News Column

Fitch Upgrades Three Classes of JPMC 2002-CIBC5

May 29, 2014

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has upgraded three classes of JP Morgan Chase Commercial Mortgage Securities Corporation's (JPMC) commercial mortgage pass-through certificates, series 2002-CIBC5. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrades are the result of increased credit enhancement due to scheduled amortization and defeasance. The upgrade of class G to 'AAAsf' reflects the high amount of defeased collateral and the expected payoff of the class from scheduled principal. While class H also benefits from defeasance, ratings were capped at 'Asf' due to the possibility of interest shortfalls to the class should loans transfer to the special servicer as the deal becomes more concentrated.

Fitch modeled losses of 3.7% of the remaining pool; expected losses on the original pool balance total 2.5%, including losses already incurred (2.3% of the original pool balance). As of the May 2014 distribution date, the pool's aggregate principal balance has been reduced by 94.8% to $51.7 million from $1 billion at issuance. There are 12 loans remaining, three of which are defeased (38.8%), and two (14.9%) have been identified as Fitch loans of concern. There are no loans in special servicing. Interest shortfalls are currently affecting classes L and NR.

RATING SENSITIVITIES

Ratings on classes G, H, and J are expected to remain stable, given their senior position in the capital structure. The upgrades of classes H and J were limited due to increased concentration of the remaining loans in the pool and the associated greater risk of adverse selection. If the collateral performance deteriorates, future downgrades to classes K and L are possible.

The largest remaining loan is secured by a 384,763 square foot (sf) industrial property in Las Vegas, NV (27.1%). The distribution facility is 100% leased to a single tenant - Southern Wine & Spirits of America, on a triple-net (NNN) lease until year-end 2020. The loan is fully amortizing. As of third quarter 2013, the servicer reported DSCR was 1.47x, which is in line with performance from issuance.

The second largest remaining non-defeased loan is secured by a 118,298 sf retail property in Bedford, TX (13.8%). The center's anchor, Tom Thumb Grocery, occupies 41% of the net rentable area (NRA) until August 2017. All tenants are under NNN leases. The performance of the property remains below expectation with a debt service coverage ratio (DSCR) below 1.0x since 2011. As of year-end 2013, the servicer-reported DSCR was 0.88x, compared to 0.88x at YE2012, 0.8x at YE2011 and 1.00x at YE2010. The poor performance is due to the weak market and rent concessions to maintain tenancy. As of first quarter 2014 rent roll, the property was 91.6% occupied, improved from 87.9% a year ago.

Fitch upgrades the following classes as indicated:

--$5 million class G to 'AAAsf' from 'AA-sf'; Outlook Stable;

--$18.8 million class H to 'Asf' from 'BBB+sf'; Outlook Stable;

--$12.6 million class J to 'BBBsf' from 'BBB-sf'; Outlook Stable.

Fitch affirms the following classes as indicated:

--$5 million class K at 'BBsf'; Outlook Negative;

--$5 million class L at 'Bsf'; Outlook Negative;

--$5.4 million class M at 'Dsf'; RE 0%;

--$0 class N at 'Dsf'; RE 0%.

The classes A-1, A-2, B, C, D, E, F and the interest only X-2 certificates have paid in full. Fitch does not rate the class NR certificates. Fitch previously withdrew the rating on the interest-only class X-1 certificates.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 20, 2014);

--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 11, 2013).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748821

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724961

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=832192

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.



Fitch Ratings

Primary Analyst

Amy Gan

Director

+1-212-908-9143

Fitch Ratings, Inc.

33 Whitehall St

New York, NY 10004

or

Committee Chairperson

Mary MacNeill

Managing Director

+1-212-908-0785

or

Media Relations:

Sandro Scenga, +1-212-908-0278 (New York)

sandro.scenga@fitchratings.com


Source: Fitch Ratings


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