OREANDA-NEWS. Fitch Ratings has affirmed 19 classes of Morgan Stanley Capital I Trust, commercial mortgage pass-through certificates, series 2007-TOP27 (MSCI 2007-TOP27). A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The affirmations reflect the relatively stable pool performance and the sufficient credit enhancement relative to Fitch-modeled loss expectations. Fitch modeled losses of 6.2% of the remaining pool; expected losses on the original pool balance total 9.2%, including $136 million (4.9% of the original pool balance) in realized losses to date. Fitch has designated 32 loans (14.3%) as Fitch Loans of Concern, which includes one specially serviced asset (1.3%).

As of the July 2016 distribution date there are 171 loans remaining of the 234 loans and the pool's aggregate principal balance has been reduced by 31.3% to $1.98 billion from $2.77 billion at issuance. Per the servicer reporting, 15 loans (10.1% of the pool) are defeased. Interest shortfalls are currently affecting classes E through P. 87.2% of the pool matures in 2017, of which 85.9% matures in the second and third quarter 2017. 59.1% of the pool is full interest-only.

The largest contributor to expected losses is the Parkshore Plaza 1 loan (2.2%), which is secured by a four-building 269,254 square foot (sf) office complex located in Folsom, CA. Verizon Wireless, who occupied three of the buildings which total 191,512 sf (71% of net rentable area) reduced its space to 59,828 sf when the lease expired in June 2015. Occupancy as of March 2016 was 59% and the year-end 2015 Net Operating Income (NOI) debt service coverage area (DSCR) was 0.76x. CommonWealth REIT purchased the buildings in 2011 from a joint venture of McCarthy Cook & Co. and JP Morgan & Co. The loan matures in May 2017.

The next largest contributor to expected losses is the specially-serviced Towne Square Mall asset (1.3% of the pool), which is a 438,605 sf regional mall located in Owensboro, KY. The loan transferred to special servicing in February 2015 due to imminent payment default and the foreclosure sale was completed in February 2016 and the property is real estate owned (REO). The collateral (357,355 sf) consists of in-line space, and anchors JC Penney and Sears, with non-collateral anchor Macy's. Sears vacated their 122,136 sf space though their lease extends until September 2016. Additionally, with Sears vacating 16 other tenants will have the option to exercise their co-tenancy clauses. The occupancy as of March 2016 was 57% and the DSCR as of September 2015 was 0.79x.

The third largest contributor to expected losses is the Residence Inn - Herndon loan (1.4%), which is secured by a 168 key extended stay hotel located in Herndon, VA. In December 2015 the property came under new management with Crescent Hotels and Resorts taking over for Hospitality Partners. NOI DSCR dropped to 1.26x at year-end 2015 from 1.56x at year-end 2014 mainly due to an increase in operating expenses. The March 2016 NOI DSCR was 0.75x; occupancy as of March 31, 2016 was 60%. The loan is current, and the maturity date is in June 2017.

The transaction also includes a non-pooled trust component secured by the leased fee of 330 West 34th Street, a 46,412 sf parcel of land ground leased on a triple-net basis to Vornado Realty Trust until December 2021. Vornado has been the only tenant at the property since 1986 and is currently in its first extension option, with four options totaling 128 years remaining. The parcel is improved with an 18-story, 636,915 sf office building with retail at street level.

RATING SENSITIVITIES

The Rating Outlooks on classes A-4, A-M, A-MFL, and A-1A remain Stable due to the classes' seniority, increasing credit enhancement, and continued paydown of the classes. The Outlook on class A-J remains Negative due to the potential for higher losses on Towne Square Mall and Parkshore Plaza 1. The remaining classes are distressed and will see further downgrades as losses are realized.

DUE DILIGENCE USAGE

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

Fitch affirms the following classes:

--$219.8 million class A-1A at 'AAAsf'; Outlook Stable;

--$1 billion class A-4 at 'AAAsf'; Outlook Stable;

--$172.3 million class A-M at 'AAAsf'; Outlook Stable;

--$100 million class A-MFL at 'AAAsf'; Outlook Stable;

--$190.6 million class A-J at 'BBsf'; Outlook Negative;

--$54.5 million class B at 'CCCsf'; RE 80%.

--$30.6 million class C at 'CCsf'; RE 0%;

--$30.6 million class D at 'Csf'; RE 0%;

--$20.5 million 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 O at 'Dsf'; RE 0%;

--$50.2 million class AW34 at 'AAAsf'; Outlook Stable.

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