OREANDA-NEWS. Fitch Ratings has affirmed nine classes of Institutional Mortgage Capital, commercial mortgage pass-through certificates series 2013-3 (IMSCI 2013-3). A full list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The affirmations and removal of classes F and G from Rating Watch Negative reflect the overall stable performance of the pool (excluding the specially serviced assets). Additionally, the specially serviced assets did not sustain structural damage or loss from the recent Fort McMurray area wildfires. The pool balance has been reduced 12.1% to C$220.1 million from C$250.4 million at issuance with 35 loans remaining. There are no full or partial interest only loans in the pool. Approximately 17.7% of the pool has a scheduled maturity date in late 2017 with an additional 26.5% scheduled maturities in 2018. Of the remaining pool, 90.2% has full or partial recourse to the borrower and/or sponsor.

There were variances from criteria related to classes B and C for which the model output suggested that upgrades were possible. Fitch determined that upgrades are not warranted at this time there remains uncertainty regarding the impact of the downturn in the energy market in Alberta on the performance of the full recourse specially serviced loans. Additionally, the overall pool performance has been stable and there have been no large loan payoffs or any defeased loans.

The three specially serviced loans are backed by multifamily properties in Fort McMurray, Alberta. The loans transferred to special servicing in March 2016 due a significant decline in occupancy stemming from the turmoil in the energy sector. The sponsor and special servicer agreed to a 12-month forbearance agreement. Operations at the property were subsequently affected by the Fort McMurray wildfires in early May 2016 with the city and surrounding area evacuated; however, tenants have subsequently returned as the properties resumed operations. The loan has full recourse to the borrower, sponsor and manager. Potential loan losses may be mitigated by recourse provisions, insurance proceeds and a recovery in the energy markets.

The largest loan of the pool (10.8% of the pool balance) is secured by a 362,577 square foot (sf) enclosed shopping center located in Dollard-des-Ormeaux (Montreal), Quebec. The property is anchored by Canadian Tire and Super C grocery. The pari passu loan is full recourse to the borrowing entity and its owner and is partial recourse to the sponsor.

The second largest loan (9.1%) is secured by the Merivale Mall, a 225,082 sf enclosed shopping center located in Ottawa, Ontario. The property, which was built in 1977 and renovated in 1994, is anchored by Farm Boy and Sport Chek. The pari passu loan is full recourse to the borrowing entity and partial recourse to the sponsor. Discount retailer Marshalls opened in 2015.

The third largest loan (8.8%) is the Shoppers Drug Mart Portfolio which consists of eight cross-collateralized and cross-defaulted loans. Each loan is secured by a retail property fully leased by Shoppers Drug Mart. The portfolio consists of 141,093 sf and is located across Ontario in Ottawa, London, and Windsor. Lease expirations for the portfolio range from 2021 to 2031.

RATING SENSITIVITIES

The Rating Outlook on classes E, F and G are Negative due to the uncertainty regarding the operations and performance of the specially serviced loans in addition to the transaction's total exposure to the volatility of the energy market in Alberta (18.9% of the pool). Stable Outlooks reflect the stable performance of the majority of the pool and continued amortization. Upgrades may occur with improved pool performance and significant pay down or defeasance. Downgrades to the classes are possible should overall pool performance decline.

USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10

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

Fitch affirms and removes the following classes from Rating Watch Negative and assigns a Negative Outlook as indicated:

--$3.1 million class F at 'BBsf'; Outlook Negative;

--$2.5 million class G at 'Bsf'; Outlook Negative.

Fitch affirms the following classes as indicated:

--$7.1 million class A-1 at 'AAAsf'; Outlook Stable;

--$96.4 million class A-2 at 'AAAsf'; Outlook Stable;

--$81.6 million class A-3 at 'AAAsf'; Outlook Stable;

--$5.3 million class B at 'AAsf'; Outlook Stable;

--$8.5 million class C at 'Asf'; Outlook Stable;

--$6.9 million class D at 'BBBsf'; Outlook revised to Stable from Negative;

--$3.8 million class E at 'BBB-sf'; Outlook Negative.

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Fitch does not rate the C$5 million class H and the interest-only class X.