Fitch Affirms BSCMT 2006-TOP24

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed 15 classes and downgraded one distressed class of Bear Stearns Commercial Mortgage Securities Trust commercial mortgage pass-through certificates series 2006-TOP24 (BSCMT 2006-TOP24). A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The affirmations reflect expected continued paydown of the senior classes due to scheduled amortization and the pool's upcoming 2016 maturity schedule (34.1% matures through June and the remaining 62.7% matures by October). The downgrade to class C reflects realized losses sustained by the class in October 2015. Fitch modeled losses of 9.4% of the remaining pool; expected losses on the original pool balance total 13.3%, including $117.7 million (7.7% of the original pool balance) in realized losses to date. Fitch has designated 35 loans (16.0%) as Fitch Loans of Concern, which includes two specially serviced assets (2.4%).

As of the November 2015 distribution date, the pool's aggregate principal balance has been reduced by 39.9% to $922.1 million from $1.53 billion at issuance. Per the servicer reporting, seven loans (5.1% of the pool) are defeased. Interest shortfalls are currently affecting classes B through P.

The largest contributor to expected losses remains a 1.1 million square foot (sf) 42-story class A office tower (20.2%) located in Portland, OR. As of September 2015, the property was 95.3% occupied. The largest tenant, U.S. Bancorp (rated 'AA-'/'F1+'/Outlook Stable by Fitch), leases 25.7% of the space under multiple leases, all of which were renewed in July 2015 for 10 years at rental rates that are approximately 50% lower on a per square foot basis than what was previously in place.

The next largest contributor to expected losses remains a 379,596 sf class A office property (7.5%) located in Herndon, VA (approximately 25 miles west of Washington D.C.). Per the June 2015 rent roll, the property was 82.9% occupied solely by Lockheed Martin (rated 'A-'/Outlook Stable by Fitch) through two leases. The master servicer recently confirmed the tenant will exercise its five-year extension option for 60.4% of space scheduled to expire in May 2016. The remaining space is scheduled to expire in February 2018.

RATING SENSITIVITIES

The Stable Rating Outlook on classes A-4 and A-M reflect increasing credit enhancement as a result of continued paydown. Downgrades to class A-J could occur if losses are greater than expected from the specially serviced loans, pool performance deteriorates, or loans default at maturity.

DUE DILIGENCE USAGE

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

Fitch has affirmed the following classes:

--$625.5 million class A-4 at 'AAAsf'; Outlook Stable;--$153.5 million class A-M at 'Asf'; Outlook Stable;--$101.7 million class A-J at 'CCCsf'; RE 65%;--$28.8 million class B at 'Csf'; RE 0%;--$0 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%.

Fitch has downgraded the following class:--$12.7 million class C to 'Dsf' from 'Csf'; RE 0%.

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 is available at www.fitchratings.com.

Applicable CriteriaGlobal Structured Finance Rating Criteria (pub. 06 Jul 2015)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952U.S. and Canadian Fixed-Rate Multiborrower CMBS Surveillance and U.S. Re-REMIC Criteria (pub. 13 Nov 2015)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=873395

Additional DisclosuresDodd-Frank Rating Information Disclosure Formhttps://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=995838Solicitation Statushttps://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=995838Endorsement Policyhttps://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20151202006402/en/

Fitch Ratings
Tiffany Pierce
Associate Director
+1-212-908-9107
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Mary MacNeill
Managing Director
+1-212-908-0785
or
Media Relations
Sandro Scenga, New York, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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