OREANDA-NEWS. Fitch Ratings has downgraded one class, upgraded one class, and affirmed 11 classes of Morgan Stanley Capital I Trust commercial mortgage pass-through certificates series 2005-TOP17. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrade to class B reflects sufficient credit enhancement of the class relative to expected losses and the class seniority. In addition, the Coventry Mall asset (formerly 70% of the pool) was disposed in May 2016 for losses that were less than expected. The downgrade to class C reflects expected losses from the specially serviced asset which are likely to impact the class. The affirmations of the remaining classes reflect realized losses incurred. The pool is concentrated with only 11 loans remaining, of which nine (54.1%) are fully amortizing and mature in 2019 through 2024. Fitch modeled losses of 13% of the remaining pool; expected losses on the original pool balance total 1.5%, including $11.4 million (1.2% of the original pool balance) in realized losses to date. Fitch has designated three loans (52.9%) as Fitch Loans of Concern, which includes one specially serviced asset (20.5%).

As of the June 2016 distribution date, the pool's aggregate principal balance has been reduced by 97.6% to $23.6 million from $980.8 million at issuance. No loans are defeased. Interest shortfalls are currently affecting classes D through P.

The largest contributor to expected losses is the specially-serviced asset (20.5% of the pool), which is secured by a 145-key Hampton Inn located in Augusta, GA, roughly 140 miles east of Atlanta. The loan matured in December 2014, but an extension was granted through March 2016. The borrower was granted the extension to convert the property into a Red Roof Inn after the Hampton Inn franchise agreement expired in March 2016. However, the borrower failed to pay off the loan and a court appointed receiver took control of the property in July 2016 in preparation for foreclosure. The receiver is overseeing the conversion of the property to a Red Roof Inn. A foreclosure sale date has not yet been scheduled.

The largest loan in the pool (25.4%) is secured by a 230,600 square foot (sf) warehouse/distribution center located in Weston, FL. The subject had been 100% occupied by Circuit City until the company filed for bankruptcy in 2008. A new lease was signed with a logistics company to occupy 34% of the space in late 2014. The tenant has been gradually expanding in the space and will occupy 100% of the building starting September 2016. As of March 2016, the debt service coverage ratio (DSCR) and occupancy were reported to be 1.70x and 72%, respectively. The balloon loan matures in November 2017.

The third largest loan in the pool (16.8%) is secured by a 54,220 sf anchored retail property located in Lawrenceville, GA, approximately 27 miles northwest of Atlanta. The subject is anchored by LA Fitness (76% of net rentable area through October 2018) and is located directly south of Sugarloaf Mills, which is a 1.2 million sf enclosed mall anchored by Bass Pro Shops, Burlington Coat Factory, Saks Off Fifth and AMC Theaters. As of year-end 2015, the property was reported to be 91% occupied. The DSCR for the same period was reported to be 1.20x. The loan is fully amortizing and matures in December 2024.

RATING SENSITIVITIES

The Rating Outlook on class B has been revised to Stable from Negative. Although the credit enhancement will increase with continued paydown, Fitch has concerns with adverse selection as there are only 11 loans remaining. Therefore, a rating cap of 'BBsf' is considered appropriate for this concentrated pool. Fitch does not foresee negative rating migration for class B unless there is material economic change to the remaining loans. The distressed class C, however, is subject to a further downgrade as losses are realized.

DUE DILIGENCE USAGE

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

Fitch downgrades the following classes and revises the Recovery Estimates (RE) as indicated:

--$7.4 million class C to 'Csf' from 'CCsf'; RE 70%.

Fitch upgrades the following classes and revises the Rating Outlook as indicated:

--$14.6 million class B to 'BBsf' from 'Bsf'; Outlook to Stable from Negative.

Fitch affirms the following classes:

--$1.6 million class D at 'Dsf'; RE 0%;

--$0 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%.

The class A-1, A-2, A-3, A-4, A-AB, A-5 and A-J certificates have paid in full. Fitch does not rate the class P certificates. Fitch previously withdrew the ratings on the interest-only class X-1 and X-2 certificates.