OREANDA-NEWS. Fitch Ratings has issued a presale report on J. P. Morgan Chase Commercial Mortgage Securities Trust 2016-JP2 commercial mortgage pass-through certificates

Fitch expects to rate the transaction and assign Rating Outlooks as follows:

--$31,322,000 class A-1 'AAAsf'; Outlook Stable;

--$16,213,000 class A-2 'AAAsf'; Outlook Stable;

--$250,000,000 class A-3 'AAAsf'; Outlook Stable;

--$301,524,000 class A-4 'AAAsf'; Outlook Stable;

--$58,379,000 class A-SB 'AAAsf'; Outlook Stable;

--$734,921,000b class X-A 'AAAsf'; Outlook Stable;

--$48,134,000b class X-B 'AA-sf'; Outlook Stable;

--$77,483,000 class A-S 'AAAsf'; Outlook Stable;

--$48,134,000 class B 'AA-sf'; Outlook Stable;

--$41,090,000 class C 'A-sf'; Outlook Stable;

--$86,876,000ab class X-C 'BBB-sf'; Outlook Stable;

--$45,786,000a class D 'BBB-sf'; Outlook Stable;

--$22,306,000a class E 'BB-sf'; Outlook Stable.

The following classes are not expected to be rated:

--$17,610,000a class F;

--$29,349,708a class NR.

A - Privately placed pursuant to Rule 144A.

B - Notional amount and interest-only.

The expected ratings are based on information provided by the issuer as of July 4, 2016.

The certificates represent the beneficial ownership interest in the trust, primary assets of which are 47 loans secured by 78 commercial properties having an aggregate principal balance of $939,196,709 as of the cut-off date. The loans were contributed to the trust by JP Morgan Chase Bank, National Association, Benefit Street Partners CRE Finance LLC, German American Capital Corporation, and Starwood Mortgage Funding VI LLC.

Fitch reviewed a comprehensive sample of the transaction's collateral, including site inspections on 72.9% of the properties by balance and asset summary reviews and cash flow analysis of 83.5% of the pool.

KEY RATING DRIVERS

Leverage Lower than Recent Deals: The transaction has lower leverage than other recent Fitch-rated transactions. The pool's weighted average (WA) Fitch DSCR of 1.20x is better than both the YTD 2016 average of 1.17x and the 2015 average of 1.18x. The pool's WA Fitch LTV of 103.5% is better than both the YTD 2016 average of 107.9% and the 2015 average of 109.3%. Excluding the credit opinion loan, The Shops at Crystals, the Fitch DSCR is 1.18x and the Fitch LTV is 105.8%, which are still slightly better than recent averages.

High-Quality Collateral: Fitch assigned property quality grades of 'A-' or better to 22.4% of the pool and 30.8% of the portion of the pool that was inspected. Properties assigned 'B+' or higher total 56.3% of the pool, or 77.2% of the pool that was inspected. Additionally, no properties were assigned property quality grades below 'B-'.

Concentrated Pool with High SCI: The 10 largest loans account for 54.4% of the pool by balance. This is in line with the YTD 2016 average of 55.4% and greater than the 2015 average of 49.3%. The pool's average concentration resulted in a loan concentration index (LCI) of 401, which falls between the YTD 2016 average of 428, and the 2015 average of 367. The sponsor concentration index (SCI) is 697, which is much higher than the YTD 2016 average of 491 and 2015 average of 410. Two sponsors, Simon Property Group and CIM Commercial Trust Corporation, each compose more than 10% of the pool at 11.8% and 10.8%, respectively.

RATING SENSITIVITIES

For this transaction, Fitch's net cash flow (NCF) was 10.2% below the most recent year's net operating income (NOI; for properties for which a full-year NOI was provided, excluding properties that were stabilizing during this period). Unanticipated further declines in property-level NCF could result in higher defaults and loss severities on defaulted loans and in potential rating actions on the certificates.

Fitch evaluated the sensitivity of the ratings assigned to JPMCC 2016-JP2 certificates and found that the transaction displays average sensitivity to further declines in NCF. In a scenario in which NCF declined a further 20% from Fitch's NCF, a downgrade of the junior 'AAAsf' certificates to 'A-sf' could result. In a more severe scenario, in which NCF declined a further 30% from Fitch's NCF, a downgrade of the junior 'AAAsf' certificates to 'BBB-sf' could result. The presale report includes a detailed explanation of additional stresses and sensitivities on page 13.

DUE DILIGENCE USAGE

Fitch was provided with third-party due diligence information from Ernst & Young, LLP. The third-party due diligence information was provided on Form ABS Due Diligence-15E and focused on a comparison and re-computation of certain characteristics with respect to each of the mortgage loans. Fitch considered this information in its analysis and the findings did not have an impact on the analysis. A copy of the ABS Due Diligence Form-15E received by Fitch in connection with this transaction may be obtained through the link contained on the bottom of the related rating action commentary (RAC).