Fitch Upgrades 1 Class of JPMCC 2005-LDP5

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has upgraded one and affirmed 15 classes of J.P. Morgan Chase Commercial Mortgage Securities Corp. (JPMCC) commercial mortgage pass-through certificates series 2005-LDP5. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

Fitch upgraded class B to 'AAAsf' from 'AAsf' as the result of increased credit enhancement from substantial principal paydown since the prior review. Further upgrades were not warranted given the pool's concentration, with only 30 loans remaining, and the high percentage of specially serviced assets.

As of the February 2016 distribution date, the pool's aggregate principal balance has been reduced by 88.7% to $489.5 million from $4.33 billion at issuance.

Fitch modeled losses of 44.2% of the remaining pool; expected losses on the original pool balance total 6.2%, including $51.1 million (1.2% of the original pool balance) in realized losses to date. Fitch has designated 17 loans (67.3%) as Fitch Loans of Concern, which includes 14 specially serviced assets (58.2%). Interest shortfalls are currently affecting classes K through NR.

The largest contributor to modeled losses is the specially serviced asset, the Hanover Mall (15.7%). The asset is a 706,684 square foot (sf) regional enclosed mall located in Hanover, MA. The property became a real estate owned (REO) asset in February 2010 through foreclosure after originally transferring to the special servicer due to imminent default. Tenants at the property include Sears (18% of net rentable area (NRA), expiring February 2020), Macy's (14%, expiring February 2019), and Wal-Mart (12%, expiring January 2020). The JC Penney store (9%) has closed at the property; however, the tenant is expected to continue to pay rent through its lease expiration in March 2019. Per servicer reporting, economic occupancy stands at 96%, with physical occupancy of 87% as of 1Q 2015.

The next largest contributor to modeled losses is the specially serviced Atlantic Development Portfolio loan (16%), secured by five office complexes and two industrial properties located in Somerset and Warren, NJ. The loan originally transferred to the special servicer in April 2010 due to imminent default and was modified to include an increase in the number of interest-only periods and the release of one property, resulting in $9.6 million in principal paydown. As part of the modification, the borrower also contributed $1 million into a reserve account as new equity. The loan was then transferred back to the master servicer only to return back to the special servicer again in July 2015 after a severe dip in occupancy. Per servicer reporting, the portfolio was 67% occupied as of March 2015. The special servicer is currently reviewing a revised proposal for another modification of the loan.

The third largest contributor to modeled losses is the DRA-CRT Portfolio II loan (21%), which is secured by a portfolio of three cross-collateralized and cross-defaulted office parks. The portfolio contains a total of 30 buildings, of which 21 are located in Orlando, FL (45% of the NRA of the portfolio), six are in Memphis, TN (38%), and three are in Jacksonville, FL (17%). The loan was split into an A note ($78.7 million) and a B note ($25.6 million) and the maturity was extended to November 2019 from October 2012. Per servicer reporting, the net operating income (NOI) debt service coverage ratio (DSCR) dropped to 1.43x as of 1Q 2015 from 1.48x as of year-end 2014. Fitch will continue to monitor this loan for deteriorating performance.

RATING SENSITIVITIES

The Rating Outlooks on classes AJ through G remain Stable as credit enhancement is high and downgrades are not expected. Additional upgrades were not considered due to the pool concentration; high percentage of Fitch Loans of Concern, which includes the 15 specially serviced loans; and the long dated maturities of the remaining non-specially serviced loans. Downgrades to the distressed classes H through Q are possible should additional losses be realized.

DUE DILIGENCE USAGE

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

Fitch has upgraded and revised the Outlook on the following class:

--$26.2 million class B to 'AAAsf' from 'AAsf'; Outlook to Stable from Positive.

Fitch has affirmed the following classes and revised Outlooks as indicated:

--$1.4 million class A-J at 'AAAsf'; Outlook Stable;

--$73.4 million class C at 'Asf'; Outlook to Stable from Positive;

--$42 million class D at 'BBB-sf'; Outlook Stable;

--$21 million class E at 'BBsf'; Outlook Stable;

--$52.5 million class F at 'Bsf'; Outlook Stable;

--$36.7 million class G at 'B-sf'; Outlook Stable;

--$52.5 million class H at 'CCCsf'; RE 40%;

--$42 million class J at 'CCCsf'; RE 0%;

--$63 million class K at 'CCsf'; RE 0%;

--$26.2 million class L at 'Csf'; RE 0%;

--$15.7 million class M at 'Csf'; RE 0%;

--$15.7 million class N at 'Csf'; RE 0%;

--$5.2 million class O at 'Csf'; RE 0%;

--$5.2 million class P at 'Csf'; RE 0%;

--$10.5 million class Q at 'Csf'; RE 0%.

The class A-1, A-2, A-2FL, A-3, A-4, A-SB, A-1A and A-M certificates have paid in full. Fitch does not rate the class NR, HG-1, HG-2, HG-3, HG-4 and HG-5 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. 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=1000304

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1000304

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/20160302006460/en/

Fitch Ratings
Primary Analyst
Zachary Johnson
Associate Director
+1-646-582-4815
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: [email protected]

Source: Fitch Ratings

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