Fitch Upgrades 6 Classes of Morgan Stanley Capital I Trust 2005-TOP 19
KEY RATING DRIVERS
The upgrades are due to increased credit enhancement as the pool deleverages from paydown. Fitch modeled losses of 4.6% of the remaining pool; expected losses on the original pool balance total 3.1%, including \\$7.2 million (0.6% of the original pool balance) in realized losses to date. Fitch has designated 28 (17.1%) Fitch Loans of Concern, which includes two specially serviced assets (1.3%).
As of the February 2015 distribution date, the pool's aggregate principal balance has been reduced by 45.9% to \\$664.5 million from \\$1.23 billion at issuance. Per the servicer reporting, 20 loans (12.5% of the pool) are defeased. Interest shortfalls are currently affecting classes N through P.
The largest contributor to Fitch modeled losses (3.1% of the pool) is secured by a 84,430 sf retail property located in Fairfield, CT. While the servicer reported occupancy and debt service coverage ratio (DSCR) were 100% and 1.66x, respectively, as of year-end (YE) 2013; over 30% of leases expire in 2016. The loan is scheduled to mature in June 2015. Per the master servicer, the borrower received a payoff demand statement at the beginning of the year.
The next largest contributor to modeled losses (1.3% of the pool) is secured by two hotels located in Rockville, MD: a 257-unit Crowne Plaza and a 231-unit Sleep Inn. Occupancy and debt service coverage ratio (DSCR) were reported at 58.9% and 0.74x, respectively, as of YE 2013. No update was provided by the master servicer regarding the loan's impending June 2015 maturity.
The third largest contributor to expected losses is a specially-serviced asset (0.7% of the pool), a 44,215 sf office property located in Port St. Lucie, FL. The loan transferred to the special servicer in 2013 and has been real estate owned (REO) since February 2014. As of November 2014, the property was 66% occupied with a servicer reported DSCR well below 1.00x. Per the special servicer, the property is expected to be marketed for sale this year.
RATING SENSITIVITIES
The Stable Outlooks on classes A-4A through F reflect increased credit enhancement and continued pay down. Approximately 84% of the pool is scheduled to mature in 2015; the collateral has a weighted average Fitch stressed LTV of 72.5%. The distressed classes are subject to further downgrades should additional losses be realized.
Fitch upgrades the following classes as indicated:
--\\$87.5 million class A-J to 'AAsf' from 'Asf'; Outlook Stable;
--\\$23 million class B to 'Asf' from 'BBB-sf'; Outlook Stable;
--\\$12.3 million class C to 'BBBsf' from 'BBsf'; Outlook Stable;
--\\$15.4 million class D to 'BBsf' from 'Bsf'; Outlook Stable;
--\\$12.3 million class E to 'Bsf' from 'CCCsf'; Outlook Stable Assigned;
--\\$9.2 million class F to 'Bsf' from 'CCCsf'; Outlook Stable Assigned.
Fitch affirms the following classes as indicated:
--\\$374.8 million class A-4A at 'AAAsf'; Outlook Stable;
--\\$88.1 million class A-4B at 'AAAsf'; Outlook Stable;
--\\$9.2 million class G at 'CCCsf'; RE 100%;
--\\$10.7 million class H at 'CCCsf'; RE 100%;
--\\$3.1 million class J at 'CCsf'; RE 90%.
--\\$3.1 million class K at 'CCsf'; RE 0%;
--\\$6.1 million class L at 'CCsf'; RE 0%;
--\\$1.5 million class M at 'Csf'; RE 0%;
--\\$3.1 million class N at 'Csf'; RE 0%;
--\\$3.1 million class O at 'Csf'; RE 0%.
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 ratings on the interest-only class X-1 and X-2 certificates.
Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 10, 2014 report, 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is available at 'www.fitchratings.com' under the following headers:
Structured Finance >> CMBS >> Criteria Reports
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