Fitch Upgrades Seven Classes and Affirms Two in BSCMS 2003-TOP12

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has upgraded seven classes and affirmed two classes of Bear Stearns Commercial Mortgage Securities Trust series 2003-TOP12 (BSCMS 2003-TOP12). A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrades follow increasing credit enhancement to the bonds from loans repayments and amortization. Since issuance, the deal has experienced 95.6% in collateral reduction. In the last twelve months, two loans repaid from the trust and contributed $12.1 million in principal paydown.

Four loans are fully defeased, representing 16.4% of the pool. Although the pool is highly concentrated, with the three largest loans comprising 60.2% of the total pool, 14 of the 18 outstanding loans are fully amortizing. As a whole, the pool is considered low leverage, with a weighted-average LTV of 54.7% and a weighted-average debt yield of 40.2%.

The fifth largest loan in the pool, CalSafe, comprises the only major loss expectation in the pool. It is secured by a dark single-tenant retail property in Mountain View, California. The property is fully leased to Safeway through September 2016. Safeway vacated the subject and moved to a newly built building across the street in 2014. A large power center known as San Antonio Center is situated across the street from the subject, the developer of which has subleased the property and is currently using it for storage. Considering both the sublease and master lease are coterminous with the loan's scheduled maturity nine months from now, the vacancy could pose a refinance risk. Mitigating this is the property's location and current debt at $69 psf.

In its modelling of the pool, Fitch utilized conservative stressed cap rates and NOI haircuts. The only loan scheduled to mature in the next twelve months is CalSafe (5.5% of the pool), which is a Fitch Loan of Concern. The pool has $3.3 million of realized losses to date. All of the currently projected losses would be fully contained to the unrated class O.

Including defeased loans, one loan (11.2% of the pool) is scheduled to mature in 2017, twelve loans (66.8% of the pool) in 2018, one loan (1.3% of the pool) in 2019 and three loans (14.9% of the pool) in 2023.

RATING SENSITIVITIES

The Rating Outlook for all but two classes is Stable. The upgrades represent strong credit support to the bonds and deleveraging of the pool; however, additional upgrades in the near term are unlikely given the pool's concentration and property quality. As the deal continues to wind down and loans repay, additional upgrades are possible. To reflect this, the Rating Outlooks for classes M and L has been revised to Positive from Stable.

DUE DILIGENCE USAGE

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

Fitch has upgraded the following classes as indicated:

-- $7.3 million class F to 'AAAsf' from 'AAsf'; Rating Outlook Stable;

-- $7.3 million class G to 'AAAsf' from 'Asf'; Rating Outlook Stable;

-- $5.8 million class H to 'AAsf' from 'BBBsf'; Rating Outlook Stable;

-- $5.8 million class J to 'Asf' from 'BBBsf'; Rating Outlook Stable;

-- $2.9 million class K to 'BBBsf' from 'BBsf'; Rating Outlook Stable;

-- $2.9 million class N to 'Bsf' from 'CCCsf'; Rating Outlook Stable.

Fitch has upgraded the following class and revised the Rating Outlook as indicated:

-- $2.9 million class M to 'BBsf' from 'Bsf'; Rating Outlook to Positive from Stable.

Fitch has affirmed the following class:

-- $4.8 million class E at 'AAAsf'; Rating Outlook Stable.

Fitch has affirmed the following class and revised the Rating Outlook as indicated:

-- $2.9 million class L at 'BBsf'; Rating Outlook to Positive from Stable.

The class A-1, A-2, A-3, A-4, B, C and D certificates have paid in full. Fitch does not rate the class O certificate. 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 Formhttps://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=997550

Solicitation Statushttps://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=997550

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/20160106006672/en/

Fitch Ratings, Inc.
Roxanna Tangen, +1-312-368-3116
Associate Director
70 W. Madison St.
Chicago, IL 60606
or
Committee Chairperson
Mary MacNeill, +1-212-908-0785
Managing Director
or
Media Relations, New York
Sandro Scenga, +1-212-908-0278
[email protected]

Source: Fitch Ratings

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