Fitch Affirms JPMCC 2003-PM1

NEW YORK--()--Fitch Ratings has affirmed all classes of J.P. Morgan Chase Commercial Mortgage Securities Corp. (JPMCC) commercial mortgage pass-through certificates series 2003-PM1. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

Fitch modeled losses of 49.4% of the remaining pool; expected losses on the original pool balance total 7.7%, including $34.6 million (3% of the original pool balance) in realized losses to date. The pool is concentrated with only 21 loans remaining, of which Fitch has designated four loans (50%) as Fitch Loans of Concern; all are specially serviced assets.

As of the February 2014 distribution date, the pool's aggregate principal balance has been reduced by 90.6% to $109.1 million from $1.16 billion at issuance and by 83.6% from $666.8MM at the last rating action. Per the servicer reporting, five loans (16.7% of the pool) are defeased. Interest shortfalls are currently affecting classes E through NR, primarily due to the lack interest payments in connection with the Palm Beach Mall loan.

The largest contributor to expected losses is the specially-serviced Palm Beach Mall loan (40% of the pool). The special servicer, ORIX, continues to pursue litigation with the loan sponsor, Simon Property Group, in efforts to maximize the recovery. The property was sold in 2011 after becoming REO in 2010; proceeds of the sale ($21.8 million) were used to repay advances, fund a reserve for litigation, and pay down a portion of the loan balance ($5.6 million). While a successful outcome of the litigation may result in some principal recovery on the loan, Fitch modeled a full loss of $43.6 million due to uncertainty surrounding the final outcome of the litigation.

The next largest contributor to expected losses is a specially-serviced loan (2.8%), which is secured by a 36,200 square foot retail property located in Nashville, TN. The loan, which matured in July 2013, is currently being managed under a lock box. Occupancy has declined to 65.2% as of July 2013 from 91.0% at year-end (YE) 2012.

The third largest contributor to expected losses is a specially-serviced loan (4.5%), which is secured by mobile home community in Superior Township, MI. The loan matured in May 2013 and has experienced a significant decline in occupancy. As of July 2013, occupancy declined to 65.2% from 91.0% at YE 2012. The Debt Service Coverage Ratio (DSCR) was reported at 0.99x as of first quarter March 31, 2013 compared to 2.25x at YE 2012.

RATING SENSITIVITY

The rating outlooks for classes D and E were revised to Outlook Stable to reflect that full principal repayment is highly probable given the continued amortization of the pool as well as defeasance of four loans ($18.2 million) that mature in 2015. An upgrade to the classes, however, is not warranted at this time due to continuing concerns with the current level and risk of increasing of interest shortfalls should additional loans transfer to special servicer.

Fitch affirms the following classes and/or revises Rating Outlooks and REs as indicated:

--$16.4 million class D at 'BBBsf', Outlook to Stable from Negative;

--$13 million class E at 'BBsf', Outlook to Stable from Negative.

--$15.9 million class F at 'CCCsf', RE to 100% from 80%;

--$13 million class G at 'Csf', RE to 80% from 0%.

--$18.8 million class H at 'Csf', RE 0%;

--$15.9 million class J at 'Csf', RE 0%;

--$7.2 million class K at 'Csf', RE 0%;

--$8.7 million class L at 'Csf', RE 0%;

--$120,561 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, A-3, A-4, A-1A, B and C certificates have paid in full. Fitch does not rate the class 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

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=821826

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Contacts

Fitch Ratings
Primary Analyst
Tiffany Pierce, +1-212-908-9107
Associate Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Committee Chairperson
Karen Trebach, +1-212-908-0215
Senior Director
or
Media Relations
Sandro Scenga, +1-212-908-0278 (New York)
sandro.scenga@fitchratings.com

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Contacts

Fitch Ratings
Primary Analyst
Tiffany Pierce, +1-212-908-9107
Associate Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Committee Chairperson
Karen Trebach, +1-212-908-0215
Senior Director
or
Media Relations
Sandro Scenga, +1-212-908-0278 (New York)
sandro.scenga@fitchratings.com