Fitch Affirms PCMT 2003-PWR1
KEY RATING DRIVERS
The affirmations of the distressed ratings indicate the weak performance of the remaining loan and already incurred losses. One loan remains in the pool, which is scheduled to mature in 2020.
As of the June 2016 distribution date, the pool's aggregate principal balance has been reduced by 97% to $29 million from $960 million at issuance. Interest shortfalls are currently affecting classes G through P. The trust has incurred 5.1% in realized losses.
The remaining loan in the pool, Brandywine Office Building & Garage loan (100% of the pool), is secured by a 405,844 square foot (sf) office building with a 660 parking space garage located in Wilmington, DE. The loan recently underwent two modifications in 2016 and 2011, which included a $15.1 million write-off of principal; an interest rate reduction with periodic rate increases until December 2017; and interest-only payments until maturity May 2020. The property's performance has continued to suffer due to declining occupancy and deteriorating cash flows. Occupancy is 37% as of March 2016.
RATING SENSITIVITIES
Ratings on class F and G are not likely to change unless performance of the asset improves significantly or upon disposition of the asset as losses are realized.
DUE DILIGENCE USAGE
No third-party due diligence was provided or reviewed in relation to this rating action.
Fitch affirms the following classes and revises REs as indicated:
--$8.8 million class F at 'CCCsf'; RE 25%;
--$12 million class G at 'Csf'; RE 0%;
--$8.2 million class H at 'Dsf'; RE 0%;
--$0 class J at 'Dsf'; RE 0%;
--$0 class K at 'Dsf'; RE 0%;
--$0 class L at 'Dsf'; RE 0%;
--$0 class M at 'Dsf'; RE 0%;
--$0 class N at 'Dsf'; RE 0%.
The class A-1, A-2, B, C, D, E and X-2 certificates have paid in full. Fitch does not rate the class P certificates. Fitch previously withdrew the rating on the interest-only class X-1 certificates.
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