Fitch Downgrades JPMCC 2001-CIBC2; Outlook Negative

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has downgraded three classes of J.P. Morgan Chase Commercial Mortgage Securities Corp. (JPMCC), commercial mortgage pass-through certificates, series 2001-CIBC2. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The downgrades are due to the continued erosion in value of the pool's largest asset, the Collin Creek Mall (93% of the pool), and uncertainty about the timing of its ultimate disposition.

As of the December 2015 distribution date, the pool's aggregate principal balance has been reduced approximately 93.8% to $46.7 million from $961.7 million at issuance. Currently, there are only four assets remaining in the pool, two of which (4.1%) are defeased. Interest shortfalls are affecting classes E through NR with cumulative unpaid interest totaling $3.8 million.

The Collin Creek Mall is secured by the in-line space (332,055 square feet [sf]) of a 1.1 million sf regional mall in Plano, TX. The mall is anchored by Amazing Jake, Macy's, JC Penney, and Sears, all of which are under long-term leases. Dillards, a former anchor, vacated in January 2014 after its lease expired.

The loan transferred to the special servicer in November 2014 due to imminent default. The borrower negotiated a deed in lieu of foreclosure (DIL) and surrendered ownership to the Dillard's box and three undeveloped out-parcels as additional collateral. The DIL was closed in April 2015 and the property has been a real estate owned asset (REO) since.

The Collin Creek Mall is facing significant market competition from several newer shopping malls nearby. As a result, property performance has deteriorated with occupancy falling to 77% as of October 2015, compared to 84% at year-end (YE) 2014 and 94% at YE 2013. The occupancy at issuance was 98%. The property is facing significant near-term lease rollover risk. Leases representing 34.6% of the collateral space expire in 2016, and 10.7% expires in 2017.

The servicer reported year-to-date October 2015 debt service coverage ratio (DSCR) was 0.11x, compared to 0.67x at YE 2014 and 1.75x at underwriting. The special servicer is working to determine a disposition strategy.

RATING SENSITIVITIES

The Rating Outlook on class D remains Negative due to concerns about the final resolution and timing of the disposition of the Collin Creek Mall. If the value of the property continues to deteriorate, future downgrades on the class are possible. The distressed classes may be subject to further downgrades as losses are realized. If recoveries on the mall are better than anticipated some upgrades may be possible.

DUE DILIGENCE USAGE

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

Fitch has downgraded the following classes:

--$2.3 million class D to 'BBBsf' from 'Asf'; Outlook Negative;

--$28.9 million class E to 'Csf' from 'CCsf'; ; RE 35%;

--$12 million class F to 'Csf' from 'CCsf'; RE 0%;

Fitch has affirmed the following class:

--$16.8 million class G at 'Dsf'; RE0%.

Classes A-1 through C, as well as the interest only class X-2, have paid in full. Classes H, J, K, L and M have been depleted due to losses and are affirmed at 'Dsf/RE 0%'. Fitch does not rate NR class certificates. Fitch has previously withdrawn the rating on the Interest-only class X-1.

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 Formhttps://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=997839

Solicitation Statushttps://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=997839

Endorsement 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/20160113006298/en/

Fitch Ratings
Primary Analyst:
Amy Gan, +1-212-908-9143
Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson:
R. Brook Sutherland, +1-312-606-2346
Senior Director
or
Media Relations:
Sandro Scenga, +1-212-908-0278
New York
[email protected]

Source: Fitch Ratings

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