Fitch Downgrades 1 Distressed Class of BSCMS 2007-PWR17; Affirms 21
KEY RATING DRIVERS
The affirmations of the investment grade classes are due to sufficient credit enhancements to offset Fitch expected losses.
Fitch modelled losses of 7.31% of the outstanding pool, of which 4.8% are from specially serviced loans. The downgrade to class D is due to increased certainty of losses to the class. Current cumulative interest shortfalls totalling \\$4.5 million are affecting classes F through J.
As of the July 2015 distribution date, the pool's aggregate principal balance has been paid down by 32.38% to \\$2.2 billion from \\$3.26 billion at issuance. Fitch has identified 53 (28.8%) Fitch Loans of Concern (LOC), of which 12 (4.8%) are specially serviced. In addition, there are seven (2.6%) defeased loans within the pool.
The largest contributor to expected losses is a 136,206 sf shopping center located in Tyngsboro, MA, approximately 40 miles northwest of Boston on the border of New Hampshire (0.7%). The loan transferred to special servicing in March 2014 following the loss of its largest tenant, TJ Maxx (18.3% of NRA), which vacated in May 2013 and is now REO. In addition to the largest tenant, the property suffered further from the departure of Trader Joe's and several other small tenants. As of February 2015, the property was 52% occupied as reported by the special servicer.
The next largest contributor to expected losses is a 173,101 sf office building located in Mobile, AL (0.6%). The property became REO in August 2014. Common area improvements have been completed by the special servicer and leasing activity has improved as a result. Property occupancy has increased from 75% to 84.5% in the past nine months.
The third largest contributor to expected losses is a 195,980 sf retail shopping center located in Rochester, PA (0.51%). The loan transferred to special servicing in April 2015. One of the two anchor tenants (Kmart) vacated, reducing occupancy from 100% to 52%. NOI is no longer sufficient to cover debt service.
Rating Outlooks on classes A-3 through A-1A remain Stable due to increasing credit enhancement and continued paydown. Rating Outlooks on class A-M and A-MFL are Negative due to the uncertainty of recoveries on several specially serviced loans.
DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action.
Fitch has downgraded the following class:
--\\$24.5 million class D from 'CCsf' to 'Csf'; RE 0%.
Fitch has affirmed the following classes:
--\\$9.3 million class A-3 at 'AAAsf'; Outlook Stable;
--\\$33.4 million class A-AB at 'AAAsf'; Outlook Stable;
--\\$1.2 billion class A-4 at 'AAAsf'; Outlook Stable;
--\\$236 million class A-1A at 'AAAsf'; Outlook Stable;
--\\$231 million class A-M at 'AAAsf'; Outlook Negative;
--\\$95 million class A-MFL at 'AAAsf'; Outlook Negative;
--\\$269 million class A-J at 'CCCsf'; RE 90%;
--\\$28.5 million class B at 'CCsf'; RE 0%;
--\\$44.8 million class C at 'CCsf'; RE 0%;
--\\$20.4 million class E at 'Csf'; RE 0%;
--\\$28.5 million class F at 'Csf'; RE 0%;
--\\$5.0 million class G at 'Dsf'; RE 0%;
--\\$0 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%;
--\\$0 class O at 'Dsf'; RE 0%;
--\\$0 class P at 'Dsf'; RE 0%;
--\\$0 class Q at 'Dsf'; RE 0%.
Fitch does not rate the class S certificates. Fitch previously withdrew the ratings on the interest-only class X-1 and X-2 certificates.