Fitch Takes Various Actions on JPMCC 2005-CIBC12

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has upgraded one class, downgraded one class and affirmed 15 classes of J.P. Morgan Chase Commercial Mortgage Securities Corp., series 2005-CIBC12. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The affirmations and upgrade reflect Fitch's expectation for the successful repayment of the majority of loans with upcoming maturity dates. 23 non-specially serviced loans, representing 57.9% of the current pool balance, are scheduled to mature by Aug. 1, 2015. These loans report a weighted-average debt service coverage ratio (DSCR) and a weighted-average debt yield of 2.37x and 12.8%, respectively. The downgrade follows increased base case loss projections for loans in special servicing, some of which transferred after the last Fitch rating action.

Fitch modelled losses of 12% of the remaining pool; expected losses on the original pool balance total 10.4%, including $157.1 million (7.3% of the original pool balance) in realized losses to date. The transaction has experienced 73.6% of collateral reduction since issuance, with 43 of the original 198 loans remaining in the pool. To date, realized losses have depleted the original balances of classes F through NR and further reduced the original principal balance of class E by 30.1%. Interest shortfalls currently reach up to class D.

The largest contributor to expected losses is a 289,000 square foot (sf) office property in Atlanta, GA. At securitization, IBM occupied 100% of the net rentable area (NRA) on a lease that expired in 2013. The tenant's lease renewal resulted in IBM giving back approximately 17% of its space and a significant reduction in the rental rate. The property became real estate owned (REO) in March 2014 and is currently under contract to be sold.

The second largest contributor to expected losses is a 261,000 sf retail center located in South Brunswick, NJ. The loan transferred to special servicing in August 2014 for payment default and later failed to payoff at maturity. The borrower has reportedly rejected requests to place a receiver at the property and the special servicer is tracking the loan for foreclosure. An appraisal dated November 2014 valued the property at $30.2 million, which is just above the loan's outstanding principal balance of $32.9 million.

The loan that represents the third largest contributor to expected loss is currently not in special servicing, but is being flagged for the servicer's watchlist. The loan is secured by an enclosed mall in Steubenville, OH, just west of the Ohio River. The anchor tenants are Sears, J.C. Penney, Macy's (not collateral), Wal-Mart and Carmike Cinemas. The net operating income (NOI) has experienced an average decline of 3.3% over the last three years, with the YE2014 DSCR reported to be 0.96x. Both Sears and J.C. Penney have lease expirations in 2016, and although there are several extension options available to both tenants and minimal upcoming in-line roll otherwise, the low DSCR and tertiary market could make this loan a challenge to refinance. Fitch will continue to closely monitor this loan.

RATING SENSITIVITIES

Rating Outlooks on classes A-4 and A-M are Stable as they are already rated 'AAAsf'. The Rating Outlooks on classes A-J and B are also Stable. Although credit enhancement to class A-J has improved and is likely to begin receiving principal in the coming months, the rating has been capped at 'Asf' given the class has previously experienced interest shortfalls. Additional downgrades to the distressed classes (those rated below 'Bsf') are expected as losses are realized.

Fitch upgrades the following class and assigns the Rating Outlook as indicated:

--$162.5 million class A-J to 'Asf' from 'BBBsf', Outlook Stable.

Fitch downgrades the following class and assigns the Recovery Estimate (RE) as indicated:

--$32.5 million class D to 'Csf' from 'CCCsf', RE 70%.

In addition, Fitch affirms the following classes:

--$30 million class A-4 at 'AAAsf', Outlook Stable;

--$216.7 million class A-M at 'AAAsf', Outlook Stable;

--$43.3 million class B at 'Bsf', Outlook Stable;

--$18.9 million class C at 'CCCsf', RE 100%;

--$50 million class UHP at 'B-sf', Outlook Stable;

--$0 class E at 'Dsf', RE 0%;

--$0 class F at 'Dsf', RE 0%;

--$0 class G at 'Dsf', RE 0%;

--$0 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, A-2, A-3A1, A-3A2, A-3B and A-SB certificates have been paid in full. Fitch does not rate the Class NR certificate. Fitch withdrew the ratings on the interest-only Class X-1 and X-2 certificates.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Global Structured Finance Rating Criteria (pub. 31 Mar 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864268

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria (pub. 10 Dec 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=986993

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=986993

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE '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 MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150625006285/en/

Fitch Ratings
Primary Analyst
R. Brook Sutherland
Senior Director
+1-312-606-2346
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Committee Chairperson
Mary MacNeill
Managing Director
+1-212-908-0785
or
Media Relations
Sandro Scenga, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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