CHICAGO--(BUSINESS WIRE)--Fitch Ratings has affirmed 13 classes of Morgan Stanley Capital I Trust (MSC 2003-IQ5) commercial mortgage pass-through certificates series 2003-IQ5. A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The affirmations reflect stable performance of the pool and sufficient credit enhancement of the remaining rated classes. Fitch modeled losses of 4.6% of the remaining pool; expected losses on the original pool balance total 1%. The pool has experienced no realized losses to date. Fitch has designated eight loans (11.8%) as Fitch Loans of Concern, which includes three specially serviced assets (6.4%).
RATING SENSITIVITIES
The investment grade classes are expected to remain stable and no rating actions are anticipated. Despite improved credit enhancement levels, concerns regarding smaller-than average class sizes and high concentration of maturities (68% of pool balance) this year have limited the prospect for upgrades. The Negative Outlooks reflect the potential for downgrade given the recent transfer of loans to special servicing with uncertain expected losses.
As of the April 2013 distribution date, the pool's aggregate principal balance has been reduced by 77.4% to $175.6 million from $778.8 million at issuance. Per the servicer reporting, two loans (4.9% of the pool) are defeased. Interest shortfalls are currently affecting class O.
The largest contributor to expected losses is a specially serviced loan (2.2%) secured by a 59,435 sf office building located in Fairborn, OH, eight miles north of Dayton. The loan transferred to special servicing in April 2013 due to maturity default and the servicer is awaiting third-party reports and financials from the borrower. As of YE 2011, occupancy for the building was 56.9% with DSCR of 0.68x. The loan is crossed-defaulted with the third largest contributor to losses.
The next largest contributor to expected losses is a specially serviced loan (2.7%) secured by a 144,464 sf mixed use property primarily composed of office and retail located in Ft. Myers, FL. The property transferred to special servicing in May 2012 due to imminent default with the most recently reported occupancy at 50% as of October 2012. The servicer has executed a listing agreement to auction the note for sale.
The third largest contributor to expected losses is a specially serviced loan (2.3% of the pool) secured by a 60,168 sf office building located in Fairborn, OH, eight miles north of Dayton. The loan transferred to special servicing in April 2013 due to maturity default and the servicer is awaiting third-party reports and financials from the borrower. As of YE 2011, occupancy for the building was 90.6% with DSCR of 0.94x. The loan is crossed-defaulted with the largest contributor to losses.
Fitch affirms the following classes and revises Rating Outlooks as indicated:
--$30.2 million class C at 'AA+sf'; Outlook to Stable from Positive;
--$7.8 million class D at 'AA-sf'; Outlook to Stable from Positive;
--$1.9 million class M at 'Bsf'; Outlook to Negative from Stable;
--$974,000 class N at 'B-sf'; Outlook to Negative from Stable.
Fitch affirms the following classes as indicated:
--$67.6 million class A-4 at 'AAAsf'; Outlook Stable;
--$22.4 million class B at 'AAAsf'; Outlook Stable;
--$5.8 million class E at 'A+sf'; Outlook Stable;
--$6.8 million class F at 'A-sf'; Outlook Stable;
--$7.8 million class G at 'BBBsf'; Outlook Stable;
--$5.8 million class H at 'BBB-sf'; Outlook Stable;
--$2.9 million class J at 'BB+sf'; Outlook Stable;
--$4.9 million class K at 'BBsf'; Outlook Stable;
--$2.9 million class L at 'B+sf'; Outlook Stable;
Fitch does not rate the class O certificates. Classes A-1, A-2, and A-3 have paid in full.
Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 18, 2012 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' (June 6, 2012);
--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 18, 2012).
Applicable Criteria and Related Research
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679923
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=696969
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=790184
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.