Fitch Affirms JP Morgan 2007-FL1; Revises Outlooks on 3 Classes

NEW YORK--()--Fitch Ratings has affirmed all classes of J.P. Morgan Chase Commercial Mortgage Securities Corp. series 2007-FL1. In addition, Fitch has revised the Rating Outlook for classes B, C and D to Stable from Negative. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The transaction has experienced significant principal paydown (44.7%) since Fitch's last rating action from the payoff of three loans. Although credit enhancement has increased, upgrades are not warranted due to loan concentration (only two loans remaining in the trust), as well as the loan status of the remaining assets, both of which remain with the special servicer. The ratings of classes B and C are affirmed at 'A' as interest shortfalls continue to affect these classes. Additional information on Fitch's criteria surrounding interest shortfalls and rating caps is available in the criteria report at the end of the press release. The non-pooled junior component certificates have also been affirmed based on Fitch's loss expectation on the Resorts International loan.

The PHOV loan (50.8%) is currently secured by a portfolio of eight full-service hotels located in FL, CA, SC and IL, totaling 2,066 rooms (following the previous release of four hotel properties). The loan was restructured in October 2012 and a forbearance agreement is in place until July 9, 2014. The loan is performing under the modification terms and is expected to refinance by the end of the forbearance.

Per STR reporting, year-end (YE) 2013 portfolio occupancy, ADR and RevPar were 75.9%, $130.07, and $105.98, compared to the competitive set occupancy, ADR and RevPar of 74.5%, $141.98, and $107.85, respectively.

The Resorts International Portfolio (49.2%) currently consists of two hotel/gaming properties in Tunica, MS, totaling 439 rooms (following the previous release of two hotel/gaming properties). The properties became real estate owned (REO) assets in November 2011. Collateral performance remains well below expectations from issuance. The servicer is working to stabilize the properties prior to marketing the assets for sale. Both properties are currently under renovation.

RATING SENSITIVITIES

Fitch analyzed each loan individually based on servicer provided YE 2013 cash flow and ran multiple scenarios which assume the PHOV Portfolio loan pays off, or in another case fails to refinance. The outcomes of these two scenarios and the impact to the trust were then considered in Fitch's rating recommendations.

The PHOV Portfolio is serviced by Strategic Asset Services LLC. The Resorts International Portfolio loan is serviced by KeyBank Real Estate Capital. If the PHOV Portfolio loan does not pay off, future downgrades to class E are possible.

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

--$362,286 class B at 'Asf'; Outlook to Stable from Negative;

--$32.4 million class C at 'Asf'; Outlook to Stable from Negative;

--$30.8 million class D at 'BBBsf'; Outlook to Stable from Negative;

--$37.3 million class E at 'Bsf'; Outlook Negative;

--$26 million class F at 'CCCsf'; RE100%';

--$26 million class G at 'CCsf'; RE40%;

--$35.7 million class H at 'Csf'; RE0%;

--$32.5 million class J at 'Csf'; RE0%;

--$10.3 million class K at 'Dsf'; RE0%.

--Class L at 'Dsf'; RE0%;

--$11.9 million class RS-1 at 'Csf'; RE0%;

--$12.8 million class RS-2 at 'Csf'; RE0%;

--$15.6 million class RS-3 at 'Csf'; RE0%;

--$11.1 million class RS-4 at 'Csf'; RE0%;

--$15.4 million class RS-5 at 'Csf'; RE0%;

--$13.2 million class RS-6 at 'Csf'; RE0%;

--$7.6 million class RS-7 at 'Csf'; RE0%.

Classes A1, A2 and the interest-only class X-1 have paid in full. Fitch withdrew its rating on the interest-only class X-2 at prior review.

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

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 20, 2014);

--'Criteria for Rating Caps and Limitations in Global Structured Finance Transactions' (June 12, 2013);

--'Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions' (Sept. 20, 2013).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748821

Criteria for Rating Caps and Limitations in Global Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=709840

Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=718468

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=831188

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Contacts

Fitch Ratings
Primary Analyst
Amy Gan, +1 212-908-9143
Director
Fitch Ratings, Inc., 33 Whitehall Street, New York, NY 10004
or
Committee Chairperson
Chris Bushart, +1 212-908-0606
Senior Director
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com

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Contacts

Fitch Ratings
Primary Analyst
Amy Gan, +1 212-908-9143
Director
Fitch Ratings, Inc., 33 Whitehall Street, New York, NY 10004
or
Committee Chairperson
Chris Bushart, +1 212-908-0606
Senior Director
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com