Fitch Takes Various Actions on BSCMS 2003-TOP10
October 07 2015 - 5:03PM
Business Wire
Fitch Ratings has upgraded three classes, affirmed two classes,
and downgraded one distressed class of Bear Stearns Commercial
Mortgage Securities Trust series 2003-TOP 10. A detailed list of
rating actions follows at the end of this press release.
KEY RATING DRIVERS
The upgrades reflect the high credit enhancement of the senior
classes as a result of principal pay down, stable loss expectations
from Fitch's previous rating action, and the low leverage of the
remaining non-specially serviced loans.
The downgrade to class N reflects the expectation of inevitable
losses associated with the transaction's specially serviced loan,
Power Plaza Shopping Center (34.2%).
As of the September 2015 distribution date, the pool's aggregate
principal balance has been reduced by 97.8% (including 0.7% of
realized losses) to $27.1 million from $1.212 billion at issuance.
Cumulative interest shortfalls in the amount of $13,989 are
currently affecting class O.
Of the original 171 loans, 13 remain; the largest is in special
servicing. The non-specially serviced loans have maturity dates in
2017 (20.7%), 2018 (9.4%), 2022 (9.4%) and 2023 (26.2%). Of the
remaining pool 60.7% fully amortizes. Two loans (15.4%) are
defeased. One will mature in 2017 (12.4%) and the other in 2018
(3.0%).
Fitch modeled losses of 23.6% of the remaining pool; expected
losses of the original pool are 1.3% including losses already
incurred to date (0.7%). The non-specially serviced, non-defeased
loans have a weighted average LTV of 59% and DSCR of 1.89x.
The specially serviced loan, Power Plaza Shopping Center is
collateralized by an 112,155 sf retail center located in Vacaville,
CA. The property is shadow anchored by a Sam's Club and Wal-Mart.
The loan was previously modified in late 2013 after the property
experienced a drop in occupancy after a new center opened in close
proximity to the subject. The sponsor reported the center's
occupancy at 73% as of December 2014 and continues to work on the
renewal of several current tenants. The loan was scheduled to
mature in September 2014 but the sponsor approached the special
servicer about extending the loan for a second time. The special
servicer is currently evaluating the property and has begun the
foreclosure process. Fitch will continue monitor the loan as more
information becomes available on the special servicer's workout
strategy.
RATING SENSITIVITIES
Fitch's loss assumptions assumed a stressed value on the
specially serviced loan. The ratings of classes H through K are
expected to remain stable. The rating on classes L and M may be
impacted by the disposition of the specially serviced asset.
Additional upgrades are possible as principal paydown increases the
classes credit enhancement and losses are less than anticipated.
Downgrades could occur if losses are greater than expected from the
specially serviced loan, pool performance deteriorates, or loans
default at maturity.
DUE DILIGENCE USAGE
No third-party due diligence was provided or reviewed in
relation to this rating action.
Fitch has upgraded the following classes:
--$4.5 million class J to 'AAAsf' from 'BBBsf'; Outlook
Stable;
--$6.1 million class K to 'BBBsf' from 'BBsf'; Outlook
Stable;
--$4.5 million class L to 'Bsf' from 'CCCsf'; Outlook Stable
assigned.
Fitch has affirmed the following classes:
--$2.6 million class H at 'AAAsf'; Outlook Stable;
--$3.0 million class M at 'CCCsf'; RE 100%.
Fitch has downgraded the following class and revised the
recovery estimate as indicated:
--$3.0 million class N to 'Csf' from 'CCsf'; RE 15% from RE
0%.
Fitch does not rate class O. The ratings on class X-1 and X-2
were previously withdrawn. Class A-1, A-2, B, C, D, E, F, and G
have paid in full.
Additional information is available at www.fitchratings.com.
Applicable Criteria
Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952
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=991961
Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=991961
Endorsement Policy
https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31
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Fitch RatingsPrimary AnalystJay BullieAssociate
Director1-312-368-2079Fitch Ratings, Inc.70 W. Madison
StreetChicago, IL 60602orCommittee ChairpersonMary MacNeillManaging
Director+1-212-908-0785orMedia RelationsSandro Scenga, New York,
+1-212-908-0278sandro.scenga@fitchratings.com