Fitch Ratings Upgrades JP Morgan Series 1997-C5 Class C.Business Editors NEW YORK--(BUSINESS WIRE)--Aug. 27, 2003 Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. upgrades J.P. Morgan Commercial Mortgage Finance Corp.'s mortgage pass-through certificates Pass-Through Certificates (PTCs) are instruments that evidence the ownership of two or more Equipment Trust Certificates. In other words, Equipment Trust Certificates may be bundled into a pass-through structure as a means of diversifying the asset pool and/or increasing the size , series 1997-C5, as follows: -- $56.9 million class C to 'AAA' from 'AA'. The following certificates are affirmed by Fitch: -- $116.9 million class A-2 'AAA'; -- $298.9 million class A-3 'AAA'; -- Interest-only class X 'AAA'; -- $51.7 million class B 'AAA'; -- $51.7 million class F 'BB'. Fitch does not rate the $56.9 million class D, $15.5 million class E, $36.2 million class G, $5.2 million class H or $7.7 million class NR certificates. The rating actions follow Fitch's annual review of the transaction, which closed in September 1997. The upgrades reflect increases in subordination levels due to amortization and loan payoffs. As of the August 2003 distribution date, the pool's aggregate certificate balance has been reduced by 32.5%, to $697.4 million from $1.03 billion at issuance. The pool is well-diversified by balance and geographic locations. Midland Loan Services Inc., the master servicer, collected year-end (YE) 2002 property operating statements operating statement See income statement. for 94% of the pool balance. Based on the information provided, the YE 2002 weighted average debt service coverage ratio The debt service coverage ratio (DSCR), or debt service ratio, is the ratio of net operating income to debt payments on a piece of investment real estate. It is a popular benchmark used in the measurement of an income-producing property’s ability to produce (DSCR DSCR See: Debt-service coverage ratio ) increased to 1.59 times (x), from 1.51x at issuance. As of the August 2003 distribution date, nine loans (3.9%) were delinquent: three (1.6%) 30 days delinquent, one (0.13%) 60 days delinquent, four (1.5%) 90 days delinquent, and one real estate-owned (REO reo Noun NZ a language [Maori] ) (0.6%). Eight loans (2.7%) are being specially serviced, including seven of the delinquent loans (2.5%). Realized losses Realized Loss A loss recognized when assets are sold for a price lower than the original purchase price. Notes: A portion of the realized loss may be applied against a capital gain or realized profit to reduce taxes. total $13 million, or 1.3% of the original pool balance. The largest specially serviced loan (0.59%) is secured by a multifamily property in Indianapolis, IN. The property is currently 33% occupied. A receiver has been appointed and a foreclosure sale foreclosure sale n. the actual forced sale of real property at a public auction (often on the court house steps following public notice posted at the court house and published in a local newspaper) after foreclosure on that property as security under a mortgage or is set for September 2003. The REO loan (0.59%) is secured by an industrial property in Indianapolis, IN. The property is being marketed for sale. Fitch applied various stress scenarios, taking into consideration all of the above concerns including expected losses on some of the loans of concern. Even under these stress scenarios subordination levels remain sufficient to justify the rating actions. Fitch will continue to monitor this transaction, as surveillance is ongoing. |
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion