Fitch expects to rate the transaction and assign Rating Outlooks as follows:
* Notional and interest-only
The expected ratings are based on information provided by the issuer as of
The certificates represent the beneficial ownership in the issuing entity, the primary asset of which is one loan having an aggregate principal balance of approximately
KEY RATING DRIVERS
High Quality Office Collateral in Prime Manhattan Location: The
Historical Occupancy and Credit Tenancy: The property has been well-occupied historically, with occupancy between 95%-99% since 1995. The property is 98% leased as of
Major Tenant Subleases and Rollover Risk: The two largest tenants, JPMorgan and Sumitomo (80.3% of NRA) both roll in 2021, as well as two small tenants (a total of 82% of NRA). JPMorgan subleases approximately 600,000 square feet (sf) or 46.4% of its space, (34% of total building NRA) to a multiple subtenants. Sumitomo has recently expanded through a sublease, and significant funds for leasing will be available, if needed, through a cash flow sweep described in further detail in the presale report.
Fitch Leverage: The
Fitch found that the property could withstand a 71.5% decline in value and an approximate 49.9% decrease in the Fitch net cash flow (NCF) prior to experiencing
Fitch performed several stress scenarios in which the Fitch NCF was stressed. Fitch determined that a 65.4% reduction in Fitch's NCF would cause the notes to break even at a 1.0x DSCR, based on the actual debt service.
Fitch evaluated the sensitivity of the ratings for class A (rated 'AAAsf') and found that a 10% decline in Fitch NCF would result in a one category downgrade, while a 32% 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'.
Additional information is available at 'www.fitchratings.com'.
-- 'Global Structured Finance Rating Criteria' (
-- 'Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions' (
-- 'Counterparty Criteria for Structured Finance Transactions and Covered Bonds' (
-- 'Rating Criteria for U.S. Commercial Mortgage Servicers' (
Global Structured Finance Rating Criteria - Effective from
Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions
Counterparty Criteria for Structured Finance and Covered Bonds
Rating Criteria for U.S. Commercial Mortgage Servicers
Secondary and Surveillance Analyst
Source: Fitch Ratings
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