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Announcement:

Moody's Affirms 19 CMBS Classes of BSCMS 2004-PWR5

09 Mar 2011

Approximately $978.8 Million of Structured Securities Affected

New York, March 09, 2011 -- Moody's Investors Service (Moody's) affirmed the ratings of 19 classes of Bear Stearns Commercial Mortgage Securities Trust, Commercial Mortgage Pass-Through Certificates, Series 2004-PWR5 as follows:

Cl. A-2, Affirmed at Aaa (sf); previously on Nov 8, 2004 Definitive Rating Assigned Aaa (sf)

Cl. A-3, Affirmed at Aaa (sf); previously on Nov 8, 2004 Definitive Rating Assigned Aaa (sf)

Cl. A-4, Affirmed at Aaa (sf); previously on Nov 8, 2004 Definitive Rating Assigned Aaa (sf)

Cl. A-5, Affirmed at Aaa (sf); previously on Nov 8, 2004 Definitive Rating Assigned Aaa (sf)

Cl. B, Affirmed at Aa2 (sf); previously on Nov 8, 2004 Definitive Rating Assigned Aa2 (sf)

Cl. C, Affirmed at Aa3 (sf); previously on Nov 8, 2004 Definitive Rating Assigned Aa3 (sf)

Cl. D, Affirmed at A2 (sf); previously on Nov 8, 2004 Definitive Rating Assigned A2 (sf)

Cl. E, Affirmed at A3 (sf); previously on Nov 8, 2004 Definitive Rating Assigned A3 (sf)

Cl. F, Affirmed at Baa3 (sf); previously on Apr 28, 2010 Downgraded to Baa3 (sf)

Cl. G, Affirmed at Ba1 (sf); previously on Apr 28, 2010 Downgraded to Ba1 (sf)

Cl. H, Affirmed at Ba3 (sf); previously on Apr 28, 2010 Downgraded to Ba3 (sf)

Cl. J, Affirmed at B2 (sf); previously on Apr 28, 2010 Downgraded to B2 (sf)

Cl. K, Affirmed at B3 (sf); previously on Apr 28, 2010 Downgraded to B3 (sf)

Cl. L, Affirmed at Caa1 (sf); previously on Apr 28, 2010 Downgraded to Caa1 (sf)

Cl. M, Affirmed at Caa2 (sf); previously on Apr 28, 2010 Downgraded to Caa2 (sf)

Cl. N, Affirmed at Caa3 (sf); previously on Apr 28, 2010 Downgraded to Caa3 (sf)

Cl. P, Affirmed at Ca (sf); previously on Apr 28, 2010 Downgraded to Ca (sf)

Cl. X-1, Affirmed at Aaa (sf); previously on Nov 8, 2004 Definitive Rating Assigned Aaa (sf)

Cl. X-2, Affirmed at Aaa (sf); previously on Nov 8, 2004 Definitive Rating Assigned Aaa (sf)

The affirmations are due to key parameters, including Moody's loan to value (LTV) ratio, Moody's stressed debt service coverage ratio (DSCR) and the Herfindahl Index (Herf), remaining within acceptable ranges. Based on our current base expected loss, the credit enhancement levels for the affirmed classes are sufficient to maintain their current ratings.

Moody's rating action reflects a cumulative base expected loss of 2.5% of the current balance. At last review, Moody's cumulative base expected loss was 2.3%. Moody's stressed scenario loss is 7% of the current balance. Moody's provides a current list of base and stress scenario losses for conduit and fusion CMBS transactions on moodys.com at http://v3.moodys.com/viewresearchdoc.aspx?docid=PBS_SF215255. Depending on the timing of loan payoffs and the severity and timing of losses from specially serviced loans, the credit enhancement level for investment grade classes could decline below the current levels. If future performance materially declines, the expected level of credit enhancement and the priority in the cash flow waterfall may be insufficient for the current ratings of these classes.

