NEW YORK--()--Fitch Ratings has affirmed the super senior and mezzanine classes of Bear Stearns Commercial Mortgage Securities Trust, 2006-PWR13, commercial mortgage pass-through certificates, and downgraded seven subordinate classes. A detailed list of rating actions follows at the end of this release.
The downgrade of the subordinate classes is due to greater certainty of losses associated with specially serviced loans and increased losses from performing loans with performance declines. The Negative Rating Outlooks reflect the likelihood of a future downgrade should values deteriorate further on specially serviced loans or highly leveraged loans. Approximately 52.2% of the pool has a Fitch stressed loan to value greater than 90%, including 13 of the top 15 loans (23.3% of the pool). Fitch modeled losses of 9.1% for the remaining pool; expected losses of the original pool are at 10.1%, including losses already incurred to date.
As of the December 2012 distribution date, the pool's aggregate principal balance has been reduced by approximately 11.2% to $2.58 billion from $2.91 billion at issuance. In total, there are 14 loans (8.3% of the pool) in special servicing including four loans (1.3%) that are real estate owned (REO). Realized losses to date have been $58.9 million (2%). Classes M through P have been depleted due to realized losses associated with loan dispositions and restructured loans.
The largest contributor to modeled loss secured by an industrial warehouse facility located in Phillipsburg, NJ (0.8% of the pool balance). The loan transferred to special servicing in July 2010 due to monetary default. The most recent reported occupancy was 68% with a valuation significantly below the trust debt amount.
The second largest contributor to modeled loss is Paces West (3.2% of the pool), which is also the largest specially serviced asset in the pool. This loan is secured by a 646,471 sf office complex located in Atlanta, GA. The loan transferred to special servicing in February 2010 for imminent default. The most recent servicer reported occupancy as of November 2012 was 79%. The loan is expected to be modified and returned to master servicing.
The third largest contributor to modeled loss is the First Industrial Portfolio (1.8% of the pool), a portfolio of 21 properties located in two different business parks in Georgia. Two of the original 23 properties have been released. As of the October 2012 rent roll, occupancy was 72% compared with 91.6% at issuance resulting in declining cash flow.
Fitch has downgraded the following classes as indicated:
-- $232.5 million class A-J to 'BBsf' from 'BBBsf'; Outlook Negative;
-- $65.4 million class B to 'B-sf' from 'BBsf'; Outlook Negative;
-- $29.1 million class C to 'CCCsf' from 'Bsf', RE 20%;
-- $32.7 million class F to 'CCsf' from 'CCCsf', RE 0%;
-- $32.7 million class G to 'Csf' from 'CCsf', RE 0%;
-- $29.1 million class H to 'Csf' from 'CCsf', RE 0%;
-- $10.1 million class L to 'Dsf' from 'Csf', RE 0%.
Fitch has affirmed the following classes as indicated:
-- $22.1 million class A-2 at 'AAAsf'; Outlook Stable;
-- $138 million class A-3 at 'AAAsf'; Outlook Stable;
-- $96.4 million class A-AB at 'AAAsf'; Outlook Stable;
-- $1.2 billion class A-4 at 'AAAsf'; Outlook Stable;
-- $326 million class A-1A at 'AAAsf'; Outlook Stable;
-- $290.7 million class A-M at 'AAAsf'; Outlook Stable;
-- $40 million class D at 'CCCsf', RE 0%;
-- $29.1 million class E at 'CCCsf', RE 0%;
-- $18.2 million class J at 'Csf', RE 0%;
-- $3.6 million class K at 'Csf', RE 0%.
Classes M, N and O remain at 'Dsf', RE 0% due to realized losses. Class A-1 has paid in full. Fitch does not rate class P. Fitch previously withdrew the rating on the interest-only classes X-1 and X-2.
Additional information on Fitch's amended criteria for analyzing recent vintage U.S. CMBS is available in the Dec, 18, 2012 report, 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is available at 'www.fitchratings.com' under the following headers:
Structured Finance >> CMBS >> Criteria Reports
Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
-- 'Global Structured Finance Rating Criteria' (June 6, 2012);
-- 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria (Dec. 18, 2012).
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria