NEW YORK--(BUSINESS WIRE)--Fitch Ratings has downgraded one distressed class and affirmed 18 classes of J.P. Morgan Chase Commercial Mortgage Securities Trust (JPMCC) commercial mortgage pass-through certificates series 2007-CIBC20. A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
Fitch modeled losses of 8.5% of the remaining pool; expected losses on the original pool balance total 10.5%, including $98.2 million (3.9% of the original pool balance) in realized losses to date. Fitch has designated 39 loans (27.1%) as Fitch Loans of Concern, which includes seven specially serviced assets (7.5%).
The downgrade is a result of principal losses incurred due to recent loan liquidations. The affirmations are due to increasing credit enhancement and continued paydown. As of the January 2014 distribution date, the pool's aggregate principal balance has been reduced by 21.6% to $1.99 billion from $2.54 billion at issuance. No loans are defeased. Interest shortfalls are currently affecting classes M through NR.
The largest contributor to expected losses is the Colony Portfolio VII loan (5.4% of the pool), which is secured by five industrial properties and 4 office properties located in MO, GA, IL, KS, CA, CO. The loan was specially serviced at the time of Fitch's last rating action in February 2013 due to a maturity default. The loan was modified in November 2012 to a single note with three component notes/tranches and its maturity extended to Oct. 1, 2014 from Oct. 1, 2012 for Note A, and from Oct. 1, 2013 to Oct. 1, 2014 for Note B; Note C remains a maturity of Oct. 1, 2014. The portfolio has suffered declines in occupancy and base rent since 2011. As of September 2013 the portfolio is 89.3% occupied down from 96.4% at issuance. The property has experienced a 25% decline in net operating income (NOI) as of year-end (YE) 2012 compared with YE 2011.
The next largest contributor to expected losses is the North Hills Mall loan (7.1%), which is secured by a 577,383 sf regional lifestyle center located in Raleigh, NC within the Raleigh-Durham-Chapel Hill MSA, referred to as 'The Research Triangle'. The property is anchored by J.C. Penney, Regal Entertainment, REI, Gold's Gym, and a non-collateral Target. In addition to the retail component, there is a 101,423 sf office component. A 200-room Renaissance Hotel that is not party of the collateral opened in 2008 at the eastern end of the center. Property performance has struggled since issuance, but YE 2012 DSCR has improved to 1.18x from 1.06x YE 2011. As of As of October 2013, the mall is 96.3% occupied or 96.9% including the office component. There are approximately 11% of the leases rolling in 2014 and 18% in 2015. Per REIS as of 3Q 2013, the Raleigh-Durham retail market had a vacancy rate of 8.8% with asking rents at $19.41.
The third largest contributor to expected losses is the specially-serviced STF Portfolio loan (2.1%), originally secured by a portfolio of 19 properties totaling 1.2 million sf located in TX, and NM. The loan was transferred to special servicing in August 2010 for payment default. Per the special servicer, 18 of the 19 properties have been sold. The only remaining property is 2660 Airport Road located in San Theresa, NM. As of November 2013, the property is 61.3% occupied by Anamarc Enterprises through April 2015. The special servicer is currently reevaluating their marketing strategy and has ordered a new appraisal.
Rating Outlooks on classes A-3 through A-MFX remain Stable, and class B is revised to Stable from Negative due to increasing credit enhancement and continued paydown. Although credit enhancement is increasing, Fitch is closely monitoring several Loans of Concern including single-tenant retail properties.
Fitch downgrades the following class:
--$315,196 class K to 'Dsf' from 'Csf', RE 0%.
Fitch affirms the following classes:
--$39.1 million class A-3 at 'AAAsf', Outlook Stable;
--$991.7 million class A-4 at 'AAAsf', Outlook Stable;
--$55.9 million class A-SB at 'AAAsf', Outlook Stable;
--$278.3 million class A-1A at 'AAAsf', Outlook Stable;
--$219.3 million class A-M at 'Asf', Outlook Stable;
--$35 million class A-MFX at 'Asf', Outlook Stable;
--$152.6 million class A-J at 'Bsf', Outlook to Stable from Negative;
--$31.8 million class B at 'CCCsf', RE 100%;
--$25.4 million class C at 'CCCsf', RE 100%;
--$28.6 million class D at 'CCsf', RE 10%;
--$22.3 million class E at 'CCsf', RE 0%;
--$22.3 million class F at 'CCsf', RE 0%;
--$25.4 million class G at 'CCsf', RE 0%;
--$35 million class H at 'Csf', RE 0%;
--$31.8 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%.
The class A-1 and A-2 certificates have paid in full. Fitch does not rate the class P, Q, T and NR 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. 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
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria