Fitch Upgrades 4 Classes of MSDW 2003-TOP9

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January 7, 2016 4:49 PM EST

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has upgraded four classes and affirmed two classes of Morgan Stanley Dean Witter Capital I Trust (MSDWC) commercial mortgage pass-through certificates series 2003-TOP9. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrades are due to increased credit enhancement from the continued paydown of the pool. Fitch modeled losses of 23.6% of the remaining pool; expected losses on the original pool balance total 1%, including $3.3 million (0.3% of the original pool balance) in realized losses to date. Fitch has designated two loans (48.3%) as Fitch Loans of Concern, which includes one specially serviced asset (20.3%).

As of the December 2015 distribution date, the pool's aggregate principal balance has been reduced by 97% to $32.5 million from $1.08 billion at issuance. Of the 13 loans remaining, 10 loans (44% of the pool) are fully amortizing, although five of these loans are single tenanted properties. Per the servicer reporting, two loans (2% of the pool) are defeased. Interest shortfalls are currently affecting class O.

The largest contributor to modelled losses is the largest loan (28% of the pool) and is secured by a 121,618 square foot (sf) neighborhood shopping center in North Highlands, CA. The center is anchored by a Raley's grocery store (50% of GLA). Occupancy as of June 2015 was 83%. The servicer reported net operating income (NOI) debt service coverage ratio (DSCR) decreased to 1.04x as of year-end (YE) 2014 from 1.11x at YE 2013. The loan was previously in special servicing from April 2011 to February 2012. During this period, the loan was modified to include a maturity date extension and $500,000 in principal forgiveness. The loan has been designated a Fitch Loan of Concern and will continue to be monitored ahead of its new scheduled maturity date of November 2016.

The next largest contributor to modelled losses is the specially serviced loan, which is secured by a 93,354 sf retail property located in Indianapolis, IN. The loan was transferred to the special servicer in September of 2012 due to imminent default. Since then, the loan has been modified to include a maturity date extension to May 2017. Property performance continues to improve and the loan is in the process of being transferred back to the master servicer.

RATING SENSITIVITIES

The Rating Outlooks on all classes are Stable, due to increasing credit enhancement and overall stable collateral performance. Although credit enhancement remains high relative to the rating category for some classes, further upgrades were limited due to increasing pool concentration. Fitch ran additional stresses when considering upgrades. Future upgrades may be warranted as the pool continues to pay down. Downgrades are possible if there is a material economic or asset level event which impairs performance of the remaining loans.

DUE DILIGENCE USAGE

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

Fitch upgrades the following classes and assigns REs as indicated:--$4 million class J to 'AAAsf' from 'Asf'; Outlook Stable;--$5.4 million class K to 'Asf' from 'BBBsf'; Outlook Stable;--$2.7 million class M to 'Bsf' from 'CCCsf'; Outlook Stable Assigned;--$2.7 million class N to 'CCCsf' from 'CCsf'; RE 100%.

Fitch affirms the following classes as indicated:--$4.8 million class H at 'AAAsf'; Outlook Stable;--$5.4 million class L at 'BBsf'; Outlook Stable.

The class A-1, A-2, B, C, D, E, F, G and X-2 certificates have paid in full. Fitch does not rate the class O certificates. Fitch previously withdrew the rating on the interest-only class X-1 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=997599Solicitation Statushttps://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=997599Endorsement 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.

Fitch Ratings
Primary Analyst
Zachary Johnson
Associate Director
+1-646-582-4815
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
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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