Fitch Downgrades 1 Distressed Class of BSCMS 2007-PWR17; Affirms 21

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has downgraded one and affirmed 21 classes of Bear Stearns Commercial Mortgage Securities Trust, series 2007-PWR17 (BSCMS 2007-PWR17) commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The affirmations of the investment grade classes are due to sufficient credit enhancements to offset Fitch expected losses.

Fitch modelled losses of 7.31% of the outstanding pool, of which 4.8% are from specially serviced loans. The downgrade to class D is due to increased certainty of losses to the class. Current cumulative interest shortfalls totalling $4.5 million are affecting classes F through J.

As of the July 2015 distribution date, the pool's aggregate principal balance has been paid down by 32.38% to $2.2 billion from $3.26 billion at issuance. Fitch has identified 53 (28.8%) Fitch Loans of Concern (LOC), of which 12 (4.8%) are specially serviced. In addition, there are seven (2.6%) defeased loans within the pool.

The largest contributor to expected losses is a 136,206 sf shopping center located in Tyngsboro, MA, approximately 40 miles northwest of Boston on the border of New Hampshire (0.7%). The loan transferred to special servicing in March 2014 following the loss of its largest tenant, TJ Maxx (18.3% of NRA), which vacated in May 2013 and is now REO. In addition to the largest tenant, the property suffered further from the departure of Trader Joe's and several other small tenants. As of February 2015, the property was 52% occupied as reported by the special servicer.

The next largest contributor to expected losses is a 173,101 sf office building located in Mobile, AL (0.6%). The property became REO in August 2014. Common area improvements have been completed by the special servicer and leasing activity has improved as a result. Property occupancy has increased from 75% to 84.5% in the past nine months.

The third largest contributor to expected losses is a 195,980 sf retail shopping center located in Rochester, PA (0.51%). The loan transferred to special servicing in April 2015. One of the two anchor tenants (Kmart) vacated, reducing occupancy from 100% to 52%. NOI is no longer sufficient to cover debt service.

RATING SENSITIVITIES

Rating Outlooks on classes A-3 through A-1A remain Stable due to increasing credit enhancement and continued paydown. Rating Outlooks on class A-M and A-MFL are Negative due to the uncertainty of recoveries on several specially serviced loans.

DUE DILIGENCE USAGE

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

Fitch has downgraded the following class:

--$24.5 million class D from 'CCsf' to 'Csf'; RE 0%.

Fitch has affirmed the following classes:

--$9.3 million class A-3 at 'AAAsf'; Outlook Stable;

--$33.4 million class A-AB at 'AAAsf'; Outlook Stable;

--$1.2 billion class A-4 at 'AAAsf'; Outlook Stable;

--$236 million class A-1A at 'AAAsf'; Outlook Stable;

--$231 million class A-M at 'AAAsf'; Outlook Negative;

--$95 million class A-MFL at 'AAAsf'; Outlook Negative;

--$269 million class A-J at 'CCCsf'; RE 90%;

--$28.5 million class B at 'CCsf'; RE 0%;

--$44.8 million class C at 'CCsf'; RE 0%;

--$20.4 million class E at 'Csf'; RE 0%;

--$28.5 million class F at 'Csf'; RE 0%;

--$5.0 million 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%;

--$0 class P at 'Dsf'; RE 0%;

--$0 class Q at 'Dsf'; RE 0%.

Fitch does not rate the class S 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 Criteria

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

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

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria (pub. 10 Dec 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=989684

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=989684

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/20150819006186/en/

Fitch Ratings
Primary Analyst
Christopher Bushart, +1-212-908-0606
Senior Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Mary MacNeill, +1-212-908-0785
Managing Director
or
Media Relations
Sandro Scenga, New York, +1-212-908-0278
[email protected]

Source: Fitch Ratings

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