Fitch Downgrades JPMCC 2008-C2; Revises Outlooks

NEW YORK--(Business Wire)--
Fitch Ratings has taken various actions on 17 classes of J.P. Morgan Chase
Commercial Mortgage Securities Trust 2008-C2. In addition, Fitch has assigned
Rating Outlooks as applicable. A detailed list of rating actions follows at the
end of this press release.

The downgrades are the result of loss expectations on loans in special
servicing, as well as Fitch's prospective views regarding commercial real estate
market value and cash flow declines. Fitch forecasts potential losses of 14.6%
for this transaction should market conditions not recover. Today's rating
actions are based on losses of 14.1%, including 100% of the losses associated
with term defaults and any losses associated with maturities within the next
five years. Given the significant term to maturity, Fitch's actions only account
for 25% of the losses associated with maturities beyond five years. The bonds
with Negative Outlooks indicate classes that may be downgraded in the future
should full potential losses be realized. Fitch considers the Outlooks on the
super-senior classes to be Stable due to projected losses having limited impact
on credit enhancement when associated pay down is factored into the analysis.

Fitch analyzed the transaction and calculated expected losses by assuming cash
flows on each of the properties decline 15% from year-end (YE) 2007 and property
values decline 35% from issuance. These loss estimates were reviewed in more
detail for loans representing 71% of the pool and, in certain cases, revised
based on additional information and/or property characteristics. Approximately
97% of the assumed losses were on loans reviewed in detail by Fitch.

Approximately 16.4% of the mortgages mature within the next five years as
follows: 4.8% in 2012, 2.2% in 2013, and 9.5% in 2014. In 2017 and 2018, 83% of
the pool is scheduled to mature.

Fitch identified 20 Loans of Concern (37.1%) within the pool, four of which
(22.3%) are delinquent and in special servicing. Six of the Fitch Loans of
Concern (29.7%) are within the transaction's top 15 loans (63.7%) by unpaid
principal balance.

Losses are expected on eight of the loans within the top 15 (43.7%): four
(24.1%) of these loans are expected to default the term, while losses on the
remaining four loans (19.6%) are expected at maturity. Loss severities
associated with these loans range from 5% to 60%.

The largest contributors to loss by loan balance are as follows: The Promenade
Shops at Dos Lagos (10.8%), The Westin Portfolio (9%), and The Regency Portfolio
(2.2%), all of which are specially serviced. Appraisal reductions and associated
monthly appraisal subordination entitlement reductions (ASER) are present for
The Promenade Shops at Dos Lagos and The Westin Portfolio. The cumulative ASERs
for these two properties are $1.4 million and $604,354, respectively.

The Promenade Shops at Dos Lagos is comprised of a 345,847 square foot (sf)
lifestyle/entertainment retail center built in 2006/2007. The loan transferred
to special servicing in October 2008 for monetary default after the borrower
indicated the property was significantly impacted by the downturn in the economy
and slower than anticipated growth of the neighborhood residential real estate
market. Many tenants at the center have been struggling since origination and
have asked for rent reductions. It is also noted that these tenants have kickout
provisions in their leases that could be triggered in the next year. As of July
2009, the average sales per square foot at the center were 36% below the
pre-construction projection. Although the sponsor, Poag & McEwen, is focusing on
lease re-negotiations, tenant retention, and improving sales volume, the special
servicer continues to move forward with foreclosure.

The Westin Portfolio consists of the 487-room Westin La Polama in Tucson, AZ,
with a 27-hole Jack Nicklaus golf course and spa, and the 412-room oceanfront
Westin Hilton Head, in Hilton Head, SC. The loan transferred to special
servicing in October 2008 for monetary default. The properties have been
significantly affected by the weakening hotel sector and continue to experience
performance declines while both business and leisure travel remain low. The
servicer continues to negotiate with the borrower, and updated appraisals have
been received. The current appraisals indicate value is not sufficient to
support the outstanding debt amount.

The Regency Portfolio transferred to special servicing in March 2009 for
imminent default after the borrower indicated it would be unable to make any
future debt service payments due to a substantial increase in vacancies and
declining rental values. The loan is secured by 20 properties - 11 retail, four
industrial, three flex, one medical office and one multi-family - primarily
located in Iowa. Management of the property has been transferred to a
third-party entity and a receiver has been appointed. The special servicer
continues to negotiate with the borrower.

Fitch has downgraded, removed from Rating Watch Negative, and assigned Outlooks
and Loss Severity (LS) ratings to the following classes:

--$116.5 million class AM to 'BBB-/LS4' from 'AAA'; Outlook Negative;

--$61.2 million class AJ to 'B/LS5' from 'AAA'; Outlook Negative;

--$14.6 million class B to 'B-/LS5' from 'AA+'; Outlook Negative;

--$14.6 million class C to 'B-/LS5' from 'AA'; Outlook Negative;

--$10.2 million class D to 'CCC/RR6' from 'AA-';

--$10.2 million class E to 'CC/RR6' from 'A+';

--$13.1 million class F to 'CC/RR6' from 'A';

--$11.7 million class G to 'CC/RR6' from 'A-';

--$16 million class H to 'CC/RR6' from 'BBB+';

--$14.6 million class J to 'CC/RR6' from 'BBB';

--$14.6 million class K to 'CC/RR6' from 'BBB-';

--$8.7 million class L to 'CC/RR6' from 'BB+';

--$4.4 million class M to 'CC/RR6' from 'BB';

--$5.8 million class N to 'CC/RR6' from 'BB-';

--$4.4 million class P to 'CC/RR6' from 'B+';

--$2.9 million class Q to 'CC/RR6' from 'B';

--$4.4 million class T to 'CC/RR6' from 'B-'.

Fitch has also affirmed the following classes and Outlooks:

--$19.8 million class A-1 at 'AAA/LS2'; Outlook Stable;

--$68.1 million class A-2 at 'AAA/LS2'; Outlook Stable;

--$105.5 million class A-3 at 'AAA/LS2'; Outlook Stable;

--$54.5 million class A-SB at 'AAA/LS2'; Outlook Stable;

--$354.6 billion class A-4 at 'AAA/LS2'; Outlook Stable;

--$145 million class A-FL at 'AAA/LS2'; Outlook Stable;

--$64.7 million class A-1A at 'AAA/LS2'; Outlook Stable;

--Interest-only class X1 at 'AAA'; Outlook Stable;

Additional information on Fitch's amended criteria for analyzing recent vintage
U.S. CMBS is available in the July 7, 2009 report, 'Surveillance Methodology for
Recent Vintage U.S. CMBS', available on Fitch's web site at
'www.fitchratings.com' under the following headers:

Structured Finance then CMBS then Criteria Reports

Fitch will release a report titled 'J.P. Morgan Chase Commercial Mortgage
Securities Trust 2008-C2' that will contain a graph of revised loss expectations
for the transaction at 'www.fitchratings.com' under the following headers:

Structured Finance then CMBS then Special Reports

Fitch's rating definitions and the terms of use of such ratings are available on
the agency's public site, '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 Ratings
Chris Bushart, 212-908-0606, New York
Britt Johnson, 312-606-2341, Chicago
or
Media Relations:
Sandro Scenga, 212-908-0278, New York
Email: sandro.scenga@fitchratings.com

Copyright Business Wire 2009