NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed the super senior and mezzanine classes of Bear Stearns Commercial Mortgage Securities Trust, 2006-PWR13, commercial mortgage pass-through certificates, and downgraded two distressed classes. A detailed list of rating actions follows at the end of this release.
KEY RATING DRIVERS
The downgrade of the distressed classes is due to greater certainty of losses associated with specially serviced loans and increased losses from performing loans with performance declines. Fitch modeled slightly lower losses of 8.3% for the remaining pool; expected losses of the original pool are at 9.8%, including losses already incurred to date. Approximately 40% of the non-specially serviced loans have a Fitch stressed loan to value greater than 90%. Fitch has designated 137 loans (45.9% of the pool) as Loans of Concern. In total, there are nine loans (5.3% of the pool) in special servicing, including one (0.1%) that is real estate owned (REO).
As of the November 2014 distribution date, the pool's aggregate principal balance has been reduced by approximately 24.4% to $2.20 billion from $2.91 billion at issuance. Realized losses to date have been $103.5 million (3.6% of the pool's original balance). Classes J through P have been depleted due to realized losses associated with loan dispositions and restructured loans and realized losses have reached class H as of the November 2014 distribution. Excluding the specially serviced loans, approximately 83.5% of the remaining pool, or $1.92 billion, is scheduled to mature in the next 24 months.
The Negative Outlook on class A-J reflects the likelihood of deterioration of credit enhancement due to higher than modeled losses on disposition of defaulted assets, modified or highly levered loans remaining in the pool. In addition, a top 10 loan, First Industrial Portfolio (2.2%) transferred to special servicing in June 2014, though remains current as of November 2014. There are also 137 loans considered Fitch loans of Concern as indicated above.
The largest contributor to modeled loss is secured by an industrial warehouse facility located in Phillipsburg, NJ (1% of the pool balance). The loan transferred to special servicing in July 2010 due to monetary default and has a receiver in place. The most recent reported occupancy was 45% with a valuation significantly below the trust debt amount.
The second largest contributor to modeled loss is a specially serviced loan secured by a neighborhood retail center (0.9% of the pool) located in Sparks, NV outside of Reno. The property lost Target in 2010 and is currently less than 50% occupied. A receiver is in place and the former Target space remains vacant.
The third largest contributor to modeled loss is Paces West (3.5% of the pool). The loan was modified and split between an A-note and B-note, or hope note and the property's occupancy was reported as 78.4% as of June 2014. Though occupancy is near underwritten levels, operating cash flow has remained significantly below.
Fitch has downgraded the following classes as indicated:
--$40 million class D to 'CCsf' from 'CCCsf', RE 0%;
--$32.7 million class F to 'Csf' from 'CCsf', RE 0%.
Fitch has affirmed the following classes:
--$1.1 billion class A-4 at 'AAAsf'; Outlook Stable;
--$301.3 million class A-1A at 'AAAsf'; Outlook Stable;
--$290.7 million class A-M at 'AAAsf'; Outlook Stable;
--$232.5 million class A-J at 'BBsf'; Outlook Negative;
--$65.4 million class B at 'CCCsf', RE 100%;
--$29.1 million class C at 'CCCsf', RE 60%;
--$29.1 million class E at 'CCsf', RE 0%;
--$32.7 million class G at 'Csf', RE 0%;
--$16.4 million class H at 'Dsf', RE 0%.
Classes J, K, L, M, N and O are affirmed at 'Dsf', RE 0% due to realized losses. Classes A-1, A-2, A-3 and A-AB have paid in full. Fitch does not rate the fully depleted class P. Fitch previously withdrew the rating on the interest-only classes X-1 and X-2.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (Aug. 4, 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
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria