NEW YORK--(BUSINESS WIRE)--Fitch Ratings has assigned the following ratings and Rating Outlooks to the J.P. Morgan Chase Commercial Mortgage Securities Trust, Series 2014-C19 commercial mortgage pass-through certificates.
--$67,211,000 class A1 'AAAsf'; Outlook Stable;
--$468,698,000 class A2 'AAAsf'; Outlook Stable;
--$112,365,000 class A3 'AAAsf'; Outlook Stable;
--$276,298,000 class A4 'AAAsf'; Outlook Stable;
--$62,128,000 class A-SB 'AAAsf'; Outlook Stable;
--$1,085,370,000a class X-A 'AAAsf'; Outlook Stable;
--$89,860,000a class X-B 'AA-sf'; Outlook Stable;
--$98,670,000b class A-S 'AAAsf'; Outlook Stable;
--$89,860,000b class B 'AA-sf'; Outlook Stable;
--$63,431,000b class C 'A-sf'; Outlook Stable;
--$251,961,000b class EC 'A-sf'; Outlook Stable;
--$65,193,000c class D 'BBB-sf'; Outlook Stable;
--$31,715,000c class E 'BBsf'; Outlook Stable;
--$17,620,000c class F 'Bsf'; Outlook Stable.
(a) Notional amount and interest only.
(b) Class A-S, B, and C certificates may be exchanged for a related amount of class EC certificates, and class EC certificates may be exchanged for class A-S, B, and C certificates.
(c) Privately placed pursuant to Rule 144A.
Fitch does not rate the $56,382,769 class NR, the $105,717,769 interest-only class X-C, and the $21,703,000 class CSQ. Classes A-2FL and A-2FX have been withdrawn from the deal structure since Fitch issued its expected ratings on April 22, 2014. The classes above reflect the final ratings and deal structure.
The certificates represent the beneficial ownership in the trust, primary assets of which are 69 loans secured by 100 commercial properties having an aggregate principal balance of approximately $1.41 billion as of the cutoff date. The loans were contributed to the trust by JPMorgan Chase Bank, National Association; Barclays Bank PLC; KeyBank National Association; and Starwood Mortgage Funding II LLC.
Fitch reviewed a comprehensive sample of the transaction's collateral, including site inspections on 81.6% of the properties by balance, cash flow analysis on 75.1%, and asset summary reviews on 75.1% of the pool.
The transaction has a Fitch stressed debt service coverage ratio (DSCR) of 1.32x, a Fitch stressed loan-to-value (LTV) of 100.9%, and a Fitch debt yield of 10.2%. Fitch's aggregate net cash flow represents a variance of 7.7% to issuer cash flows.
KEY RATING DRIVERS
Improved Leverage from Recent Transactions: The pool's Fitch DSCR and LTV of 1.32x and 100.9%, respectively, are better than the 2013 and 2014 year-to-date (YTD) averages of 1.29x and 101.6%, and 1.18x and 104.7%, respectively.
Above-Average Property Quality: Fitch assigned property quality grades of 'A-' or better to three of the 10 largest loans in the pool, which represent 13.1% of the balance of properties inspected by Fitch. Furthermore, property quality grades of 'B+' or better were assigned to 44.2% of the balance of properties inspected by Fitch.
Limited Amortization: The pool is scheduled to amortize by 10.62% of the initial pool balance prior to maturity. The pool's concentration of partial interest loans of 29.4% is lower than the 2013 and 2014 YTD averages of 34% and 37.63%, respectively. However, the pool's concentration of full-term interest-only loans at 36.4% is higher than the 2013 and 2014 YTD averages of 17.1% and 15.8%, respectively. There is one fully amortizing loan, Centerville Square (2.7%), and the Grand Williston Hotel (0.8%) is a five-year loan amortizing on a 10-year schedule.
For this transaction, Fitch's net cash flow (NCF) was 10.26% below the most recent reported net operating income (NOI) (for properties for which NOI was provided, excluding properties that were stabilizing during this period).
Unanticipated further declines in property-level NCF could result in higher defaults and loss severity on defaulted loans and could result in potential rating actions on the certificates. Fitch evaluated the sensitivity of the ratings assigned to JPMBB 2014-C19 certificates and found that the transaction displays average sensitivity to further declines in NCF. In a scenario in which NCF declined a further 10% from Fitch's NCF, a downgrade of the junior 'AAAsf' certificates to 'AAsf' could result. In a scenario in which NCF declined a further 20% from Fitch's NCF, a downgrade of the junior 'AAAsf' certificates to 'A-sf' could result. In a more severe scenario, in which NCF declined a further 30% from Fitch's NCF, a downgrade of the junior 'AAAsf' certificates to 'BBB-sf' could result. The presale report includes a detailed explanation of additional stresses and sensitivities.
Key Rating Drivers and Rating Sensitivities are further described in the accompanying presale report.
The master servicer will be KeyBank National Association, rated 'CMS1' by Fitch. The special servicer will be Midland Loan Services, Inc. rated 'CSS1' by Fitch.
The presale report is available at 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions' (August 2013);
--'Global Structured Finance Rating Criteria' (June 2012);
--'Criteria for Special-Purpose Vehicles in Structured Finance Transactions' (May 2012);
--'U.S. Commercial Mortgage Servicer Rating Criteria' (February 2011);
--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (December 2012);
--'Counterparty Criteria for Structured Finance Transactions' (May 2012).
Applicable Criteria and Related Research:
Counterparty Criteria for Structured Finance and Covered Bonds
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria
Rating Criteria for U.S. Commercial Mortgage Servicers
Criteria for Special-Purpose Vehicles in Structured Finance Transactions - Effective 13 June 2011 to 30 May 2012
Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions
Global Structured Finance Rating Criteria