NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed three classes of J.P. Morgan Commercial Mortgage Finance Corp. series 1999-C8 commercial mortgage pass-through certificates:
--$8.7 million class G notes at 'BBsf'; Outlook Stable;
--$10.9 million class H notes at 'Dsf'; RE 85%;
--Class J notes at 'Dsf'; RE 0%.
KEY RATING DRIVERS
The affirmation to the class G notes reflects sufficient credit enhancement to offset Fitch modeled losses across the pool. Fitch modeled losses of 9.3% of the remaining pool; expected losses on the original pool balance total 7.8%, including losses already incurred. Fitch has designated five loans (29.1%) as Fitch Loans of Concern, which includes one specially serviced asset (4.3%).
As of the March 2013 distribution date, the pool's aggregate principal balance has been reduced by 97.3% to $19.7 million from $731.5 million at issuance. One loan (1.2%) is currently defeased. Interest shortfalls are currently affecting classes H and J.
Fitch stressed the cash flow of the remaining loans by applying a 5% reduction to 2012 or 2011 fiscal year-end net operating income, and applying an adjusted market cap rate between 9% and 11% to determine value. All the loans also underwent a refinance test by applying an 8% interest rate and 30-year amortization schedule to the stressed cash flow. All but one of the loans was modeled to pay off at maturity, and could refinance to a debt-service coverage ratio (DSCR) above 1.25x. While the credit profile of the class G notes has improved, an upgrade is not recommended given the increasing concentration and long-dated maturities of the underlying collateral.
The largest contributor to loss (13.6% of pool balance) is a 120-unit healthcare property located in Lantana, FL. The loan is current as of March 2013 and has a servicer reported year end 2010 DSCR of 0.34x. According to the servicer, the subject is well maintained and in good condition. However, the property continues to struggle due to high operating expenses. Fitch modeled the loan to default during the term.
Fitch does not rate the class NR notes and previously withdrew the ratings on the K notes. Classes A-1, A-2, B, C, D, E, and F have paid in full.
RATING SENSITIVITIES
The rating on the class G notes is expected to be stable as the credit enhancement is increasing. However, larger than expected losses could result in downgrades to the class.
Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (June 6, 2012);
--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 18, 2012).
Applicable Criteria and Related Research
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=696969
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679923
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