Fitch Ratings has upgraded 7 classes and affirmed four classes of Bear Stearns Commercial Mortgage Securities Trust 2004-TOP16 commercial mortgage pass-through certificates series. A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The upgrades are a result of increasing credit enhancement from better than expected recoveries on liquidated loans since the prior review.
Fitch modeled losses of 10.4% of the remaining pool; expected losses on the original pool balance total 1.6%, including $12 million (1% of the original pool balance) in realized losses to date. Fitch has designated five loans (38.3%) as Fitch Loans of Concern, which includes three specially serviced assets (33.2%).
As of the December 2015 distribution date, the pool's aggregate principal balance has been reduced by 94.4% to $64.2 million from $1.16 billion at issuance. Per the servicer reporting, three loans (11.3% of the pool) are defeased. Interest shortfalls are currently affecting classes L through P.
The largest contributor to expected losses is the specially-serviced Wal-Mart- Carlyle Plaza loan (6.6% of the pool), which is secured by a 126,846 SF single-tenant retail center located in Belleville, IL, approximately 20 miles southwest of St. Louis. The loan transferred to special-servicing in August 2013 for maturity default. The sole tenant, Wal-Mart, vacated the property in 2010 and continued paying rent until their lease expiration, which was coterminous with the loan maturity. Additionally, the special servicer reports there may be environmental issues associated with an adjacent property and is waiting on the State's position to determine its course of action.
The next largest contributor to expected losses is the specially-serviced Port Richey Plaza loan (3.6%), which is secured by a 22,170 SF retail center that is shadow anchored by a Wal-Mart Super Center located in Port Richey, FL. The loan was transferred to special-servicing in July 2014 for imminent default after the borrower had been delinquent on payments. The special servicer reports the occupancy was 80% as of October 31, 2014.
RATING SENSITIVITIES
Rating Outlooks on classes D through H are Stable due to increasing credit enhancement from continued paydown from defeasance, New York City cooperative loans and low leveraged loans over the next two years.
Fitch upgrades the following classes and assigns Outlooks and REs as indicated:
--$2.6 million class D to 'AAAsf' from 'Asf'; Outlook Stable;
--$15.9 million class E to 'AAAsf' from 'BBBsf'; Outlook Stable;
--$10.1 million class F to 'Asf' from 'BBsf'; Outlook Stable;
--$11.6 million class G to 'BBsf' from 'Bsf'; Outlook to Stable from Negative;
--$10.1 million class H to 'Bsf' from 'CCCsf'; Outlook Stable;
--$2.9 million class J to 'CCCsf' from 'CCsf'; RE 100%;
--$4.3 million class K to 'CCsf' from 'Csf'; RE 100%;
Fitch affirms the following classes and assigns REs as indicated:
--$5.8 million class L at 'Csf'; RE 35%;
--$928,092 class M at 'Dsf'; RE 0%;
--$0 class N at 'Dsf'; RE 0%;
--$0 class O at 'Dsf'; RE 0%.
The class A-1, A-2, A-3, A-4, A-5, A-6, B, C 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.
Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 10, 2014 report, 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is available at 'www.fitchratings.com' under the following headers:
Structured Finance >> CMBS >> Criteria Reports
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (Aug. 4, 2014);
--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 10, 2014).
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=965895
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.
