Fitch Upgrades 1 Class of MSDW 2002-IQ2

NEW YORK--()--Fitch Ratings has upgraded one and affirmed seven classes of Morgan Stanley Dean Witter Capital I Trust commercial mortgage pass through certificates, series 2002-IQ2. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrade and affirmations are due to sufficient credit enhancement to the remaining Fitch rated classes. Despite high credit enhancement and minimal expected losses, upgrades were limited given the concentrated nature of the pool. Expected losses on the original pool balance total 0.8%, including $4.6 million (0.6% of the original pool balance) in realized losses to date.

As of the February 2014 distribution date, the pool's aggregate principal balance has been reduced by 95% to $38.9 million from $778.6 million at issuance. There are 16 loans remaining in the pool, all of which are performing and with the master servicer. The largest loan represents 52% of the pool balance; the top three loans (67.5%) are amortizing on a 25-year schedule with the remaining loans fully amortizing.

The largest loan is a retail center in Knoxville, TN anchored by Kohl's (22%, exp. 2019), KVAT Food Stores (14.7%, exp. July 2018), Steinmart (10%, exp. November 2017 and Bed, Bath and Beyond (10%, exp. 2023). The loan is currently 100% occupied and matures in 2019.

There are several single tenant property concentrations in the remaining pool, with 9 loans being occupied by a single tenant. The second largest loan (8.5% of the pool) is occupied by two tenants, Winn-Dixie and a Wendy's Restaurant. The third largest loan (7.2%) is an 80,000 square foot (sf) single-tenant industrial property located in San Diego, CA. The loan has a stable NOI DSCR of 1.91x as of Year End (YE) 2012. However, the tenant has extended their lease only a year to June 2015 from the previous June 2014 expiration. Additionally, there are three single tenant Rite-Aid loans (7.8%) and three single tenant Winn-Dixie loans (2.1%).

RATING SENSITIVITY

The ratings are expected to remain stable due to the concentrations within the pool.

Fitch upgrades the following class:

--$3.9 million class K to 'BBBsf' from 'BBB-sf', Outlook Stable.

Fitch affirms the following classes:

--$657,052 class F at 'AAAsf', Outlook Stable;

--$5.8 million class G at 'AAAsf', Outlook Stable;

--$9.7 million class H at 'AAsf', Outlook Stable;

--$5.8 million class J at 'Asf', Outlook Stable;

--$3.9 million class L at 'B+sf', Outlook Stable;

--$2.9 million class M at 'Bsf', Outlook Stable;

--$2.9 million class N at 'CCCsf', RE 100%.

The class A-1, A-2, A-3, A-4, B, C, D, and E certificates and the interest-only class X-2 certificates have paid in full. Fitch does not rate the class O certificates. Fitch previously withdrew the rating on the interest-only class X-1 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=823736

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
Associate Director
+1-212-908-0871
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Committee Chairperson
Mary MacNeill
Managing Director
+1-212-908-0785
or
Media Relations:
Sandro Scenga, +1-212-908-0278 (New York)
sandro.scenga@fitchratings.com

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Contacts

Fitch Ratings
Primary Analyst
Martin Nunnally
Associate Director
+1-212-908-0871
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Committee Chairperson
Mary MacNeill
Managing Director
+1-212-908-0785
or
Media Relations:
Sandro Scenga, +1-212-908-0278 (New York)
sandro.scenga@fitchratings.com