Fitch Ratings has affirmed 19 classes of J.P. Morgan Chase Commercial Mortgage Securities Trust (JPMCC) commercial mortgage pass-through certificates series 2007-CIBC20. A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The affirmations are due to increasing credit enhancement and continued paydown. As of the January 2015 distribution date, the pool's aggregate principal balance has been reduced by 24.3% to $1.93 billion from $2.54 billion at issuance. Per the servicer reporting, one loan (0.3% of the pool) is defeased. Interest shortfalls are currently affecting classes G through NR.
Fitch modeled losses of 9.5% of the remaining pool; expected losses on the original pool balance total 11.3%, including $105.3 million (4.1% of the original pool balance) in realized losses to date. Fitch has designated 38 loans (47.2%) as Fitch Loans of Concern, which includes five specially serviced assets (11.5%).
The largest contributor to expected losses is the North Hills Mall loan (the third largest and 7.3% of the pool), which is secured by 577,383 square foot (sf) regional lifestyle center located in Raleigh, NC within the Research Triangle. The property is anchored by J.C. Penney, Regal Entertainment, REI, and Fitness Connection with lease expirations of March 2018, May 2020, November 2015, and December 2014; respectively. Fitch was unable to confirm a lease renewal for Fitness Connection; however, the tenant currently remains at the property. The anchor tenant Target is not part of the collateral. In addition to the retail component, there is a 101,423 sf office component. A 200-room Renaissance Hotel that is not part of the collateral opened in 2008 at the eastern end of the center. JC Penney is not listed on the recently published store closure list. As of June 2014, the mall is 99.1% occupied. There is approximately 18% upcoming rollover is 2015 and 3% in 2016. Recent mall sales information was requested and was unavailable from the master servicer. Per REIS as of third quarter 2014 (3Q'14), the Raleigh-Durham retail market had a vacancy rate of 8.8% with asking rents at $19.56.
The next largest contributor to expected losses is the specially-serviced Colony Portfolio VII loan (5.6%), which is secured by five industrial properties and four office properties located in MO, GA, IL, KS, CA, CO. The loan was transferred to special servicing for a second time in September 2014 due to imminent maturity default as the borrower was unable to pay off the loan at the Oct. 1, 2014 maturity date due to leasing difficulties. Per the special servicer, a short-term extension has been negotiated which includes an extension of the maturity date to May 1, 2015; monthly interest-only payments to continue through the extended maturity; payment of budgeted cash flow from Oct. 1, 2014 forward with monthly recon to actual cash flow; partial release provisions from the prior modification; and open to prepay with no premium. As of June 2014, the portfolio is 87.9% occupied down from 96.4% at issuance.
The third largest contributor to expected losses is the specially-serviced STF Portfolio (1.6%), which was originally secured by a portfolio of 19 properties totaling 1.2 million sf located in TX and NM. The loan was transferred to special servicing in August 2010 for payment default and became real estate owned (REO) on June 18, 2013. Per the special servicer, 18 of the 19 properties have been sold. The only remaining property is 2660 Airport Road located in San Theresa, NM which is 100% vacant. The special servicer is proceeding with a hold strategy to allow time for additional lease up of the property.
RATING SENSITIVITIES
Rating Outlooks on classes A-3 through A-J remain Stable due to increasing credit enhancement and continued paydown. Although credit enhancement is increasing for the AM classes, Fitch is closely monitoring the resolution of some of the larger specially serviced assets; should losses be higher than expected or additional assets transfer to special servicing, credit enhancement may be adversely impacted. Additionally, there is the possibility for future interest shortfalls due to the concentration of loan maturities in 2017.
Fitch affirms the following classes but assigns or revises REs as indicated:
--$25.4 million class C at 'CCCsf'; RE 40%;
--$28.6 million class D at 'CCsf'; RE 0%.
Fitch affirms the following classes as indicated:
--$3.6 million class A-3 at 'AAAsf'; Outlook Stable;
--$991.7 million class A-4 at 'AAAsf'; Outlook Stable;
--$37.3 million class A-SB at 'AAAsf'; Outlook Stable;
--$275 million class A-1A at 'AAAsf'; Outlook Stable;
--$219.3 million class A-M at 'Asf'; Outlook Stable;
--$35 million class A-MFX at 'Asf'; Outlook Stable;
--$152.6 million class A-J at 'Bsf'; Outlook Stable;
--$31.8 million class B at 'CCCsf'; RE 100%;
--$22.3 million class E at 'CCsf'; RE 0%;
--$22.3 million class F at 'CCsf'; RE 0%;
--$25.4 million class G at 'CCsf'; RE 0%;
--$35 million class H at 'Csf'; RE 0%;
--$20.3 million 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%.
The class A-1 and A-2 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.
Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 10, 2014 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
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (Aug. 4, 2014);
--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 10, 2014).
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=978175
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