NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed J.P. Morgan Chase Commercial Mortgage Series Corp. commercial mortgage pass-through certificates series 2005-LDP5. A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The affirmations are the result of stable overall pool performance since Fitch's last review. Fitch modeled losses of 9.7% for the remaining pool; expected losses on the original pool balance total 7.6%, including $23 million (0.5% of the original pool balance) in realized losses to date. Fitch has designated 32 loans (18.5%) as Fitch Loans of Concern, which includes four specially serviced assets (6.6%).
As of the July 2014 distribution date, the pool's aggregate principal balance has been reduced by 27.5% to $3.14 billion from $4.33 billion at issuance. Thirteen loans (5.2%) are defeased. Interest shortfalls totaling $16.1 million are currently affecting classes L through NR.
RATING SENSITIVITIES
Ratings on all investment grade classes are expected to remain stable and no near-term rating actions are anticipated. Future downgrades to class G are likely if pool performance deteriorates. In addition, the distressed classes (rated below 'B') may be subject to further rating actions as losses are realized.
The largest contributor to expected losses is a loan secured by a 526,245 square foot (sf) Class A corporate headquarters campus complex located in Las Colinas, Texas (3.1% of the pool). The loan was transferred to special servicing in March 2012 due to covenant default as a result of reserve funding shortfalls in the amount of $1.5 million. The borrower has submitted a loan modification proposal which is under review by the special servicer. The property is 100% leased to NEC Corporation of America until March 2016, who in turn subleases the space to various tenants.
The next largest contributor to expected losses is a 706,684 sf regional enclosed mall located in Hanover, MA (2.7%). The property became a real estate owned asset (REO) in February 2010 through foreclosure. Anchor tenants include WalMart, JC Penney and Dick's Sporting Goods. The servicer reported property occupancy was 97% as of first quarter (1Q) 2014.
The third largest contributor to expected losses is the Atlantic Development Portfolio loan (2.7%), which is secured by five office complexes and two industrial properties located in Somerset and Warren, NJ. The properties have suffered from reduced revenue due to lower occupancy as a result of tenants vacating upon or prior to lease expirations. The servicer reported occupancy as of 1Q 2014 was 73%, compared to 97% at issuance. Servicer reported second quarter 2013 debt service coverage ratio (DSCR) was 1.0x, compared to 0.8x at YE2012 and 0.81x at YE2011.
Fitch affirms the following classes as indicated:
--$97.1 million class A-3 at 'AAAsf'; Outlook Stable;
--$1.4 billion class A-4 at 'AAAsf'; Outlook Stable;
--$22.7 million class A-SB at 'AAAsf'; Outlook Stable;
--$257.3 million class A-1A at 'AAAsf'; Outlook Stable;
--$419.7 million class A-M at 'AAAsf'; Outlook Stable;
--$299 million class A-J at 'AAsf'; Outlook to Stable from Negative;
--$26.2 million class B at 'Asf'; Outlook Stable;
--$73.4 million class C at 'BBBsf'; Outlook Stable;
--$42 million class D at 'BBB-sf'; Outlook Stable;
--$21 million class E at 'BBsf'; Outlook Stable;
--$52.5 million class F at 'Bsf'; Outlook Stable;
--$36.7 million class G at 'B-sf'; Outlook Negative;
--$52.5 million class H at 'CCCsf'; RE 95%.
--$42 million class J at 'CCCsf'; RE 0%;
--$63 million class K at 'CCsf'; RE 0%.
--$26.2 million class L at 'CCsf'; RE 0%;
--$15.7 million class M at 'CCsf'; RE 0%;
--$15.7 million class N at 'Csf'; RE 0%;
--$5.2 million class O at 'Csf'; RE 0%;
--$5.2 million class P at 'Csf'; RE 0%;
--$10.5 million class Q at 'Csf'; RE 0%.
The class A-1, A-2FL and A-2 certificates have paid in full.
Fitch does not rate the class NR, HG-1, HG-2, HG-3, HG-4 and HG-5 certificates. Fitch previously withdrew the ratings on the interest-only class X-1 and X-2 certificates.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (May 20, 2014);
--'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=748821
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=841477
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