April 24, 2014 / 1:11 PM / in 4 years

RPT-Fitch Affirms JPMCC 2013-FL3

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April 24 (Reuters) - (The following statement was released by the rating agency)

Fitch Ratings has affirmed nine classes of J.P. Morgan Chase Commercial Mortgage Securities Trust(JPMCC) commercial mortgage pass through certificates, series 2013-FL3. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The affirmations and Stable Outlooks reflect the stable to improving performance of the underlying pool. The certificates, which follow a sequential-pay structure, represent the beneficial interest in a pool of four commercial mortgage floating-rate loans backed by 82 properties. The pool is concentrated by property type with two of the loans backed by hotel properties (64.2% of the pool), while the remaining two loans are secured by a portfolio of office properties and retail bank branches, and an office property. Trust-level leverage remains low with weighted average pooled Fitch’s stressed LTV and DSCR of 66.70% and 1.60x, respectively, compared to 69.90% and 1.44x at issuance. All of the loans have additional debt in the form of mezzanine debt and/or a B-note, with positions that are fully subordinate and subject to standard inter-creditor agreements.

The largest loan in the pool is the Eagle Hospitality Portfolio (52.5%), which is collateralized by 13 full-service hotel properties located across nine states and Puerto Rico. The hotels are all flagged with national brands including Embassy Suites, Marriot, Hilton, and Hyatt. As of year-end (YE) December 2013 occupancy reported at 75.3%, average daily rate (ADR) at $134.24, and revenue per available room (RevPAR) at $101. This compares to YE December 2012 at 74.5% occupancy, $130.09 ADR, and $96.90 RevPAR. The portfolio net operating income for YE 2013 was relatively flat, with approximately a 1% increase over YE 2012. Total portfolio reserves reported at $19.8 million as of April 2014.

RATING SENSITIVITIES

The Rating Outlook for all classes remains Stable. No rating actions are anticipated unless there are material changes in property performance or cash flow. The collateral performance has remained stable and is performing as expected at issuance.

Fitch has affirmed the following classes:

--$63,000,000 class A-1 at ‘AAAsf’; Outlook Stable;

--$217,300,000 class A-2 at ‘AAAsf’; Outlook Stable;

--$63,000,000* class X-A at ‘AAAsf’; Outlook Stable;

--$442,000,000* class X-CP at ‘BB-sf’; Outlook Stable;

--$442,000,000* class X-EXT at ‘BB-sf’; Outlook Stable;

--$86,300,000 class B at ‘AA-sf’; Outlook Stable;

--$60,500,000 class C at ‘A-sf’; Outlook Stable;

--$44,900,000 class D at ‘BBB-sf’; Outlook Stable;

--$33,000,000 class E at ‘BB-sf’; Outlook Stable.

*Interest-only class

Additional information on Fitch’s criteria for analyzing large loans within a single borrower U.S. CMBS transaction is available in the Sept. 20, 2013 report, ‘Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions’, which is available at ‘www.fitchratings.com’ under the following headers: Structured Finance >> CMBS >> Criteria Reports

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