Fitch Affirms BSCMSI 2005-TOP18

NEW YORK--()--Fitch Ratings has affirmed 16 classes of Bear Stearns Commercial Mortgage Securities Inc. commercial mortgage pass-through certificates series 2005-TOP18. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The affirmations are due to the relatively stable performance of the pool. Fitch modeled losses of 2.9% of the remaining pool; expected losses on the original pool balance total 3.6%, including $18.7 million (1.7% of the original pool balance) in realized losses to date. Fitch has designated 19 loans (10.2% of the pool) as Fitch Loans of Concern, which includes two specially serviced assets (1.4% of the pool).

As of the November 2013 distribution date, the pool's aggregate principal balance has been reduced by 34.1% to $739.1 million from $1.12 billion at issuance. Per the servicer reporting, seven loans (15.3% of the pool) are defeased. Interest shortfalls are currently affecting classes J through P.

The largest contributor to expected losses (1.2% of the pool) is a specially-serviced 155,462 square foot (sf) office property located in Inglewood, CA. The property became real estate owned (REO) in February 2013 and is currently under contract to sell with closing expected by year end (YE) 2013. Occupancy was 19.2% as of September 2013.

The next largest contributor to expected losses (0.7% of the pool) is a full service 104-room boutique hotel and a non-contiguous parking garage located in Baltimore, MD. The property has struggled over the past few years with a YE 2011 occupancy and net operating income (NOI) debt service coverage ratio (DSCR) of 59% and 0.64x, respectively, and YE 2012 occupancy of 61% and NOI DSCR of 0.39x. However, as of June 2013 the property's cash flow covers debt service and the loan remains current.

The third largest contributor to expected losses (1.1% of the pool) is a 162,660 sf industrial property located in Chula Vista, CA (San Diego MSA). Occupancy has fluctuated in recent years due to a seasonal tenant that accounts for 24% of the leasable area from October to December. Tenant will not be renewed with a long term lease and there is no other leasing activity per Borrower. The current occupancy not including the seasonal tenant is 76%.

RATING SENSITIVITY

The ratings of the senior classes A-4 and A-4FL are expected to remain stable as credit enhancement has been increasing. Rating Outlooks on classes A-J and B are Negative as they may be subject to downgrades should loans not refinance at their expected maturity dates and realized losses be greater than Fitch's expectations. The distressed classes (those rated below 'B') may be subject to further downgrades as losses are realized.

Fitch affirms the following classes as indicated:

--$495.3 million class A-4 at 'AAAsf', Outlook Stable;

--$71.8 million class A-4FL at 'AAAsf', Outlook Stable;

--$74.3 million class A-J at 'AAAsf', Outlook Negative;

--$29.4 million class B at 'Asf', Outlook Negative;

--$8.4 million class C at 'BBBsf', Outlook Stable;

--$12.6 million class D at 'BBsf', Outlook Stable;

--$11.2 million class E at 'Bsf', Outlook Stable;

--$9.8 million class F at 'CCCsf', RE 100%;

--$9.8 million class G at 'CCsf', RE 100%;

--$8.4 million class H at 'Csf', RE 30%;

--$4.2 million class J at 'Csf', RE 0%;

--$3.8 million class K at 'Dsf', 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 O at 'Dsf', RE 0%.

The class A-1, A-2, A-3 and A-AB certificates have paid in full. Fitch does not rate the class P 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. 11, 2013 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'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 24, 2013);

--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 11, 2013).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

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

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724961

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=811654

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings
Primary Analyst:
Martin Nunnally, +1-212-908-0871
Associate Director
Fitch Ratings, 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:
Martin Nunnally, +1-212-908-0871
Associate Director
Fitch Ratings, 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