CHICAGO--(BUSINESS WIRE)--Fitch Ratings has upgraded one class and affirmed seven classes of Bear Sterns Commercial Mortgage Securities, Inc., (BSCMS) commercial mortgage pass-through certificates series 2001-TOP2. A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The upgrade reflects the expected payoff of the specially serviced asset and the continued principal paydown of class E. The affirmations of the remaining classes reflect losses that have been experienced. The pool is concentrated with only 11 loans remaining, down from the original 141 loans at issuance. Of the 11 loans, seven are fully amortizing, which represents 28% of the pool balance.
Fitch modeled losses of 16.4% of the remaining pool; expected losses on the original pool balance total 6.2%, including $59 million (5.9% of the original pool balance) in realized losses to date. Fitch has designated five loans (73.3%) as Fitch Loans of Concern, which includes one specially serviced asset (14.1%).
As of the June 2015 distribution date, the pool's aggregate principal balance has been reduced by 98% to $19.7 million from $1.01 billion at issuance. Per the servicer reporting, one loan (0.9% of the pool) is defeased. Interest shortfalls are currently affecting classes F through N.
The one specially serviced loan (14.1% of the pool) is secured by 20,773 square foot retail center located in Lewisville, TX. A portion of the property is subject to condemnation from the Texas Department of Transportation (TXDOT) as part of an expansion project. After enrollment in an early volunteer acquisition program, the borrower agreed to an offer from TXDOT for the property. The transaction is in process and proceeds are expected to pay off the loan in full. As of March 2015, the property was reported to be 10% occupied.
RATING SENSITIVITIES
Current risk exposure of the remaining pool includes single tenant assets and retail properties located in secondary markets. While a further upgrade to class E is possible, it is unlikely given the pool concentration and thin subordinate class.
DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action.
Fitch upgrades the following class and revises the RE as indicated:
--$18.5 million class E to 'CCCsf' from 'Csf'; RE 100%.
Fitch affirms the following class and revises the RE as indicated:
--$1.2 million class F at 'Dsf'; RE 90%.
Fitch affirms the following classes as indicated:
--$0 class G at 'Dsf'; RE 0%;
--$0 class H at 'Dsf'; RE 0%;
--$0 class J at 'Dsf'; RE 0%;
--$0 class K at 'Dsf'; RE 0%;
--$0 class L at 'Dsf'; RE 0%;
--$0 class M at 'Dsf'; RE 0%.
The class A-1, A-2, B, C, D and X-2 certificates have paid in full. Fitch does not rate the class N certificates. Fitch previously withdrew the rating on the interest-only class X-1 certificates.
Additional information is available at www.fitchratings.com.
Applicable Criteria
Global Structured Finance Rating Criteria (pub. 31 Mar 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864268
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria (pub. 10 Dec 2014)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608
Additional Disclosures
Dodd-Frank Rating Information Disclosure Form
https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=986928
Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=986928
Endorsement Policy
https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31
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