Approximately $83.6 Million of Structured Securities Affected
New York, August 18, 2016 -- Moody's Investors Service, ("Moody's") has
affirmed the ratings on eight classes and upgraded the ratings on three
classes in J.P. Morgan Chase Commercial Mortgage Securities
Corp. Series 2003-CIBC6 as follows:
Cl. D, Affirmed Aaa (sf); previously on Feb 26,
2016 Affirmed Aaa (sf)
Cl. E, Affirmed Aaa (sf); previously on Feb 26,
2016 Affirmed Aaa (sf)
Cl. F, Affirmed Aaa (sf); previously on Feb 26,
2016 Upgraded to Aaa (sf)
Cl. G, Upgraded to Aa2 (sf); previously on Feb 26,
2016 Upgraded to A1 (sf)
Cl. H, Upgraded to Baa2 (sf); previously on Feb 26,
2016 Affirmed Ba1 (sf)
Cl. J, Upgraded to Ba1 (sf); previously on Feb 26,
2016 Affirmed Ba2 (sf)
Cl. K, Affirmed B2 (sf); previously on Feb 26,
2016 Affirmed B2 (sf)
Cl. L, Affirmed Caa3 (sf); previously on Feb 26,
2016 Affirmed Caa3 (sf)
Cl. M, Affirmed C (sf); previously on Feb 26,
2016 Affirmed C (sf)
Cl. N, Affirmed C (sf); previously on Feb 26,
2016 Affirmed C (sf)
Cl. X-1, Affirmed B3 (sf); previously on Feb
26, 2016 Downgraded to B3 (sf)
RATINGS RATIONALE
The ratings on the P&I classes D, E & F were affirmed because
the transaction's key metrics, including Moody's loan-to-value
(LTV) ratio, Moody's stressed debt service coverage ratio (DSCR)
and the transaction's Herfindahl Index (Herf), are within
acceptable ranges.
The rating on the P&I classes, classes G, H & J were
upgraded primarily due to an increase in credit support since Moody's
last review, resulting from paydowns and amortization, as
well as Moody's expectation of additional increases in credit support
resulting from the payoff of loans approaching maturity that are well
positioned for refinance. The pool has paid down by 13%
since Moody's last review. In addition, loans constituting
39% of the pool that have debt yields exceeding 11.5%
are scheduled to mature within the next 24 months.
The ratings on the P&I classes, K through N were affirmed because
the ratings are consistent with Moody's expected loss.
The rating on the IO Class, Class X-1 was affirmed based
on the credit performance (or the weighted average rating factor or WARF)
of the referenced classes.
Moody's rating action reflects a base expected loss of 7.9%
of the current balance, compared to 5.8% at Moody's
last review. Moody's base expected loss plus realized losses is
now 2.2% of the original pooled balance, compared
to 2.1% at the last review. Moody's provides
a current list of base expected losses for conduit and fusion CMBS transactions
on moodys.com at http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF215255.
FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS:
The performance expectations for a given variable indicate Moody's forward-looking
view of the likely range of performance over the medium term. Performance
that falls outside the given range can indicate that the collateral's
credit quality is stronger or weaker than Moody's had previously expected.
Factors that could lead to an upgrade of the ratings include a significant
amount of loan paydowns or amortization, an increase in the pool's
share of defeasance or an improvement in pool performance.
Factors that could lead to a downgrade of the ratings include a decline
in the performance of the pool, loan concentration, an increase
in realized and expected losses from specially serviced and troubled loans
or interest shortfalls.
METHODOLOGY UNDERLYING THE RATING ACTION
The methodologies used in these ratings were "Approach to Rating US and
Canadian Conduit/Fusion CMBS" published in December 2014, and "Moody's
Approach to Rating Large Loan and Single Asset/Single Borrower CMBS"
published in October 2015. Please see the Ratings Methodologies
page on www.moodys.com for a copy of these methodologies.
DESCRIPTION OF MODELS USED
Moody's review used the excel-based CMBS Conduit Model,
which it uses for both conduit and fusion transactions. Credit
enhancement levels for conduit loans are driven by property type,
Moody's actual and stressed DSCR, and Moody's property
quality grade (which reflects the capitalization rate Moody's uses
to estimate Moody's value). Moody's fuses the conduit
results with the results of its analysis of investment grade structured
credit assessed loans and any conduit loan that represents 10%
or greater of the current pool balance.
Moody's uses a variation of Herf to measure the diversity of loan
sizes, where a higher number represents greater diversity.
Loan concentration has an important bearing on potential rating volatility,
including the risk of multiple notch downgrades under adverse circumstances.
The credit neutral Herf score is 40. The pool has a Herf of 4,
compared to 7 at Moody's last review.
When the Herf falls below 20, Moody's uses the excel-based
Large Loan Model and then reconciles and weights the results from the
conduit and large loan models in formulating a rating recommendation.
The large loan model derives credit enhancement levels based on an aggregation
of adjusted loan-level proceeds derived from Moody's loan-level
LTV ratios. Major adjustments to determining proceeds include leverage,
loan structure, property type and sponsorship. Moody's
also further adjusts these aggregated proceeds for any pooling benefits
associated with loan level diversity and other concentrations and correlations.
