Fitch Upgrades 4 Classes of BSCMSI 2005-Top20

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has upgraded four classes and affirmed 11 classes of Bear Stearns Commercial Mortgage Securities Trust (BSCMS) commercial mortgage pass-through certificates series 2005-Top20. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERSThe upgrades reflect the increase in credit enhancement due to significant loan paydown since Fitch's last rating action. Fitch modeled losses of 17% of the remaining pool; expected losses on the original pool balance total 3.8%, including $54.1 million (2.6% of the original pool balance) in realized losses to date. Fitch has designated six loans (26%) as Fitch Loans of Concern (FLOC), which includes five specially serviced assets (15%).

As of the February 2016 distribution date, the pool's aggregate principal balance has been reduced by 92.8% to $147.5 million from $2.1 billion at issuance. The pool is highly concentrated with only 16 of the original 223 loans remaining in the transaction, and the largest loan representing 55.2% of the pool. Per the servicer reporting, there is one defeased loan (2.9%). Interest shortfalls are affecting classes H through Q. The remaining non-specially serviced loans mature in September 2016 (one loan; 11.7%), September 2017 (one loan; 55.2%), plus five loans maturing in 2020 (5%) and four loans in 2025 (13.5%).

The largest loan in the pool is the Lakeforest Mall - A Note (55.2% of the pool), secured by 402,625 square feet (sf) of inline space in a 1.1 million sf regional mall in Gaithersburg, MD. Non-collateral anchors include Sears, Macy's, JC Penney, and Lord & Taylor. In-line tenant sales reported at $292 per square foot (psf) for 2014; tenant sales for 2015 were not provided. The September 2015 rent roll reported occupancy at 85%, a slight decline from 93% reported in December 2014. The September 2015 year to date (YTD) net operating income (NOI) debt service coverage ratio (DSCR) reported at 1.63x, compared to 1.88x at year-end (YE) 2014.

The loan had previously transferred to special servicing in July 2010 for maturity default. The maturity date has since been extended twice to July 2011, and again to September 2017. In August 2012, the loan was modified into an A Note and B Note, and the property was sold to a new sponsor while in special servicing. The purchaser assumed the A Note and the B Note was written off for a full loss. The A Note, currently $81.4 million, has remained current under the modified terms.

The second largest loan in the pool is secured by a 86,618 sf suburban office property in Seattle, WA (11.7%). The property recently incurred a major vacancy when the former largest tenant (92% of the net rentable area) vacated at the end of the lease term in October 2015. Prior to the tenant vacancy, the property was 100% occupied and NOI DSCR reported at 2.21x as of June 2015. Fitch has identified the loan as a FLOC due to the occupancy concerns coupled with the upcoming loan maturity in September 2016. The loan has been amortizing since issuance, and remains current as of the February 2016 payment date.

The largest loan in special servicing is secured by a 71,757 sf retail center located in Meza, AZ (6.3%). The property has experienced cash flow issues since 2012 from tenant vacancy, with occupancy declining to 72% as of May 2015 from 83% at YE 2012. The loan transferred to special servicing in May 2015 due to imminent default. The loan matured in September 2015, and the borrower has been unable to secure financing. A receiver was appointed in January 2016, and foreclosure is anticipated in second quarter of 2016.

RATING SENSITIVITIESThe Rating Outlooks on classes B through F are considered Stable due to sufficient credit enhancement and continued paydown. Although credit enhancement on these classes is high, Fitch remains concerned with the increasing concentrations, as well as some performance issues experienced by the two largest loans. Distressed classes (those rated below 'B') may be subject to further downgrades as additional losses are realized.

DUE DILIGENCE USAGENo third party due diligence was provided or reviewed in relation to this rating action.

Fitch has upgraded the following classes:

--$12.4 million class B to 'AAAsf' from 'AAsf'; Outlook Stable;--$20.7 million class C to 'AAsf' from 'AAsf'; Outlook Stable;--$15.5 million class D to 'Asf' from 'BBBsf'; Outlook Stable;--$28.5 million class E to 'Bsf' from 'BBsf'; Outlook Stable.

Fitch affirms the following classes:

--$18.1 million class F at 'Bsf'; Outlook Stable;--$18.1 million class G at 'CCsf'; RE 100%;--$23.3 million class H at 'Csf'; RE 40%.--$10.7 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%;--$0 class O at 'Dsf'; RE 0%;--$0 class P at 'Dsf'; RE 0%;--$0 class LF at 'Dsf'; RE 0%.

The class A-1, A-2, A-3 A-AB, A-4A, A-4B, and A-J certificates have paid in full. Fitch does not rate the class Q certificates. Fitch previously withdrew the rating on the interest-only class X certificates.

Additional information is available at www.fitchratings.com.

Applicable CriteriaGlobal Structured Finance Rating Criteria (pub. 06 Jul 2015)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952U.S. and Canadian Fixed-Rate Multiborrower CMBS Surveillance and U.S. Re-REMIC Criteria (pub. 13 Nov 2015)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=873395

Additional DisclosuresDodd-Frank Rating Information Disclosure Formhttps://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1000669Solicitation Statushttps://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1000669Endorsement Policyhttps://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/20160309006259/en/

Fitch Ratings
Primary Analyst
Benson Thomas
Director
+1-212-908-0645
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Britt Johnson
Senior Director
+1-312-606-2341
or
Media Relations
Sandro Scenga, New York, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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