NEW YORK--()--Fitch Ratings has downgraded one class and affirmed 16 classes of Bear Stearns Commercial Mortgage Securities Trust (BSCMSI) commercial mortgage pass-through certificates series 2005-PWR8. A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The downgrade to class K is the result of the class incurring a principal loss.
The affirmations of the remaining Fitch-rated classes reflect sufficient credit enhancement after consideration for expected losses. Fitch modeled losses of 5.1% of the remaining pool; expected losses on the original pool balance total 6.3%, including losses already incurred. The pool has experienced $38.7 million (2.2% of the original pool balance) in realized losses to date. Fitch has designated 40 loans (15.2%) as Fitch Loans of Concern, which includes seven specially serviced assets (4.8%).
The rating outlook of class C has been revised to Stable from Negative due to Fitch's lower modeled loss estimate. The Stable Outlooks on classes A-AB through B are due to stable performance and indicate that rating actions to those classes are not expected.
The Negative Outlook on class D is attributable to the class's position in the capital structure and its high susceptibility to downgrades should pool performance or recovery prospects deteriorate.
As of the February 2013 distribution date, the pool's aggregate principal balance has been reduced by 19.8% to $1.42 billion from $1.77 billion at issuance. Per the servicer reporting, 10 loans (11.9% of the pool) have defeased since issuance. Interest shortfalls are currently affecting classes G through Q.
The largest contributor to expected losses is the real estate owned (REO) Roseville Corporate Center (1.4% of the pool), an approximately 230,000-sf office property located between Minneapolis and St. Paul, MN. The asset was foreclosed upon on Dec. 30, 2011, and following a required six-month right-of-redemption period, the property has been on the market for sale.
The next largest contributor to expected losses is the REO Union Centre Pavilion (1%), an approximately 146,000-square foot (sf) anchored retail center built in 2001, located in a northern suburb of Cincinnati, OH. The asset transferred to special servicing in February 2009 for imminent default and became REO in January 2012. Based on recent valuations, Fitch expects significant losses upon disposition.
The third largest contributor to expected losses is the REO La Borgata at Serrano (0.9%), a 59,000-sf mixed use (office/retail) property built in 2003, located about 30 miles east of Sacramento, CA. The loan transferred to special servicing on March 9, 2012 for imminent default due to high rollover and resulting low occupancy. The property became REO in September 2012 and the special servicer is working to stabilize the asset before marketing for sale.
Fitch downgrades the following classes as indicated:
--$3.3 million class K to 'Dsf' from 'Csf', RE 0%.
Fitch affirms the following classes and assigns or revises Rating Outlooks and Recovery Estimates (REs) as indicated:
--$30.5 million class A-AB at 'AAAsf'; Outlook Stable;
--$1 billion class A-4 at 'AAAsf'; Outlook Stable;
--$50 million class A-4FL at 'AAAsf'; Outlook Stable;
--$150 million class A-J at 'Asf'; Outlook Stable;
--$37.5 million class B at 'BBB-sf'; Outlook Stable;
--$17.7 million class C at 'BBsf'; Outlook to Stable from Negative;
--$26.5 million class D at 'Bsf'; Outlook Negative;
--$17.7 million class E at 'CCCsf'; RE 100%;
--$19.9 million class F at 'CCsf'; RE 10%.
--$15.4 million class G at 'Csf'; RE 0%;
--$17.7 million class H at 'Csf'; RE 0%;
--$8.8 million class J at 'Csf'; RE 0%;
--$0 class L at 'Dsf'; RE 0%;
--$0 class M at 'Dsf'; RE 0%;
--$0 class N at 'Dsf'; RE 0%;
--$0 class P at 'Dsf'; RE 0%.
The class A-1, A-2 and A-3 certificates have paid in full. Fitch does not rate the class Q certificates. 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