Fitch Upgrades Four Classes of JPMC 2003-CIBC6

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has upgraded four and affirmed six classes of JP Morgan Chase Commercial Mortgage Securities Corp. (commercial mortgage pass-through certificates series 2003-CIBC6

(JPMC 2003-CIBC6). A full list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The upgrades, affirmations and Outlook revisions reflect the transaction's increasing credit enhancement from loan disposals and continuing amortization; significant percentage of defeased collateral (27%); better than expected recovery on a recently fully pre-paid loan secured by a vacant property; and improved performance on a handful of loans in the portfolio. Fitch modeled losses of 9.5% of the remaining pool; expected losses on the original pool balance total 2.4% including $16.7 million in realized losses to date. The portfolio is concentrated with only 17 loans and one real estate owned (REO) asset remaining; the largest loan comprises 31% of the collateral.

While the credit enhancement to classes G through K is high relative to modeled expected loss, Fitch capped the ratings based on the substantial percentage of Fitch Loans of Concern and potential for adverse selection as pool concentration continues to increase. Fitch designated six Fitch Loans of Concern (31.9%), including one specially serviced asset (7.2%).

As of the April 2016 distribution date, the pool's aggregate principal balance has been reduced by 92% to $87 million, from $1.04 billion at issuance. Interest shortfalls are currently affecting classes L through NR.

The largest loan in the portfolio (31% of the pool) is secured by a leasehold interest in a 214,000 square foot single-tenant suburban office building located in Memphis, TN. The property serves as one of three office towers comprising the global headquarters of International Paper Company. The servicer reported year end (YE) 2015 debt service coverage ratio (DSCR) for this amortizing loan was 1.53x. The lease, which has annual rent steps, has an expiration date of Feb. 28, 2027. At Issuance, the lease expiration was Feb. 2017, a few months prior to the Anticipated Repayment Date (ARD) of July 2017. However, the lease was subsequently extended through 2027.

The largest contributor to expected losses is the REO Advance Auto Building, a 231,000 sf office building located in Southfield, MI. The loan originally transferred to the special servicer in March 2013 due to an imminent maturity default. The property became REO in July 2015. The servicer has been working on stabilizing the property prior to marketing it for sale. The most recent servicer reported occupancy was 64.4% with several lease renewals and new leases recently executed.

RATING SENSITIVITIES

The Positive Outlook on class G reflects a possible upgrade to the class should the largest loan payoff in full at its scheduled ARD in July 2017. The Outlooks for the other classes are Stable as no rating changes are anticipated at this time. Further upgrades should be limited due to the concentrated nature of the pool. Downgrades are possible should pool performance decline or further losses be realized.

DUE DILIGENCE USAGE

No third party due diligence was provided or reviewed in relation to this rating action.

Fitch has upgraded the following classes and revised Outlooks as indicated:

--$10.4 million class F to 'AAAsf' from 'Asf'; Outlook Stable;

--$15.6 million class H to 'BBBsf' from 'BBsf'; Outlook to Stable from Positive;

--$7.8 million class K to 'Bsf' from 'CCCsf'; Assign Stable Outlook

--$5.2 million class L to 'CCC' from 'CCsf'; RE 095%;

Fitch has affirmed the following classes and revised Outlooks as indicated

--$8.8 million class D at 'AAAsf'; Outlook Stable;

--$14.3 million class E at 'AAAsf'; Outlook Stable;

--$13 million class G at 'A'; Outlook to Positive from Stable.

--$5.2 million class J at 'BBsf'; Outlook Stable;

--$3.9 million class M at 'CCsf'; RE 0%;

--$1.3 million class N at 'Csf'; RE 0%.

The class A-1, A-2, B, C and X-2 certificates have paid in full. Fitch does not rate the class NR certificates. Fitch previously withdrew the rating on the interest-only class X-1 certificates.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

Counterparty Criteria for Structured Finance and Covered Bonds: Derivative Addendum (pub. 14 May 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744175

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

U.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 Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1002530

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1002530

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/20160414006640/en/

Fitch Ratings
Primary Analyst
Stacey McGovern, +1-212-908-0772
Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Karen Trebach, +1-212-908-0215
Senior Director
or
Media Relations, New York
Sandro Scenga, +1-212-908-0278
[email protected]

Source: Fitch Ratings

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