Fitch Affirms All Classes of JPM 2006-CIBC15; Outlooks Revised

NEW YORK--()--Fitch Ratings has affirmed 17 classes of JP Morgan Chase Commercial Mortgage Securities Corp commercial mortgage pass-through certificates series 2006-CIBC15 (JPM 2006-CIBC15). A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The affirmations to the senior classes are primarily due to the overall pool performance meeting Fitch's expectations at its last rating action. Fitch has modeled total losses at 23.4% of the original pool balance compared with 22.8% at last rating action. To date, total realized losses have reached $293 million (13.8% of the original pool balance). Fitch anticipates significant paydown over the next few months as approximately 93% of the portfolio, including specially serviced assets, is scheduled to mature through June 2016.

As of the February 2016 distribution date, the pool's aggregate principal balance has been reduced by 50.2% to $1.06 billion from $2.12 billion at issuance. Fitch has designated 33 loans (71.3%) as Fitch Loans of Concern, which includes six specially serviced assets (10.1%).

Per the servicer reporting, 10 loans (8% of the pool) are defeased. Interest shortfalls are currently affecting classes A-J through NR.

The largest contributor to expected losses remains the Warner Building (27.7% of the pool), which is secured by a 615,000 square foot (sf) landmark office property located in Washington, D.C., approximately three blocks from the White House. In January 2012, the property experienced a significant decline in occupancy from 99% to 49% as a result of the bankruptcy and vacancy of the largest tenant, which represented 51% of net rentable area (NRA). As of the January 2016 rent roll, the property occupancy has increased to approximately 79%. The largest tenants are Baker Botts, LLP (27%, lease expiration 2020), Cooley LLP (21%, 2028), General Electric Company (9%, 2027), and Live Nation, parent of the Warner Theater (7%, 2023). The borrower continues to market the remaining vacant space. Cash flow has been trending up, as occupancy has slowly improved and free rent periods have continued to burn off. The loan had a servicer-reported September 2015 YTD debt service coverage ratio (DSCR) of 0.74x. The loan is scheduled to mature in June 2016.

The next largest contributor to expected losses is the specially serviced Scottsdale Plaza Resort (5.3% of the pool), which is secured by a 404-key hotel located in Scottsdale, AZ. The loan transferred to special servicing in May 2015 due to imminent default. The borrower has not made any payments since March 2015 and it has an upcoming maturity in June 2016. The property had generated less than breakeven cash flow since 2009 and has a servicer reported YTD September 2015 DSCR of 0.74x. Prior to default, the borrower was funding debt service shortfalls out of pocket. The special servicer is proceeding with foreclosure while discussing a possible modification and extension of the loan.

RATING SENSITIVITIES

Outlooks on classes A-1A and A-4 have been revised to Negative from Stable due to the uncertainty involving a substantial percentage of upcoming loan maturities. The classes could be downgraded should a significant percentage of loans not pay off as scheduled.

The distressed class A-M is subject to further downgrade should more loans transfer to special servicing and/or additional losses be realized. The class could be upgraded should recoveries on the loans be better than anticipated.

DUE DILIGENCE USAGE

No third-party due diligence was provided or reviewed in relation to this rating action.

Fitch has affirmed and revised Outlooks as follows:

--$553.4 million class A-4 at 'AAsf'; Outlook to Negative from Stable;

--$159.5 million class A-1A at 'AAsf'; Outlook to Negative from Stable;

--$211.8 million class A-M at 'CCCsf'; RE 70%.

--$130.6 million class A-J at 'Dsf'; RE 0%;

--$0 class B at 'Dsf'; RE 0%;

--$0 class C at 'Dsf'; RE 0%;

--$0 class D at 'Dsf'; RE 0%;

--$0 class E at 'Dsf'; RE 0%;

--$0 class F at 'Dsf'; RE 0%;

--$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%;

--$0 class N at 'Dsf'; RE 0%;

--$0 class P at 'Dsf'; RE 0%.

Classes A-1, A-3, and A-SB have paid in full. Fitch does not rate the class NR 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

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

U.S. and Canadian Fixed-Rate Multiborrower CMBS Surveillance and U.S. Re-REMIC Criteria (pub. 13 Nov 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=873395

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1000016

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1000016

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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Contacts

Fitch Ratings
Primary Surveillance Analyst
Stacey McGovern
Director
+1-212-908-0722
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Karen Trebach
Senior Director
+1-212-908-0215
or
Media Relations:
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Surveillance Analyst
Stacey McGovern
Director
+1-212-908-0722
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Karen Trebach
Senior Director
+1-212-908-0215
or
Media Relations:
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com