April 11 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings has downgraded two classes and affirmed 21 classes of J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-CIBC13 (JPMCC 2005-CIBC13) commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this press release.
Fitch modeled losses of 15.9% of the remaining pool; expected losses on the original pool balance total 15.8%, including losses already incurred. The pool has experienced $122.2 million (4.5% of the original pool balance) in realized losses to date. Fitch has designated 64 loans (38%) as Fitch Loans of Concern, which includes 13 specially serviced assets (19.9%). The downgrade to class AM is due to continued uncertainty related to the disposition of the specially serviced assets.
The ratings of the super senior classes are expected to remain stable as these classes are expected to continue to receive paydown. The rating on the class AM may be subject to future downgrade if losses are greater than expected. Distressed classes (those rated 'CCC' and below) are expected to be subject to further downgrades as losses are realized.
As of the March 2013 distribution date, the pool's aggregate principal balance has been reduced by 28.7% to $1.94 billion from $2.72 billion at issuance. Per the servicer reporting, one loan (0.3% of the pool) has defeased since issuance. Interest shortfalls are currently affecting classes C through NR.
The largest contributor to expected losses is the real estate owned (REO) DRA-CRT Portfolio (6.9% of the pool). The portfolio, which was originally secured by 16 office properties, now consists of only two Rockville, MD located properties. While the 14 other properties were sold in the last quarter of 2012, the special servicer is working to stabilize the remaining two properties before marketing them for sale. Recent valuations of these properties were significantly below the remaining loan balance.
The next largest contributor to Fitch modeled losses is a defaulted loan (5.4%) secured by The Shore Club, a 322-room luxury hotel property located in the South Beach area of Miami, FL. The loan transferred to special servicing in September 2009 due to imminent default. Property performance has been well below expectations at issuance. The special servicer is currently pursuing foreclosure; however, ongoing litigation has delayed the process.
The third largest contributor to expected losses is the Investcorp Portfolio (2.9%). While three properties are owned by the trust; one property is still going through the foreclosure process. The portfolio is currently comprised of one industrial and three office properties located in suburban Philadelphia, PA.
The special servicer is working to stabilize the four properties before marketing them for sale. A fifth property was recently sold at auction with proceeds applied to paydown outstanding advances and expenses.
Fitch downgrades the following classes as indicated:
--$272.1 million class AM to 'BBBsf' from 'Asf'; Outlook Negative;
--$23.8 million class C to 'Csf' from 'CCsf'; RE 0%.
Fitch affirms the following classes but assigns or revises REs as indicated:
--$187 million class AJ at 'CCCsf'; RE 65%.
Fitch affirms the following classes as indicated:
--$188.7 million class A-1A at 'AAAsf'; Outlook Stable;
--$5.8 million class A-2 at 'AAAsf'; Outlook Stable;
--$8.5 million class A-2FL at 'AAAsf'; Outlook Stable;
--$206.4 million class A-3A1 at 'AAAsf'; Outlook Stable;
--$25 million class A-3A2 at 'AAAsf'; Outlook Stable;
--$751.7 million class A-4 at 'AAAsf'; Outlook Stable;
--$56 million class A-SB at 'AAAsf'; Outlook Stable;
--$2.7 million class A-2FX at 'AAAsf'; Outlook Stable;
--$54.4 million class B at 'CCsf'; RE 0%;
--$44.2 million class D at 'Csf'; RE 0%;
--$34 million class E at 'Csf'; RE 0%;
--$37.4 million class F at 'Csf'; RE 0%;
--$30.6 million class G at 'Csf'; RE 0%;
--$10.5 million 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%.
The class A-1 certificates have paid in full. Fitch previously withdrew the ratings on the interest-only class X-1 and X-2 certificates.
Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 18, 2012 report, 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is available at 'www.fitchratings.com' under the following headers: Structured Finance >> CMBS >> Criteria Reports