Moody's analysis reflects a forward-looking view of the likely range of collateral performance over the medium term. From time to time, Moody's may, if warranted, change these expectations. Performance that falls outside an acceptable range of the key parameters may indicate that the collateral's credit quality is stronger or weaker than Moody's had anticipated during the current review. Even so, deviation from the expected range will not necessarily result in a rating action. There may be mitigating or offsetting factors to an improvement or decline in collateral performance, such as increased subordination levels due to amortization and loan payoffs or a decline in subordination due to realized losses.

Primary sources of assumption uncertainty are the current sluggish macroeconomic environment and varying performance in the commercial real estate property markets. However, Moody's expects to see increasing or stabilizing property values, higher transaction volumes, a slowing in the pace of loan delinquencies and greater liquidity for commercial real estate in 2011. The hotel and multifamily sectors are continuing to show signs of recovery, while recovery in the office and retail sectors will be tied to recovery of the broader economy. The availability of debt capital continues to improve with terms returning toward market norms. Moody's central global macroeconomic scenario reflects an overall sluggish recovery through 2012, amidst ongoing individual, corporate and governmental deleveraging, persistent unemployment, and government budget considerations.

The principal methodology used in this rating was "CMBS: Moody's Approach to Rating Fusion Transactions", published in April, 2005. In addition, Moody's publishes a weekly summary of structured finance credit, ratings and methodologies, available to all registered users of our website, at www.moodys.com/SFQuickCheck.

Moody's review incorporated the use of the excel-based CMBS Conduit Model v 2.50 which is used for both conduit and fusion transactions. Conduit model results at the Aa2 level are driven by property type, Moody's actual and stressed DSCR, and Moody's property quality grade (which reflects the capitalization rate used by Moody's to estimate Moody's value). Conduit model results at the B2 level are driven by a paydown analysis based on the individual loan level Moody's LTV ratio. Moody's Herfindahl score (Herf), a measure of loan level diversity, is a primary determinant of pool level diversity and has a greater impact on senior certificates. Other concentrations and correlations may be considered in our analysis. Based on the model pooled credit enhancement levels at Aa2 and B2, the remaining conduit classes are either interpolated between these two data points or determined based on a multiple or ratio of either of these two data points. For fusion deals, the credit enhancement for loans with investment-grade credit estimates is melded with the conduit model credit enhancement into an overall model result. Fusion loan credit enhancement is based on the underlying rating of the loan which corresponds to a range of credit enhancement levels. Actual fusion credit enhancement levels are selected based on loan level diversity, pool leverage and other concentrations and correlations within the pool. Negative pooling, or adding credit enhancement at the underlying rating level, is incorporated for loans with similar credit estimates in the same transaction.

Moody's ratings are determined by a committee process that considers both quantitative and qualitative factors. Therefore, the rating outcome may differ from the model output.

The rating action is a result of Moody's on-going surveillance of commercial mortgage backed securities (CMBS) transactions. Moody's monitors transactions on a monthly basis through two sets of quantitative tools -- MOST® (Moody's Surveillance Trends) and CMM (Commercial Mortgage Metrics) on Trepp -- and on a periodic basis through a comprehensive review. Moody's prior full review is summarized in a press release dated April 28, 2010. Please see the ratings tab on the issuer / entity page on moodys.com for the last rating action and the ratings history.

DEAL PERFORMANCE

As of the February 11, 2011 distribution date, the transaction's aggregate certificate balance has decreased by 20% to $990.4 million from $1.2 billion at securitization. The Certificates are collateralized by 119 mortgage loans ranging in size from less than 1% to 7% of the pool, with the top ten loans representing 41% of the pool. The pool contains one loan with an investment grade credit estimate that represents 1% of the pool. At the last full review, the New Hampshire Tower Loan ($5.5 million -- 1% of the pool) had an investment grade credit estimate. Due to decline in performance the loan no longer has a credit estimate and is part of the conduit pool. Ten loans, representing 20% of the pool, have defeased and are collateralized with U.S. Government securities.

