Fitch Upgrades 4 Classes of MSDW 2003-TOP9

NEW YORK--()--Fitch Ratings has upgraded four classes and affirmed two classes of Morgan Stanley Dean Witter Capital I Trust (MSDWC) commercial mortgage pass-through certificates series. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrades are due to increased credit enhancement as the pool deleverages from paydown. Fourteen loans remain in the pool. Fitch modeled losses of 21.1% of the remaining pool; expected losses on the original pool balance total 1%, including $3.4 million (0.3% of the original pool balance) in realized losses to date. Fitch has designated two (43.1%) Fitch Loans of Concern, which includes one specially serviced asset (18.4%).

As of the January 2015 distribution date, the pool's aggregate principal balance has been reduced by 96.6% to $36.9 million from $1.08 billion at issuance. Per the servicer reporting, two loans (2.5% of the pool) are defeased. Interest shortfalls are currently affecting class O.

The largest loan (24.7% of the pool) and the largest contributor to expected losses is secured by a 121,618 sf neighborhood shopping center located in North Highlands, CA. The center is anchored by Raley's grocery store (50% of GLA). Occupancy increased to 88.5% as of September 2014 from 74.9% at year-end (YE) 2012. The servicer reported an improved Debt Service Coverage Ratio (DSCR) of 1.36x as of year-to-date (YTD) Sept. 30, 2014 from 0.77x at YE 2012. The loan is scheduled to mature in November 2016, with 13.5% of the tenant space rolling prior to maturity.

The next largest contributor to expected losses is the specially-serviced loan (18.4%), a 93,354 sf retail property located in Indianapolis, IN. The loan matured in 2012, and the foreclosure process was initiated in December 2014. Occupancy improved to 94% as of November 2014 compared to 88.7% at YE 2012. However, DSCR was 1.26x compared to 1.44x over the same period.

RATING SENSITIVITY

Fitch ran additional stresses when considering upgrades. Although credit enhancement remains high relative to the rating category for some classes, further upgrades were limited due to increasing pool concentration. Due to smaller than average subordinate class sizes, any increase in realized losses may have a greater impact on credit enhancement. Of the 14 loans remaining, 11 loans (49% of the pool) are fully amortizing, although five of these loans are single tenanted properties.

Fitch upgrades the following classes:

--$9.3 million class H to 'AAAsf' from 'BBBsf'; Outlook Stable;

--$4 million class J to 'Asf' from 'BBsf'; Outlook Stable;

--$5.4 million class K to 'BBBsf' from 'BBsf'; Outlook Stable;

--$5.4 million class L to 'BBsf' from 'Bsf'; Outlook Stable.

Fitch affirms the following classes:

--$2.7 million class M at 'CCCsf'; RE 100%;

--$2.7 million class N at 'CCsf'; RE 95%.

Fitch does not rate the class O certificates. Fitch previously withdrew the rating on the interest-only class X-1 certificates.

Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 10, 2014 report, 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is available at 'www.fitchratings.com' under the following headers:

Structured Finance >> CMBS >> Criteria Reports

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. 10, 2014).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=976395

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Contacts

Fitch Ratings
Primary Analyst
Tiffany Pierce
Associate Director
+1 212-908-9107
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Mary MacNeill
Managing Director
+1 212-908-0785
or
Media Relations, New York
Sandro Scenga
+1 212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Tiffany Pierce
Associate Director
+1 212-908-9107
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Mary MacNeill
Managing Director
+1 212-908-0785
or
Media Relations, New York
Sandro Scenga
+1 212-908-0278
sandro.scenga@fitchratings.com