OREANDA-NEWS. December 15, 2015. Fitch Ratings has affirmed 17 classes of Bear Stearns Commercial Mortgage Securities Trust (BSCMS) Series 2007-TOP26. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS
Affirmations are based on the pool's overall stable performance and loss projections. Fitch modeled losses of 9.4% of the remaining pool; expected losses on the original pool balance total 10.7%, including \\$80.4 million (3.8% of the original pool balance) in realized losses to date. Fitch has designated 33 loans (25.5%) as Fitch Loans of Concern, which includes four specially serviced assets (1.3%), as well as three loans in the top 15 (14.8%) including the largest loan in the transaction (One AT&T Center, 7.3%). Interest shortfalls are currently affecting classes E through P.

As of the November 2015 distribution date, the pool's aggregate principal balance has been reduced by 26.5% to \\$1.55 billion from \\$2.11 billion at issuance. Per the servicer reporting, 14 loans (6.7% of the pool) are defeased.

The largest contributor to modelled losses is the One AT&T Center loan (7.3%), which is secured by a 1.4 million square foot (sf) office building located in downtown St. Louis, MO. The property is 100% leased by AT&T until Sept. 30, 2017. Although the servicer has stated that the borrower has not been notified by the tenant, AT&T has reportedly vacated the building consolidating their employees to other area locations. It is anticipated that rent will be paid through the lease expiration date as the lease is guaranteed by AT&T, Inc. (rated 'A-'; Outlook Stable by Fitch). Per the loan documents, the tenant is required to notify the servicer if they intend to vacate 12 months before lease expiration. The lender can institute a cash flow sweep and hyper amortize the loan until the anticipated repayment date (ARD) and thereafter. The loan has an ARD of Jan. 1, 2017 and a scheduled maturity date of Jan. 1, 2037. Fitch expects that the loan may not pay off at the ARD given the property's potential vacancy and weakness in the submarket.

The next largest contributor to modelled losses is the Viad Corporate Center loan (3.6%), which is secured by a 476,424 sf office building located in Phoenix, AZ. Previously with the special servicer, the loan was transferred back to the master servicer in August 2011 after being modified in May 2011. Terms of the modification include a principal write-down of \\$9 million to \\$56 million, and an \\$8 million capital expense escrow for tenant improvements, leasing commissions and repairs. Performance continues to improve at the property. Occupancy increased to 74% as of year-end (YE) 2014 from 62% as of YE 2013. The servicer reported net operating income (NOI) debt service coverage ratio (DSCR) increased to 0.46x as of YE 2014 from 0.41x YE 2013. The six month June 2015 DSCR was 0.92x.

The third largest contributor to modelled losses is a real estate owned (REO) 216 room, full-service hotel located in Uwchlan Township, PA (0.7%). The loan transferred to special servicing in January 2014 due to imminent default after the borrower stated it would no longer fund operating shortfalls. Servicer-reported NOI DSCR fell slightly to 0.36x as of YE 2014 from 0.40x as of YE 2013.

RATING SENSITIVITIES
Rating Outlooks on classes A-4 and A-1A remain Stable due to increasing credit enhancement and continued expected paydown. Additional stresses were applied to One AT&T Center assuming significant losses if the property remains vacant. The Rating Outlook on class A-M remains Negative as the class may be subject to a downgrade if there is further deterioration of the pool's cash flow performance and/or if the AT&T Center continues to deteriorate or is transferred to special servicing. Additional downgrades to the distressed classes (those rated below 'B') are expected as losses are realized on specially serviced loans.

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

Fitch affirms the following classes and assigns REs as indicated:

--\\$947.5 million class A-4 at 'AAAsf'; Outlook Stable;
--\\$111.1 million class A-1A at 'AAAsf'; Outlook Stable;
--\\$210.6 million class A-M at 'AAsf'; Outlook Negative;
--\\$160.6 million class A-J at 'CCCsf'; RE 95%;
--\\$42.1 million class B at 'CCsf'; RE 0%;
--\\$18.4 million class C at 'CCsf'; RE 0%;
--\\$29 million class D at 'Csf'; RE 0%;
--\\$15.8 million class E at 'Csf'; RE 0%;
--\\$12.2 million 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 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.