OREANDA-NEWS. Fitch Ratings has assigned the following ratings and Rating Outlooks to 245 Park Avenue Trust 2017-245P Commercial Mortgage Pass-Through Certificates.

--$260,000,000 class A 'AAAsf'; Outlook Stable;

--$260,000,000a class X-A 'AAAsf'; Outlook Stable;

--$39,000,000a class X-B 'NR'; Outlook Stable;

--$39,000,000 class B 'AA-sf'; Outlook Stable;

--$31,000,000 class C 'A-sf'; Outlook Stable;

--$50,000,000 class D 'BBB-sf'; Outlook Stable;

--$90,000,000 class E 'BBsf'; Outlook Stable;

--$30,000,000b class HHR 'BBsf'; Outlook Stable.

(a) Notional amount and interest-only.

(b) Horizontal credit risk retention interest representing at least 5.0% of the fair market value of the non-residual classes in the aggregate (as of the closing date).

Since Fitch published its expected ratings on May 11, 2017, the class X-B changed from 'AA-sf' to 'NR' based on the final deal structure.

The certificates represent the beneficial interests in the mortgage loan securing the fee interest in a 1,723,093 square foot (sf), 44-story office tower located at 245 Park Avenue 46th and 47th streets in New York, NY. Proceeds of the loan were used to acquire the property and pay closing costs. The certificates will follow a sequential-pay structure.

KEY RATING DRIVERS

High-Quality Office Collateral in a Prime Manhattan Location: The 245 Park Avenue property is a 44-story Class A office building located on an entire block bound by Park Avenue, Lexington Avenue and 47th and 48th streets in the Grand Central office submarket of Midtown Manhattan. Fitch assigned a property quality grade of 'A-'.

Historical Occupancy and High-Quality Tenancy: The property was 91.2% occupied as of Feb. 28, 2017 and has recorded average occupancy of 95.1% since 2007. The property serves as a headquarters for Societe Generale, Major League Baseball, Angelo Gordon, and RaboBank. Tenants with investment-grade credit ratings account for 65.1% of the properties base rental revenue.

Acquisition by Institutional Sponsorship: The loan is funding the acquisition of the subject property for $2.21 billion by HNA Group (HNA). HNA, based in China, is a global Fortune 500 company with interests across a diverse array of sectors.

Rollover Risk and Departure of Major League Baseball (MLB): MLB is the second largest tenant at the property, occupying 12.6% of net rentable area (NRA). MLB expires in October 2022 but has announced their intention to relocate in 2019. In total, 29.3% of NRA expires in 2022 with an additional 21.8% of NRA expiring in 2026, one year prior to loan maturity.

Fitch Leverage: The $500.0 million mortgage loan has a Fitch debt service coverage ratio (DSCR) and loan to value (LTV) of 1.08x and 81.1%, respectively and debt of $696 psf based on the current NRA.

RATING SENSITIVITIES

Fitch performed a break-even analysis to determine the amount of value deterioration the pool could withstand prior to $1 of loss on the total debt and 'AAAsf' rated class. The break-even value declines were performed using both the appraisal values at issuance and the Fitch-stressed value.

Based on the as-is appraisal value of $2.21 billion, break-even values represent declines of 45.7% and 66.5% for the total debt and 'AAAsf' class, respectively.

Similarly, Fitch estimated total debt and 'AAAsf' break-even value declines using the Fitch-adjusted property value of $1.5 billion, which is a function of the Fitch net cash flow (NCF) and a stressed capitalization rate, in relation to the appropriate class balances. The break-even value declines relative to the total debt and 'AAAsf' balances are 18.9% and 50.0%, respectively, which correspond to equivalent declines to Fitch NCF, as the Fitch capitalization rate is held constant.

Fitch evaluated the sensitivity of the ratings for class A and found that a 10% decline in Fitch's implied NCF would result in a one-category downgrade, while a 31% decline would result in a downgrade to below investment grade.

The Rating Sensitivity section in the presale report includes a detailed explanation of additional stresses and sensitivities. Key Rating Drivers and Rating Sensitivities are further described in the accompanying presale report. The presale report is available to all investors on Fitch's web site 'www. fitchratings. com' or by clicking on the link.

DUE DILIGENCE USAGE

Fitch was provided with third-party due diligence information from Ernst & Young, LLP. The third-party due diligence information was provided on ABS Due Diligence Form-15E and focused on a comparison and re-computation of certain characteristics with respect to the mortgage loan and related mortgaged properties in the data file. Fitch considered this information in its analysis, and the findings did not have an impact on our analysis.

REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS

A description of the transaction's representations, warranties and enforcement mechanisms (RW&Es) that are disclosed in the offering document and which relate to the underlying asset pool is available by accessing the appendix referenced under 'Related Research' below. The appendix also contains a comparison of these RW&Es to those Fitch considers typical for the asset class as detailed in the Special Report titled 'Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions,' dated May 31, 2016.