Fitch Affirms Bear Stearns 2006-PWR13 Super Sr & Mezzanine 'AAA' Classes; Downgrades 3 Sub Classes

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 three subordinate classes. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

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. Excluding specially serviced loans, approximately 44% of the pool has a Fitch stressed loan to value greater than 90%, including nine of the top 15 loans (16.3% of the pool). Fitch modeled losses of 9.6% for the remaining pool; expected losses of the original pool are at 10.4%, including losses already incurred to date.

As of the November 2013 distribution date, the pool's aggregate principal balance has been reduced by approximately 19.9% to $2.33 billion from $2.91 billion at issuance. In total, there are 10 loans (4.5% of the pool) in special servicing including four loans (1.3%) that are real estate owned (REO). Realized losses to date have been $76.8 million (2.6% of the pool's original balance). Classes K through P have been depleted due to realized losses associated with loan dispositions and restructured loans and realized losses have reached class J as of the November 2013 distribution.

RATING SENSITIVITIES

The Negative Outlook on class A-J reflects the likelihood of deterioration of credit enhancement due to higher than modeled losses on disposition of defaulted assets, modified or highly levered loans remaining in the pool.

The largest contributor to modeled loss is secured by an industrial warehouse facility located in Phillipsburg, NJ (0.9% of the pool balance). The loan transferred to special servicing in July 2010 due to monetary default and has a receiver in place. The most recent reported occupancy was 48% with a valuation significantly below the trust debt amount.

The second largest contributor to modeled loss is the First Industrial Portfolio (2% 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 reported June2013 rent roll, occupancy was 71% compared with 91.6% at issuance resulting in declining cash flow.

The third largest contributor to modeled loss is a specially serviced loan secured by a neighborhood retail center (0.8% of the pool) located in Sparks, NV outside of Reno. The property lost Target in 2010 and is currently 36.4% occupied. A receiver is in place and the former Target space remains vacant.

Fitch has downgraded the following classes as indicated:

--$65.4 million class B to 'CCCsf' from 'B-sf', RE 70%;

--$29.1 million class E to 'CCsf' from 'CCCsf', RE 0%;

--$18.2 million class J to 'Dsf' from 'Csf', RE 0%;

Fitch has affirmed the following classes as indicated:

--$32.7 million class A-AB at 'AAAsf'; Outlook Stable;

--$1.2 billion class A-4 at 'AAAsf'; Outlook Stable;

--$315.1 million class A-1A at 'AAAsf'; Outlook Stable;

--$290.7 million class A-M at 'AAAsf'; Outlook Stable;

--$232.5 million class A-J at 'BBsf'; Outlook Negative;

--$29.1 million class C at 'CCCsf', RE 0%;

--$40 million class D at 'CCCsf', RE 0%;

--$32.7 million class F at 'CCsf', RE 0%;

--$32.7 million class G at 'Csf', RE 0%;

--$29.1 million class H at 'Csf', RE 0%.

Classes K, L, M, N and O remain at 'Dsf', RE 0% due to realized losses. Classes A-1, A-2 and A-3 have paid in full. Fitch does not rate the fully depleted class P. Fitch previously withdrew the rating on the interest-only classes X-1 and X-2.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

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

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

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

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=811813

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Contacts

Fitch Ratings
Primary Analyst
Jeffrey Diliberto, +1-212-908-9173
Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Committee Chairperson
Mary McNeill, +1-212-908-0785
Managing Director
or
Media Relations
Sendhil Selvaraj, +44 (0) 207 682 7218
sendhil.selvaraj@fitchratings.com

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Contacts

Fitch Ratings
Primary Analyst
Jeffrey Diliberto, +1-212-908-9173
Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Committee Chairperson
Mary McNeill, +1-212-908-0785
Managing Director
or
Media Relations
Sendhil Selvaraj, +44 (0) 207 682 7218
sendhil.selvaraj@fitchratings.com