Twenty-nine loans, representing 17% of the pool, are on the master servicer's watchlist. The watchlist includes loans which meet certain portfolio review guidelines established as part of the CRE Finance Council (CREFC) monthly reporting package. As part of our ongoing monitoring of a transaction, Moody's reviews the watchlist to assess which loans have material issues that could impact performance.

Two loans have been liquidated from the pool, resulting in an aggregate realized loss of $2.3 million (51% loss severity overall). One loan, representing less than 1% of the pool, is currently in special servicing. The master servicer has recognized a $4.1 million appraisal reduction for the specially serviced loan. Moody's has estimated an aggregate $4.3 million loss (65% expected loss) for the specially serviced loan.

Moody's has assumed a high default probability for seven poorly performing loans representing 2% of the pool and has estimated a $3.8 million aggregate loss (19% expected loss based on a 53% probability default) from these troubled loans.

Moody's was provided with full year 2009 and partial year 2010 operating results for 89% and 76% of the pool's loans, respectively. Excluding specially serviced and troubled loans, Moody's weighted average LTV is 81% compared to 82% at Moody's prior review. Moody's net cash flow reflects a weighted average haircut of 12% to the most recently available net operating income. Moody's value reflects a weighted average capitalization rate of 9.2%.

Excluding specially serviced and troubled loans, Moody's actual and stressed DSCRs are 1.54X and 1.34X, respectively, compared to 1.52X and 1.29X at last review. Moody's actual DSCR is based on Moody's net cash flow (NCF) and the loan's actual debt service. Moody's stressed DSCR is based on Moody's NCF and a 9.25% stressed rate applied to the loan balance.

Moody's uses a variation of Herf to measure diversity of loan size, where a higher number represents greater diversity. Loan concentration has an important bearing on potential rating volatility, including risk of multiple notch downgrades under adverse circumstances. The credit neutral Herf score is 40. The pool has a Herf of 35, the same level at Moody's prior review.

The loan with a credit estimate is the New Castle Marketplace Loan ($10.8 million -- 1.1% of the pool), which is secured by a 300,000 square foot (SF) retail center located in New Castle, Delaware. The property was 100% leased as of October 2010, the same as at last review. The loan amortizes on a 15-year schedule and has amortized 32% since last review. Performance has been stable. Moody's current credit estimate and stressed DSCR are Aaa and 3.2X, respectively, compared to Aaa and 2.4X at last review.

The top three performing conduit loans represent 17% of the pool balance. The largest loan is the 3941 Fairview Park Drive Loan ($69.0 million -- 7.0% of the pool), which is secured by a 353,000 SF Class A office building located in Falls Church, Virginia. The property was 99% leased as of September 2010, the same as at last review. The largest tenants are General Dynamics Corporation which leases 48% of the net rentable area (NRA) through March 2019 and Howrey LLP, which leases 21% of the NRA through December 2016. Performance has improved since securitization due to increasing base rent. Moody's LTV and stressed DSCR are 77% and 1.19X, respectively, compared to 84% and 1.09X at last review.

The second largest loan is The Summit Louisville Loan ($54.8 million -- 5.5% of the pool), which is secured by a 341,000 SF retail complex located in Louisville, Kentucky. The property was 98% leased as of September 2010, similar to last review. This loan is interest only for its entire seven year term. Moody's LTV and stressed DSCR are 89% and 1.09X, respectively, compared to 88% and 1.11X at last review.

The third largest loan is the Reisterstown Plaza Loan ($45.8 million -- 4.6% of the pool), which is secured by a 792,000 SF office and retail center located in Baltimore, Maryland. The property was 82% leased as of September 2010, the same as at last review. Moody's LTV and stressed DSCR are 86% and 1.14X, respectively, compared to 96% and 1.01X at last review.

New York
Raymond Flores
Associate Analyst
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Keith Banhazl
Vice President - Senior Analyst
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's Investors Service
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's Affirms 19 CMBS Classes of BSCMS 2004-PWR5
No Related Data.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

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All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

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Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

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