Fitch Takes Various Actions on JPMCC 2003-ML1

NEW YORK--()--Fitch Ratings has upgraded four, downgraded one, and affirmed one class of J.P. Morgan Commercial Mortgage Securities Corp. 2003-ML1, commercial mortgage pass-through certificates. A detailed list of rating actions follows the end of the press release.

KEY RATING DRIVERS

The upgrades to classes H through L are due to increased credit enhancement from significant paydowns and the relatively stable performance of the pool. The downgrade to class M reflects the loss expectations from the specially serviced loans. Fitch modeled losses of 26.9% of the remaining pool; expected losses on the original pool balance total 2.2%, including losses already incurred. The pool has experienced $6.6 million (0.7% of the original pool balance) in realized losses to date. Fitch has designated six (67%) of the remaining 14 loans as Fitch Loans of Concern, which includes three specially serviced assets (48.9%). Three loans (4.6%) are currently defeased.

As of the February 2014 distribution date, the pool's aggregate principal balance has been reduced by 94.2% to $53.9 million from $929.8 million at issuance. Interest shortfalls are currently affecting classes N and NR.

Losses are expected for the three specially serviced loans. The remaining loans do not generate a modeled loss using the most recent reported cash flow and cap rates between 9% and 10.5%, the loan to value ratios for these loan range from 17.2% to 87%.

The largest specially serviced loan is a 199,366 square foot (sf) unanchored retail property (16% of the remaining balance) located in Dearborn, MI. The largest tenants at the property include Dental Center (17%), Murray's Auto (9%), and the Secretary of State (3%). The property was 56.1% occupied as of year-end (YE) 2012.

The second largest specially serviced loan is a 260,644 sf anchored retail property (21%) located in Racine, WI. The loan transferred to the special servicer due to a modification request, as the property has experienced cash flow issues. Anchor tenants at the property include Home Depot, Kmart, and OfficeMax. The property was 89% occupied as of September 2012.

The third largest specially serviced loan is a 93,677 sf anchored retail property (11.9%) located in Naugatuck, CT. The loan failed to make its balloon payment in January 2013. The property was 98.5% occupied as of YE 2012; however, the largest tenant at the property (56.1%) is currently dark.

RATING SENSITIVITIES

The ratings on the class H through L notes are expected to be stable as the credit enhancement remains high. Classes M and N may be subject to further downgrades as losses are realized.

Fitch has taken the following actions:

--$11.7 million class H upgraded to 'AAsf' from 'Asf'; Outlook Stable;

--$10.5 million class J upgraded to 'Asf' from 'BBBsf'; Outlook Stable;

--$5.8 million class K upgraded to 'BBBsf' from 'BBsf'; Outlook Stable;

--$5.8 million class L upgraded to 'BBsf' from 'B+sf'; Outlook Stable;

--$7 million class M downgraded to 'CCCsf/RE 80%' from 'Bsf';

--$4.6 million class N affirmed at 'CCCsf/RE 0%'.

Fitch also marked classes F and G as 'PIF'.

Fitch does not rate the class NR notes and previously withdrew the rating on the X-1 notes. Classes A-1, A-2, B, C, D, E, and X-2 have paid in full.

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=823516

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 Surveillance Analyst
Matthew McGowan, +1 212-908-0733
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, +1 212-908-0278
sandro.scenga@fitchratings.com

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Contacts

Fitch Ratings
Primary Surveillance Analyst
Matthew McGowan, +1 212-908-0733
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, +1 212-908-0278
sandro.scenga@fitchratings.com