NEW YORK--(BUSINESS WIRE)--Fitch Ratings has issued a presale report on J.P. Morgan Chase Commercial Mortgage Securities Trust's JPMBB 2014-C25 commercial mortgage pass-through certificates.
Fitch expects to rate the transaction and assign Rating Outlooks as follows:
--$38,041,000 class A-1 'AAAsf'; Outlook Stable;
--$109,506,000 class A-2 'AAAsf'; Outlook Stable;
--$14,362,000 class A-3 'AAAsf'; Outlook Stable;
--$190,000,000 class A-4A1 'AAAsf'; Outlook Stable;
--$307,915,000 class A-5 'AAAsf'; Outlook Stable;
--$84,188,000 class A-SB 'AAAsf'; Outlook Stable;
--$919,315,000b class X-A 'AAAsf'; Outlook Stable;
--$51,813,000b class X-B 'AA-sf'; Outlook Stable;
--$90,303,000a class A-S 'AAAsf'; Outlook Stable;
--$51,813,000a class B 'AA-sf'; Outlook Stable;
--$42,931,000a class C 'A-sf'; Outlook Stable;
--$185,047,000a class EC 'A-sf'; Outlook Stable;
--$85,000,000c class A-4A2 'AAAsf'; Outlook Stable;
--$42,931,00bc class X-C 'A-sf'; Outlook Stable;
--$78,460,000bc class X-D 'BBB-sf'; Outlook Stable;
--$28,128,000bc class X-E 'BB-sf'; Outlook Stable;
--$11,843,000bc class X-F 'B-sf'; Outlook Stable;
--$51,812,811bc class X-NR 'NR';
--$78,460,000c class D 'BBB-sf'; Outlook Stable;
--$28,128,000c class E 'BB-sf'; Outlook Stable;
--$11,843,000c class F 'B-sf'; Outlook Stable;
--$51,812,812c class NR 'NR';
--$10,000,000cd class BNB 'NR'.
(a) Class A-S, B, and C certificates may be exchanged for class EC certificates, and class EC certificates may be exchanged for class A-S, B, and C certificates.
(b) Notional amount and interest only. Privately placed and pursuant to rule 144A.
(c) Privately placed and pursuant to rule 144A.
(d) The class BNB certificates will only receive distributions from, and will only incur losses with respect to, the nonpooled component of the BankNote Building loan. NR (Not rated).
The expected ratings are based on information provided by the issuer as of Oct. 23, 2014. Fitch does not expect to rate the $51,812,811 class NR, or the $51,812,811 interest only class X-NR. Fitch does not expect to rate the $10,000,000 class BNB, which will only receive distributions from, and will only incur losses with respect to, the non-pooled component of the BankNote Building mortgage loan.
The certificates represent the beneficial ownership in the trust, primary assets of which are 65 loans secured by 157 commercial properties having an aggregate principal balance of approximately $1.184 billion as of the cutoff date. The loans were contributed to the trust by JPMorgan Chase Bank, National Association; Ladder Capital Finance LLC; Barclays Bank PLC; Starwood Mortgage Funding II LLC; Redwood Commercial Mortgage Corporation; Column Financial, Inc.
Fitch reviewed a comprehensive sample of the transaction's collateral, including site inspections on 68.1% of the properties by balance, cash flow analysis on 75.0%, and asset summary reviews on 75.0% of the pool.
The transaction has a Fitch stressed debt service coverage ratio (DSCR) of 1.18x, a Fitch stressed loan-to-value (LTV) of 103.7%, and a Fitch debt yield of 9.1%. Fitch's aggregate net cash flow represents a variance of 6.4% to issuer cash flows.
KEY RATING DRIVERS
Fitch Leverage: The Fitch leverage is slightly better than recent transactions rated by Fitch. The pool's Fitch DSCR and LTV are 1.18x and 103.7%, which is slightly better than the first-half 2014 averages of 1.19x and 105.6%, though worse than 2013 averages and 1.29x and 101.6%.
Limited Amortization: Limited Amortization. Seven loans (23.9%) are full term interest-only while an additional 31 loans (54.9%) have a partial interest-only period. The pool will amortize by 10.6%, which is less than other recent transactions.
Credit Opinion: The third largest loan in the pool, Grapevine Mills (6.16%) has a stand-alone credit opinion of 'BBB-'. The loan is collateralized by a 1.6 million-sf regional shopping center located in Grapevine, TX.
RATING SENSITIVITIES
For this transaction, Fitch's net cash flow (NCF) was 7.66% below the most recent NOI (for properties that a recent 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 severities on defaulted loans, and could result in potential rating actions on the certificates. Fitch evaluated the sensitivity of the ratings assigned to JPMBB 2014-C25 certificates and found that the transaction displays average sensitivity to further declines in NCF. In a scenario in which NCF declined a further 20% from Fitch's NCF, a downgrade of the junior 'AAAsf' certificates to 'BBB+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 master servicer will be Wells Fargo Bank, National Association, rated 'CMS1-' by Fitch. The special servicer will be Rialto Capital Advisors, LLC, rated 'CSS2-' 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' (June 24, 2014);
--'Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions' (Sept. 19, 2014)
--'Global Structured Finance Rating Criteria' (May 20, 2014);
--'Rating Criteria for U.S. Commercial Mortgage Servicers' (Feb. 14, 2014);
--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 11, 2013);
--'Counterparty Criteria for Structured Finance and Covered Bonds' (May 14, 2014).
Applicable Criteria and Related Research: JPMBB Commercial Mortgage Securities Trust 2014-C25 (US CMBS)
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=801368
Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748778
Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=772328
Global Structured Finance Rating Criteria - Effective from 20 May 2014 to 4 August 2014
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748821
Rating Criteria for U.S. Commercial Mortgage Servicers
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=735382
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724961
Counterparty Criteria for Structured Finance and Covered Bonds
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=909714
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