TEXT - Fitch cuts 13 classes of JPMCC 2007-CIBC20
(The following statement was released by the rating agency) Feb 8 - Fitch Ratings has downgraded 13 classes, removed two from Rating Watch Negative and affirmed seven classes of J.P. Morgan Chase Commercial Mortgage Securities Trust, (JPMCC) commercial mortgage pass-through certificates series 2007-CIBC20 due to increased loss expectations associated with the specially serviced assets and on performing loans with declines in performance indicative of a higher probability of default. A detailed list of rating actions follows at the end of this press release. RATING SENSITIVITIES Fitch modeled losses of 13.1% of the remaining pool; expected losses on the original pool balance total 13.5%, including $45.8 million or 1.8% of the original pool balance in realized losses to date. This is an increase from the previous modeled 11.6% of original pool balance, and is primarily attributed to declining valuations on the specially serviced assets. Fitch has designated 52 loans (32.9%) as Fitch Loans of Concern, which includes 15 specially serviced assets (15.8%). As of the January 2013 distribution date, the pool's aggregate principal balance has been reduced by 10.7% to $2.27 billion from $2.54 billion at issuance. No loans have defeased since issuance. Interest shortfalls are currently affecting classes L through NR. The largest contributor to expected losses is the North Hills Mall loan (6.2% of the pool), which is secured by a 576,431 square foot (sf) regional lifestyle center located in Raleigh, NC within the Raleigh-Durham-Chapel Hill MSA, referred to as 'The Research Triangle'. The property is anchored by J.C. Penney, Regal Entertainment, REI, and Target (not part of the collateral). There is also a 101,354 sf office component. The 200 room Renaissance Hotel is not part of the collateral. The property has struggled with low cash flow and declining debt service since issuance. Although as of June 2012, the debt-service coverage ratio (DSCR) has shown improvement to 1.17x from 1.06x at year-end (YE) 2011 and 1.20x at issuance. The property is 98.3% occupied as of October 2012. There is approximately 10% of the net rentable scheduled to roll in 2014. Per REIS, as of the third quarter (3Q) 2012, the Raleigh retail market had a vacancy rate of 9.5% with asking rents at $18.57. The average in-line base rents at the property are slightly above market. The next largest contributor to expected losses is the specially-serviced STF Portfolio (1.9%), originally secured at issuance by a portfolio of 19 properties totaling 1.2 million sf located in McAllen, TX, El Paso, TX and Santa Theresa, NM. The loan transferred to special servicing in August 2010 for payment default. In July 2012, the special servicer foreclosed on 17 properties, the remaining two NM properties are expected to be foreclosed in February 2013. The special servicer is in discussions with 9 existing tenants for a renewal of approximately 96,891 sf and three new leases have been signed. There are eight properties currently remaining in the portfolio. The third largest contributor to expected losses is the specially-serviced Baldwin Park Retail asset (1.8%), which is secured by an 182,464 sf retail property located in Orlando, FL. The property is anchored by a Publix, CVS, and other small retail units. The asset transferred into special servicing in June 2010 for payment default. Foreclosure occurred in November 2012. As of December 2012, the property was 73.6% occupied with a DSCR of 0.34x. Per REIS as of the fourth quarter (4Q) 2012, the Orlando retail market had a vacancy rate of 13.7%. The Northeast submarket had vacancy rates of 11.5% and 12.3% for anchored and non-anchored retail. Fitch downgrades and removes from Rating Watch Negative the following two classes: --$219.3 million class A-M to 'Asf' from 'AAAsf'; Outlook Stable; --$35 million class A-MFX to 'Asf' from 'AAAsf'; Outlook Stable. In addition Fitch downgrades and assigns Rating Outlooks or Recovery Estimates (REs) to the following classes as indicated: --$152.6 million class A-J to 'Bsf' from 'BBB-sf'; Outlook Negative; --$31.8 million class B to 'CCCsf' from 'BBsf'; RE 100%; --$25.4 million class C to 'CCCsf' from 'Bsf'; RE 100%; --$28.6 million class D to 'CCsf' from 'CCCsf'; RE 10%; --$22.3 million class E to 'CCsf' from 'CCCsf'; RE 0%; --$22.3 million class F to 'CCsf' from 'CCCsf'; RE 0%; --$25.4 million class G to 'CCsf' from 'CCCsf'; RE 0%; --$35 million class H to 'Csf' from 'CCsf'; RE 0%; --$31.8 million class J to 'Csf' from 'CCsf'; RE 0%; --$28.6 million class K to 'Csf' from 'CCsf'; RE 0%. --$1.6 million class N to 'D' from 'Csf'; RE 0%. Fitch affirms the following classes: --$14 million class A-2 at 'AAAsf'; Outlook Stable; --$208.6 million class A-3 at 'AAAsf'; Outlook Stable; --$991.7 million class A-4 at 'AAAsf'; Outlook Stable; --$73.1 million class A-SB at 'AAAsf'; Outlook Stable; --$281.6 million class A-1A at 'AAAsf'; Outlook Stable; --$31.8 million class L at 'Csf'; RE 0%; --$9.5 million class M at 'Csf'; RE0%; The class A-1 certificates have paid in full. Fitch does not rate the class P, Q, T and NR certificates. Fitch previously withdrew the ratings on the interest-only class X-1 and X-2 certificates. (Caryn Trokie, New York Ratings Unit)
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