DEAL PERFORMANCE
As of the August 12, 2016 distribution date, the transaction's
aggregate certificate balance has decreased by 91.8% to
$85.17 million from $1.06 billion at securitization.
The certificates are collateralized by 18 mortgage loans ranging in size
from less than 1% to 31.8% of the pool, with
the top ten loans constituting 71.3% of the pool.
There are no loans with an investment-grade structured credit assessments.
Five loans, constituting 26.4% of the pool,
have defeased and are secured by US government securities.
Five loans, constituting 20.2% of the pool,
are on the master servicer's watchlist. The watchlist includes
loans that meet certain portfolio review guidelines established as part
of the CRE Finance Council (CREFC) monthly reporting package. As
part of Moody's ongoing monitoring of a transaction, the agency
reviews the watchlist to assess which loans have material issues that
could affect performance.
Twelve loans have been liquidated from the pool, resulting in an
aggregate realized loss of $16.6 million (for an average
loss severity of 36.8%). One loan, constituting
7.2% of the pool, is currently in special servicing.
The Advance Office Building Loan ($6.2 million -- 7.2%
of the pool), is secured by a 231,000 square foot (SF) office
building located in Southfield, Michigan. The loan transferred
to special servicing in March 2013 due to imminent maturity default and
a receiver was appointed in November 2013. A foreclosure sale was
conducted in December 2014 and the Note holder was the successful bidder.
Per the June 2016 rent roll, the property was 63% leased.
The Special Servicer indicated the asset is currently being held to complete
new leases, negotiate renewals and to complete capital improvements.
Moody's received full year 2014 operating results for 63% of the
pool and full year 2015 operating results for 68% of the pool.
Moody's weighted average conduit LTV is 80.4%,
compared to 76.4% at Moody's last review. Moody's
conduit component excludes loans with structured credit assessments,
defeased and CTL loans, and specially serviced and troubled loans.
Moody's net cash flow (NCF) reflects a weighted average haircut
of 4.3% to the most recently available net operating income
(NOI). Moody's value reflects a weighted average capitalization
rate of 9.4%.
Moody's actual and stressed conduit DSCRs are 1.44X and 1.44X,
respectively, compared to 1.45X and 1.46X at the last
review. Moody's actual DSCR is based on Moody's NCF
and the loan's actual debt service. Moody's stressed
DSCR is based on Moody's NCF and a 9.25% stress rate
the agency applied to the loan balance.
The top three conduit loans represent 42.4% of the pool
balance. The largest loan is the International Paper Office Loan
($27.1 million -- 31.8% of the pool),
which is secured by a 214,000 square foot (SF) office building located
in Memphis, Tennessee. The building is one of three identically
designed buildings that make up the International Place office park.
The collateral is 100% leased to International Paper Company (senior
unsecured rating Baa2) through February 2027. International Paper
has utilized the International Place office park as its headquarters since
1987. The loan has amortized 22.6% since securitization
and matures in July 2017. Moody's analysis is based on a lit/dark
analysis due to concerns about the property's single tenancy. Moody's
LTV and stressed DSCR are 80% and 1.25X, respectively,
compared to 81% and 1.23X, at last review.
The second largest loan is the Old Orchard Village East Shopping Center
Loan ($5.9 million -- 7.0% of the pool),
which is secured by a 168,000 square foot (SF) grocery-anchored
retail property located in Lewisville, TX. Winco Foods LLC
commenced a 25-year lease for 50% of the GLA in June 2015.
Occupancy as of June 2016 was 85% compared to 79% at YE
2015 and 28% at YE 2014. Moody's LTV and stressed DSCR are
120% and 0.99X, respectively, compared to 143%
and 0.83X, at last review.
The third largest loan is the Green Bay Manor Apartments Loan ($3.1
million -- 3.6% of the pool), which is secured
by a 75-unit multifamily property in Waukegan, IL.
The property was 96% leased as of March 2016 compared to 97%
at YE 2015. The property is currently on the watchlist due to low
DSCR as a result of increased property taxes. Moody's LTV and stressed
DSCR are 97% and 0.95X, respectively, compared
to 96% and 0.96X, at last review.
REGULATORY DISCLOSURES
For further specification of Moody's key rating assumptions and sensitivity
analysis, see the sections Methodology Assumptions and Sensitivity
to Assumptions of the disclosure form.
The analysis includes an assessment of collateral characteristics and
performance to determine the expected collateral loss or a range of expected
collateral losses or cash flows to the rated instruments. As a
second step, Moody's estimates expected collateral losses or cash
flows using a quantitative tool that takes into account credit enhancement,
loss allocation and other structural features, to derive the expected
loss for each rated instrument.
Moody's did not use any stress scenario simulations in its analysis.
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation
to the credit rating action on the support provider and in relation to
each particular credit rating action for securities that derive their
credit ratings from the support provider's credit rating.
For provisional ratings, this announcement provides certain regulatory
disclosures in relation to the provisional rating assigned, and
in relation to a definitive rating that may be assigned subsequent to
the final issuance of the debt, in each case where the transaction
structure and terms have not changed prior to the assignment of the definitive
rating in a manner that would have affected the rating. For further
information please see the ratings tab on the issuer/entity page for the
respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Stephen L Renna
Associate Analyst
Structured Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Keith Banhazl
Associate Managing Director
Structured Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
