13 million class C at 'AAA'; Outlook Stable;

--$4.1 million class D at 'AA'; Outlook Stable;

--$5.7 million class E at 'A+'; Outlook Stable;

--$4.9 million class F at 'A'; Outlook Stable;

--$5.7 million class G at 'BBB+'; Outlook Negative;

--$8.1 million class H at 'BB+'; Outlook Negative;

--$3.3 million class J at 'BB'; Outlook Negative;

--$2.4 million class K at 'BB-'; Outlook Negative;

--$2.4 million class L at 'B+'; Outlook Negative.

Class A-1 is paid in full.

The downgrades are due to potential losses and interest shortfalls associated with the transfer of the largest loan in the transaction to special servicing. Rating Outlooks reflect the likely direction of any rating changes over the next one to two years. The Negative Rating Outlooks reflect the increase in Fitch Loans of Concern.

As of the May 2009 distribution date, the pool's collateral balance has paid down 68.8% to $202.3 million from $649.5 million at issuance. Ninety-five loans remain in the pool. The accelerated pay down demonstrated by this transaction is due to the pool's composition of well-seasoned loans. Sixty loans (77.8%) have six or more years of seasoning.

Fitch has identified 17 Loans of Concern (22.4%), including one specially serviced loan (5.2%). The loan in special servicing, which is the largest loan remaining in the pool, is secured by a 106,975 square foot (sf) retail plaza located in Willow Grove, PA. The retail property lost a major tenant, Circuit City, in early 2009. The loan is pending transfer back to the master servicer. The current reported occupancy is 72%, which is down from 100% at year-end (YE) 2007. The loan is scheduled to mature in 2014.

The second largest Loan of Concern (3.4%) is collateralized by 80,000 sf of retail space located in Middletown, NY. The property is now 56% occupied as Linens 'n Things closed their store leaving Best Buy as the remaining tenant. The loan is scheduled to mature in December 2010.

The second largest loan remaining in the pool (4.5%) is secured by a 62,835 sf office building located in Manhattan Beach, CA. The servicer reported debt service coverage ratio (DSCR) as of June 2008 was 1.84 times (x). The loan is scheduled to mature in January 2011.

Five loans (5.7%) are scheduled to mature in 2009 with a servicer reported weighted average DSCR of 1.66x with a weighted average coupon of 7.73%. Seventeen loans (30.8%) are scheduled to mature in 2010 with a servicer reported weighted average DSCR of 1.94x with a weighted average coupon of 7.69%.

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