Fitch Affirms MSCI 2008-TOP29; Outlook Stable

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has affirmed all rated classes of Morgan Stanley Capital I Trust (MSCI), series 2008-TOP29. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The affirmations are the result of stable pool performance since Fitch's last rating action. Fitch modeled losses of 5.4% of the remaining pool. Expected losses of the original pool are at 5%, including losses realized to date. Fitch designated 26 loans (24.2% of the pool balance) as Fitch Loans of Concern. There are no loans in special servicing as of the November 2015 remittance. Of the remaining pool, approximately 81% is partial or full-term interest-only, which limits deleveraging of the senior and mezzanine classes.

The pool's aggregate principal balance has been reduced by approximately 23.4% (including 0.9% in realized losses) to $945 million from $1.23 billion at issuance. Two loans are defeased (4% of the pool). Interest shortfalls are affecting the non-rated class P as of November 2015.

The largest contributor to modeled losses is a loan secured by a 329,160 square foot (sf) retail property located in Broadview, IL (3.3% of the pool balance). The property lost a Sports Authority and is 71% occupied as of the servicer-provided June 2015 rent roll. Tenants at the property include anchor Home Depot (lease expiration in 2025), Marshalls and PetSmart. The center is shadow-anchored by a Super Target. Although occupancy and cash flow are down, there are strong recovery prospects due to tenancy and location.

The second-largest contributor to Fitch modeled losses is a 98,772 sf office property (2.3% of the pool) located in Valencia, CA. Cash flow had significantly declined after the largest tenant vacated; however, the borrower has filled some of the space and is now approximately 91% occupied as of the June 2015 rent roll.

The third-largest contributor to modeled losses is a modified mortgage loan (1.9% of the pool) secured by a retail property located in Scottsdale, AZ. Previously, the asset was specially serviced as the former grocery anchor went dark. Whole Foods, the guarantor, continues to pay rent on the dark space. Other major tenants include Sports Chalet and Mega Furniture.

RATING SENSITIVITIES

The Outlooks for classes A-4 through E are expected to remain Stable unless additional loans transfer to special servicing coupled with an increase in expected losses. Less than 1% of the pool is scheduled to reach its maturity date or anticipated repayment date (ARD) before 2017. Downgrades to the distressed classes are possible should pool performance deteriorate.

DUE DILIGENCE USAGE

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

Fitch has affirmed the following ratings and revised Outlooks as follows:

--$557.4 million class A-4 at 'AAAsf'; Outlook Stable;

--$66.4 million class A-4FL at 'AAAsf'; Outlook Stable;

--$123.4 million class A-M at 'AAAsf'; Outlook Stable;

--$72.5 million class A-J1 at 'AAsf'; Outlook Stable;

--$20.1 million class B at 'Asf'; Outlook to Stable from Negative;

--$10.8 million class C at 'BBBsf'; Outlook to Stable from Negative;

--$21.6 million class D at 'BBsf'; Outlook to Stable from Negative;

--$12.3 million class E at 'Bsf'; Outlook to Stable from Negative;

--$13.9 million class F at 'CCCsf'; RE 100%;

--$13.9 million class G at 'CCCsf', RE 45%;

--$10.8 million class H at 'CCCsf', RE 0%;

--$1.5 million class J at 'CCsf', RE 0%;

--$4.6 million class K at 'CCsf', RE 0%;

--$1.5 million class L at 'Csf', RE 0%;

--$1.5 million class M at 'Csf', RE 0%;

--$4.6 million class N at 'Csf', RE 0%;

--$4.6 million class O at 'Csf', RE 0%.

Fitch does not rate class P, which has been reduced to $3.8 million from $15.2 million due to realized losses. Classes A-1, A-2, A-3 and A-AB are paid in full. Fitch previously withdrew the rating on the interest-only class X.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

U.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 Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=996150

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=996150

Endorsement Policy

https://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/20151207006384/en/

Fitch Ratings
Primary Analyst
Jeffrey Diliberto
Director
+1-312-368-3268
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Committee Chairperson
Mary MacNeill
Managing Director
+1-212-908-0785
or
Media Relations
Sandro Scenga, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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