NEW YORK--(BUSINESS WIRE)--Fitch Ratings has issued a presale report on the J.P. Morgan Chase Commercial Mortgage Securities Trust, Series 2014-C18 commercial mortgage pass-through certificates.
Fitch expects to rate the transaction and assign Outlooks as follows:
--$52,231,000 class A-1 'AAAsf'; Outlook Stable;
--$85,216,000 class A-2 'AAAsf'; Outlook Stable;
--$23,484,000 class A-3 'AAAsf'; Outlook Stable;
--$87,500,000 class A-4A1 'AAAsf'; Outlook Stable;
--$87,500,000 class A-4A2 'AAAsf'; Outlook Stable;
--$292,029,000 class A-5 'AAAsf'; Outlook Stable;
--$67,360,000 class A-SB 'AAAsf'; Outlook Stable;
--$725,382,000a class X-A 'AAAsf'; Outlook Stable;
--$69,426,000a class X-B 'AA-sf'; Outlook Stable;
--$55,062,000b class A-S 'AAAsf'; Outlook Stable;
--$69,426,000b class B 'AA-sf'; Outlook Stable;
--$37,107,000b class C 'A-sf'; Outlook Stable;
--$161,595,000b class EC 'A-sf'; Outlook Stable;
--$56,259,000c class D 'BBB-sf'; Outlook Stable;
--$19,152,000c class E 'BBsf'; Outlook Stable;
--$11,970,000c class F 'Bsf'; Outlook Stable.
(a) Notional amount and interest only.
(b) Class A-S, class B, and class C certificates may be exchanged for a related amount of class EC certificates, and class EC certificates may be exchanged for class A-S, class B, and class C certificates.
(c) Privately placed pursuant to Rule 144A.
The expected ratings are based on information provided by the issuer as of Feb. 10, 2014. Fitch does not expect to rate the $38,303,883 non-rated class or the $69,425,883 interest-only class X-C.
The certificates represent the beneficial ownership in the trust, primary assets of which are 51 loans secured by 83 commercial properties having an aggregate principal balance of approximately $957.6 million as of the cutoff date. The loans were contributed to the trust by JPMorgan Chase Bank, National Association; Barclays Bank PLC; Redwood Commercial Mortgage Corporation; Starwood Mortgage Funding II LLC; and RAIT Funding, LLC.
Fitch reviewed a comprehensive sample of the transaction's collateral, including site inspections on 72.7% of the properties by balance, cash flow analysis on 71.9%, and asset summary reviews on 71.9% of the pool.
The transaction has a Fitch stressed debt service coverage ratio (DSCR) of 1.16x, a Fitch stressed loan-to-value (LTV) of 100.4%, and a Fitch debt yield of 9.1%. Fitch's aggregate net cash flow represents a variance of 6.8% to issuer cash flows.
KEY RATING DRIVERS
Fitch Leverage: This transaction has slightly lower leverage than other recent Fitch-rated fixed-rate deals. The pool's Fitch LTV of 100.4% is below the 2013 average of 101.6%. However, excluding the credit opinion loan, the pool's Fitch LTV is 103.5%. The pool's Fitch DSCR of 1.16x is below the 2013 average of 1.29x. The conduit DSCR is 1.15x, excluding the credit opinion loans.
Pool Concentration: The pool is more concentrated by loan size and sponsor than average transactions from 2013, as evidenced by a loan concentration index (LCI) of 479 and sponsor concentration index (SCI) of 479. Also the 10 largest loans represent 58.6% of the total pool balance, which is higher than the average 2013 top 10 concentration of 54.5%.
High Retail Concentration: The pool has an above- average concentration of retail properties at 52.4%. Six of the 10 largest assets are retail properties. The average retail concentration in 2013 was 33.2%. The largest property type is retail (52.4%), followed by multifamily (13.9%) and hotel (11.9%).
Credit Opinion Loan: The largest loan in the pool, Miami International Mall (10.4%), has a Fitch credit opinion 'BBB-sf' on a stand-alone basis. The loan is collateralized by a super-regional mall in Miami, FL. This loan participation is a $100 million, controlling pari passu portion of a $160 million loan.
RATING SENSITIVITIES
Fitch performed two model-based break-even analyses to determine the level of cash flow and value deterioration the pool could withstand prior to $1 of loss being experienced by the 'BBB-sf' and 'AAAsf' rated classes. Fitch found that the JPMBB 2014-C18 pool could withstand a 62.0% decline in value (based on appraised values at issuance) and an approximately 19.6% decrease to the most recent actual cash flow prior to experiencing a $1 of loss to the 'BBB-sf' rated class. Additionally, Fitch found that the pool could withstand a 69.4% decline in value and an approximately 35.3% decrease in the most recent actual cash flow prior to experiencing $1 of loss to any 'AAAsf' rated class.
Key Rating Drivers and Rating Sensitivities are further described in the accompanying pre-sale report.
The master servicer will be Midland Loan Services, rated 'CMS1-' by Fitch. The special servicer will be LNR Partners, LLC, rated 'CSS1-' by Fitch.
The presale report is available at 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions (August 2013);
--Global Structured Finance Rating Criteria (June 2012);
--Criteria for Special-Purpose Vehicles in Structured Finance Transactions (May 2012);
--U.S. Commercial Mortgage Servicer Rating Criteria (February 2011);
--U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria (December 2012);
--Counterparty Criteria for Structured Finance Transactions (May 2012).
Applicable Criteria and Related Research: J.P. Morgan Chase Commercial Mortgage Securities Trust 2014-C18 (US CMBS)
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=735622
Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=715757
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661
Criteria for Special-Purpose Vehicles in Structured Finance Transactions — Effective 13 June 2011 to 30 May 2012
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=635249
U.S. Commercial Mortgage Servicer Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=584005
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724961
Counterparty Criteria for Structured Finance and Covered Bonds
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=707155
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=820258
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