NEW YORK--()--Fitch Ratings has downgraded four classes and affirmed 16 classes of JP Morgan Chase Commercial Mortgage Securities Corp. Series 2005-LDP1 (JPMCC 2005-LDP1) commercial mortgage pass-through certificates due to an increase in Fitch expected losses on the pool. A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
Fitch modeled losses of 6.2% of the remaining pool; expected losses on the original pool balance total 5.5%, including losses already incurred. The pool has experienced $57.9 million (2% of the original pool balance) in realized losses to date. Fitch has designated 33 loans (17.1%) as Fitch Loans of Concern, which includes eight specially serviced assets (3.9%).
As of the February 2013 distribution date, the pool's aggregate principal balance has been reduced by 43.6% to $1.62 billion from $2.88 billion at issuance. Per the servicer reporting, 15 loans (7.6% of the pool) are defeased. Interest shortfalls are currently affecting classes J through NR.
The largest contributor to expected losses is the specially-serviced Independence Plaza loan (1.2% of the pool), which is secured by a 252,000 sf retail shopping center located in Hamilton Township, NJ. The property lost its grocery anchor to bankruptcy in 2011. Further, T.J. Maxx vacated at its lease maturity in January 2013. The loan was transferred to special servicing in March 2010 due to missed debt service payments; a foreclosure action was commenced in October 2010 and is still ongoing.
The next largest contributor to expected losses is the Preston Center Pavilion & Square loan (2.5%), which is secured by a 233,000 sf retail center located in Dallas, TX. While the Dec. 31, 2012 rent roll reported occupancy of 95%; it was expected to drop to at least 74% in the first half of 2013 significantly impacting property cash flow. As part of a lease renewal, the largest tenant is expected to downsize its space by 19,000 sf while the third largest tenant (31,000 sf) vacated its space at lease expiration in January 2013.
The ratings of the investment grade classes are expected to remain stable, although value declines and/or prolonged workouts on the specially serviced loans may lead to further downgrades. The distressed classes (those rated below 'B') are expected to be subject to further downgrades as losses are realized. The 'B' rated class, may be subject to further rating actions should realized losses be greater or less than Fitch's expectations.
Fitch downgrades the following classes and assigns or revises Rating Outlooks as indicated:
--$54 million class D to 'BBBsf' from 'Asf'; Outlook to Stable from
--$28.8 million class E to 'BBsf' from 'BBB-sf'; Outlook to Stable from Negative;
--$32.4 million class H to 'CCsf' from 'CCCsf'; RE 0%;
--$10.8 million class J to 'Csf' from 'CCsf'; RE 0%.
Fitch affirms the following classes and assigns REs as indicated:
--$28.8 million class G at 'CCCsf'; RE 30%.
Fitch affirms the following classes as indicated:
--$234.9 million class A-1A at 'AAAsf', Outlook Stable;
--$76 million class A-2 at 'AAAsf', Outlook Stable;
--$157.5 million class A-3 at 'AAAsf', Outlook Stable;
--$601.5 million class A-4 at 'AAAsf', Outlook Stable;
--$36 million class A-SB at 'AAAsf', Outlook Stable;
--$94.3 million class A-J at 'AAAsf', Outlook Stable;
--$100 million class A-JFL at 'AAAsf', Outlook Stable;
--$68.4 million class B at 'AAsf', Outlook Stable;
--$25.2 million class C at 'Asf', Outlook Stable;
--$46.8 million class F at 'Bsf', Outlook Negative;
--$14.4 million class K at 'Csf', RE 0%;
--$10.8 million class L at 'Csf', RE 0%;
--$3.3 million class M at 'Dsf', RE 0%;
--$0 class N at 'Dsf', RE 0%;
--$0 class P at 'Dsf', RE 0%.
Fitch previously withdrew the ratings on the interest-only class X-1 and X-2 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
Global Structured Finance Rating Criteria
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria