Fitch Affirms JPMCFC 1999-C7; Assigns Outlooks & LS Ratings

NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed and assigned Rating Outlooks and Loss Severity (LS) ratings to J.P. Morgan Commercial Finance Corp.'s (JPMCFC) commercial mortgage pass-through certificates, series 1999-C7. A detailed list of rating actions follows the end of the press release.

The affirmations are the result of sufficient credit enhancement to the remaining Fitch rated classes following Fitch's prospective review of potential stressed and expected losses associated with specially serviced assets. Fitch expects losses of 9.9%, or $2.5 million from loans in special servicing and loans that cannot refinance at maturity based on Fitch's refinance. These losses will be absorbed by the unrated class NR.

As of the April 2010 distribution date, the pool's certificate balance has paid down 96.9% to $24.7 million from $801.4 million at issuance. Of the remaining 20 loans, none have defeased.

There are two specially serviced loans in the pool (7.2%); one is non-performing matured, and the other is current.

The largest specially serviced asset (14.2%) is a 114 unit limited service hotel located in Coon Rapids, MN, a north Minneapolis suburb. The loan transferred in September 2008 due to maturity default. The borrower was making monthly payments past maturity but is now due for March 2009 and the special servicer is working with the borrower to cure the default.

The other specially serviced asset (4.1%) is a 39,891 sf medical office property in Omaha, NE. The loan transferred to special servicing in May 2009 after the borrower requested relief. As of October 2009, the property was 55% occupied with a 0.75 times (x) NOI (net operating income) DSCR (debt-service coverage ratio).

Fitch stressed the cash flow of the remaining non defeased loans by applying a 10% reduction to 2008 fiscal year end net operating income and applying an adjusted market cap rate between 7.5% and 10% to determine value.

Similar to Fitch's prospective analysis of recent vintage CMBS, each loan also underwent a refinance test by applying an 8% interest rate and 30-year amortization schedule based on the stressed cash flow. Loans that could refinance to a DSCR of 1.25x or higher were considered to payoff at maturity. Of the non-defeased or non-specially serviced loans, one loan (5% of the pool) incurred a loss when compared to Fitch's stressed value.

Fitch has affirmed, assigned Outlooks and LS ratings to the following classes as indicated:

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

--$10.4 million class G at 'BB/LS5'; Outlook Positive;

--$4 million class H at 'BB-/LS5'; Outlook Stable.

Fitch does not rate the $10.2 million NR class. Classes A-1, A-2, B, C, D, E, and F have paid in full.

Additional information on Fitch's amended criteria for analyzing recent vintage U.S. CMBS is available in the July 7, 2009 report, 'Surveillance Methodology for Recent Vintage U.S. CMBS,' which is available at www.fitchratings.com under the following headers:

Structured Finance >> CMBS >> Criteria Reports

Additional information is available at www.fitchratings.com.

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