Fitch Affirms MSCI 2007-TOP25

NEW YORK--()--Fitch Ratings has affirmed 17 classes of Morgan Stanley Capital I Trust 2007-TOP25 (MSCI 2007-TOP25) commercial mortgage pass-through certificates. A full list of rating actions follows at the end of this ratings action commentary.

KEY RATING DRIVERS

Fitch modeled losses of 11.6% of the remaining pool; expected losses on the original pool balance total 12.8%, including $92.2 million (5.9% of the original pool balance) in realized losses to date. Approximately 91% of the pool is scheduled to mature by January 2017.

Fitch has designated 34 loans (22.7%) as Fitch Loans of Concern, which includes four specially serviced assets (3.3%). The largest property type concentration remaining in the pool is retail at 37%.

As of the May 2016 distribution date, the pool's aggregate principal balance has been reduced by 40.6% to $922.3 million from $1.55 billion at issuance. Per the servicer reporting, 24 loans (18.5% of the pool) are defeased. Interest shortfalls are currently affecting classes D through P.

The largest contributor to expected losses is the Shoppes at Park Place loan (7.7% of the pool), which is secured by a 325,000 square foot (sf) retail center located in Pinellas Park, FL. As of the December 2015 rent roll, the property remained 100% occupied with approximately 11% tenant roll over the next year. The average current rent at the property is above market levels. Further, recent tenant sales information was not provided. The loan remains current, but is considered overleveraged; it matures in January 2017.

The next largest contributor to expected losses is the specially-serviced Romeoville Towne Center loan (2%), which is secured by a 108,000 sf retail property located in Romeoville, IL. The anchor space, which was formerly occupied by Dominick's Finer Foods Supermarkets (60.5%), is dark. Dominick's, a subsidiary of Safeway Inc., closed the grocery store in 2013 as part of its decision to exit the Chicago market. The tenant continues to pay rent; the lease matures in 2019. At this time, there are no prospects for the dark space. Additionally, the borrower is working with the applicable government authorities regarding a pending condemnation to expand the highway in front of the subject. The loan, which has an anticipated repayment date (ARD) in January 2017, transferred to special servicing in March 2014 due to imminent payment default.

RATING SENSITIVITIES

Rating Outlooks remain Stable for classes A-1A and A-3. The Positive Outlook on class A-M reflects its increasing credit enhancement as well as the high percentage of defeased collateral. Upgrade to this class is possible should credit enhancement continue to improve as loans pay off over the next six months.

Classes A-1A through A-M and distressed classes A-J through C could be subject to downgrade should overall property performance decline, additional loans transfer to special servicing, or further losses be realized.

DUE DILIGENCE USAGE

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

Fitch has affirmed the following ratings:

--$98 million class A-1A at 'AAAsf'; Outlook Stable;

--$497.3 million class A-3 at 'AAAsf'; Outlook Stable;

--$155.5 million class A-M at 'Asf'; Outlook to Positive from Negative;

--$110.8 million class A-J at 'CCCsf'; RE 65%.

--$27.2 million class B at 'CCsf'; RE 0%;

--$11.7 million class C at 'CCsf'; RE 0%;

--$22.4 million 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 O at 'Dsf'; RE 0%.

The class A-1, A-2 and A-AB certificates have paid in full. Fitch does not rate the class P certificates. Fitch previously withdrew the rating on the interest-only class X certificates.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

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=1007880

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1007880

Endorsement Policy

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

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings
Primary Analyst
Stacey McGovern, +1-212-908-0722
Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Mary MacNeill, +1-212-908-0785
Managing Director
or
Media Relations
Sandro Scenga, +1-212-908-0278 (New York)
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Stacey McGovern, +1-212-908-0722
Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Mary MacNeill, +1-212-908-0785
Managing Director
or
Media Relations
Sandro Scenga, +1-212-908-0278 (New York)
sandro.scenga@fitchratings.com