Fitch Downgrades 10 Classes of JPMCC 2007-LDP10

NEW YORK--()--Fitch Ratings has downgraded 10 classes and affirmed 22 classes of J.P. Morgan Chase Commercial Mortgage Securities Trust (JPMCC) commercial mortgage pass-through certificates series 2007-LDP10 due to increased loss expectations on the specially serviced loans and further deterioration of loan performance. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

Fitch modeled losses of 20.4% of the remaining pool; expected losses on the original pool balance total 20.1%, including 2.6% to date. Fitch has designated 93 loans (49.8%) as Fitch Loans of Concern, which includes 33 specially serviced assets (21.9%).

As of the December 2012 distribution date, the pool's aggregate principal balance has been reduced by 14.7% to $4.55 billion from $5.33 billion at issuance. No loans have defeased since issuance. Interest shortfalls are currently affecting classes A-JS through NR.

The largest contributor to expected losses is the specially-serviced One Skyline Tower loan (4.5% of the pool), which is secured by eight office buildings in Falls Church, VA. This loan transferred to special servicing in March 2012 for imminent default. The sponsor, Vornado, cited the Base Realignment and Closure statute (BRAC), as contributing to recent and upcoming vacancies at the properties. In addition, the sponsor has indicated that there may be significant capital required to re-tenant the properties. The pari passu loan is under a forbearance agreement as of November 2012.

The next largest contributor to expected losses is the specially-serviced StratREAL Industrial Portfolio II loan (3.3%), which is secured by a portfolio of 10 industrial properties located in Tennessee, Ohio, and California. During 2010 and 2011, the portfolio lost several major tenants due to tenant lease expiries and termination options. The loan was transferred to special servicing in December 2012 for imminent default. The portfolio's combined occupancy is 67%; as such, the properties are not generating enough cash flow to support the debt service.

The third largest contributor to expected losses is the specially-serviced Solana loan (3.1%), which is secured by an office complex located in Westlake, TX. The pari passu loan was transferred to special servicing in March 2009 for imminent default and has since been modified. The reported occupancy is approximately 67%. The latest reported appraisal from May 2012 indicates a value significantly below the loan amount.

Fitch downgrades the following classes as indicated, and has assigned or revised Recovery Estimates (REs):

--$359 million class A-M to 'Bsf' from 'BBBsf', Outlook Negative;

--$174.1 million class A-MS to 'Bsf' from 'BBBsf', Outlook Negative;

--$71.8 million class B to 'CCsf' from 'CCCsf', RE 0%;

--$34.8 million class B-S to 'CCsf' from 'CCCsf', RE 0%;

--$26.9 million class C to 'CCsf' from 'CCCsf', RE 0%;

--$13.1 million class C-S to 'CCsf' from 'CCCsf', RE 0%;

--$49.4 million class D to 'CCsf' from 'CCCsf', RE 0%;

--$23.9 million class D-S to 'CCsf' from 'CCCsf', RE 0%;

--$44.9 million class F to 'Csf' from 'CCsf', RE 0%%;

--$21.8 million class F-S to 'Csf' from 'CCsf', RE 0%%;

Fitch affirms the following classes and assigns or revises Rating Outlooks as indicated:

--$231.7 million class A-2 at 'AAAsf', Outlook to Negative from Stable;

--$443.7 million class A-2S at 'AAAsf', Outlook to Negative from Stable;

--$83.7 million class A-2SFL at 'AAAsf', Outlook to Negative from Stable;

--$1.7 billion class A-3 at 'AAAsf', Outlook to Negative from Stable;

--$179.9 million class A-3S at 'AAAsf', Outlook to Negative from Stable;

--$421.4 million class A-1A at 'AAAsf', Outlook to Negative from Stable;

--$12.9 million class A-2SFX at 'AAAsf', Outlook to Negative from Stable.

Fitch affirms the following classes as indicated:

--$200.7 million class A-J at 'CCCsf', RE 0%;

--$145.8 million class A-JS at 'CCCsf', RE 0%;

--$100 million class A-JFL at 'CCCsf', RE 0%;

--$40.4 million class E at 'CCsf', RE 0%;

--$19.6 million class E-S at 'CCsf', RE 0%;

--$44.9 million class G at 'Csf', RE 0%;

--$21.8 million class G-S at 'Csf', RE 0%;

--$40.4 million class H at 'Csf', RE 0%;

--$19.6 million class H-S at 'Csf', RE 0%;

The class A-1 and A-1S certificates have paid in full. Classes J, K, L, M, N, and P remain at 'Dsf'; RE 0% due to realized losses. Fitch does not rate the class NR certificates. Fitch previously withdrew the rating on the interest-only class X certificates.

Additional information on Fitch's criteria for analyzing U.S. CMBS transactions 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:

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=696969

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679923

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Contacts

Fitch Ratings
Primary Analyst
Christopher Bushart, +1-212-908-0606
Senior Director
Fitch, Inc.
One State Street Plaza
New York, NY 10004
or
Committee Chairperson
Mary MacNeill, +1-212-908-0785
Managing Director
or
Media Relations:
Sandro Scenga, New York, +1-212-908-0278
sandro.scenga@fitchratings.com

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Contacts

Fitch Ratings
Primary Analyst
Christopher Bushart, +1-212-908-0606
Senior Director
Fitch, Inc.
One State Street Plaza
New York, NY 10004
or
Committee Chairperson
Mary MacNeill, +1-212-908-0785
Managing Director
or
Media Relations:
Sandro Scenga, New York, +1-212-908-0278
sandro.scenga@fitchratings.com