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Rating Action:

Moody's Affirms Twenty Classes of JPMCC 2006-LDP9

30 May 2014

Approximately $3.6 Billion of Structured Securities Affected

New York, May 30, 2014 -- Moody's Investors Service (Moody's) has affirmed the ratings on twenty classes of J.P. Morgan Chase Commercial Mortgage Securities Corp. Commercial Mortgage Pass-Through Certificates Series 2006-LDP9 as follows:

Cl. A-1A, Affirmed Aa3 (sf); previously on Jun 6, 2013 Affirmed Aa3 (sf)

Cl. A-2, Affirmed Aaa (sf); previously on Jun 6, 2013 Affirmed Aaa (sf)

Cl. A-3, Affirmed Aa3 (sf); previously on Jun 6, 2013 Affirmed Aa3 (sf)

Cl. A-3SFL, Affirmed Aa3 (sf); previously on Jun 6, 2013 Affirmed Aa3 (sf)

Cl. A-3SFX, Affirmed Aa3 (sf); previously on Jun 6, 2013 Affirmed Aa3 (sf)

Cl. A-M, Affirmed Ba1 (sf); previously on Jun 6, 2013 Downgraded to Ba1 (sf)

Cl. A-MS, Affirmed Ba1 (sf); previously on Jun 6, 2013 Downgraded to Ba1 (sf)

Cl. A-J, Affirmed Caa1 (sf); previously on Jun 6, 2013 Downgraded to Caa1 (sf)

Cl. A-JS, Affirmed Caa1 (sf); previously on Jun 6, 2013 Downgraded to Caa1 (sf)

Cl. B, Affirmed Caa2 (sf); previously on Jun 6, 2013 Affirmed Caa2 (sf)

Cl. B-S, Affirmed Caa2 (sf); previously on Jun 6, 2013 Affirmed Caa2 (sf)

Cl. C, Affirmed Caa3 (sf); previously on Jun 6, 2013 Affirmed Caa3 (sf)

Cl. C-S, Affirmed Caa3 (sf); previously on Jun 6, 2013 Affirmed Caa3 (sf)

Cl. D, Affirmed C (sf); previously on Jun 6, 2013 Affirmed C (sf)

Cl. D-S, Affirmed C (sf); previously on Jun 6, 2013 Affirmed C (sf)

Cl. E, Affirmed C (sf); previously on Jun 6, 2013 Affirmed C (sf)

Cl. E-S, Affirmed C (sf); previously on Jun 6, 2013 Affirmed C (sf)

Cl. F, Affirmed C (sf); previously on Jun 6, 2013 Affirmed C (sf)

Cl. F-S, Affirmed C (sf); previously on Jun 6, 2013 Affirmed C (sf)

Cl. X, Affirmed Ba3 (sf); previously on Jun 6, 2013 Affirmed Ba3 (sf)

RATINGS RATIONALE

The ratings on P&I classes A-1A through A-MS 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 ratings on P&I classes A-J through F-S were affirmed because the ratings are consistent with Moody's expected loss.

The rating on the one IO class 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 15.0% of the current balance, compared to 14.5% at Moody's last review. Moody's base expected loss plus realized losses is now 16.1% of the original pooled balance, compared to 15.6% at Moody's last review.. Moody's provides a current list of base expected losses for conduit and fusion CMBS transactions on moodys.com at http://v3.moodys.com/viewresearchdoc.aspx?docid=PBS_SF215255.

FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING:

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 principal methodology used in this rating was " Moody's Approach to Rating Fusion U.S. CMBS Transactions" published in April 2005. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

DESCRIPTION OF MODELS USED

Moody's review used the excel-based CMBS Conduit Model v 2.64, which it uses for both conduit and fusion transactions. Conduit model results at the Aa2 (sf) level 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). Conduit model results at the B2 (sf) level are based on a paydown analysis using the individual loan-level Moody's LTV ratio. Moody's may consider other concentrations and correlations in its analysis. Based on the model pooled credit enhancement levels of Aa2 (sf) and B2 (sf), the required credit enhancement on 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, Moody's merges the credit enhancement for loans with investment-grade structured credit assessments with the conduit model credit enhancement for an overall model result. Moody's incorporates negative pooling (adding credit enhancement at the structured credit assessment level) for loans with similar structured credit assessments in the same transaction.

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 30, compared to 36 at Moody's prior review.

DEAL PERFORMANCE

As of the May 15, 2014 distribution date, the transaction's aggregate certificate balance has decreased by 26% to $3.6 billion from $4.9 billion at securitization. The certificates are collateralized by 200 mortgage loans ranging in size from less than 1% to 10% of the pool, with the top ten loans constituting 48% of the pool. One loan, constituting 5% of the pool, has a Moody's structured credit assessment. Five loans, constituting 2% of the pool, have defeased and are secured by US government securities.

Fifty-six loans, constituting 30% 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.

Forty loans have been liquidated from the pool, resulting in an aggregate realized loss of $243 million (for an average loss severity of 56%). Twenty-one loans, constituting 27% of the pool, are currently in special servicing. The largest specially serviced loan is the Belnord loan ($375.0 million - 10.4% of the pool), which is secured by a 215-unit multifamily building located in the Upper West Side of Manhattan. The loan transferred to special servicing in June 2011 due to imminent default, but remains current. The loan was modified in March 2013, and is subject to a two-year forbearance period thru March 2015. The residential component reported occupancy 94% as of January 2014, same as the last review. An October 2012 appraisal, valued the property at $283 million.

The second largest specially serviced loan is the 131 South Dearborn Loan ($236 million - 6.6% of the pool), which represents a 50% pari passu interest in a $472 million senior mortgage. The loan is secured by the 37-story "Citadel Center", a 1.5 million square foot (SF) office tower in the Central Loop submarket of Chicago, Illinois. The property is also encumbered by $50 million of mezzanine debt. The property transferred to special servicing in May 2014. The property was 98% occupied as of December 2013, compared to 94% occupied as of June 2012. The second largest tenant, which had occupied 20% of the net rentable area (NRA), is executing an early termination option to move out in 2017.

The third largest specially serviced loan is the Bank of America Plaza Loan ($100.0 million - 2.8% of the pool), which represents a 27.5% pari passu interest in a $363 million first mortgage loan. The loan is secured by a 1.25 million SF Class A office building located in Atlanta, Georgia. The property transferred to special servicing in February 2011 due to monetary default and became REO in February 2012. The servicer is pursuing a comprehensive stabilization strategy for the asset. The occupancy was 51% as of November 2013, compared to 63% as of October 2011.

The remaining 18 specially serviced loans are secured by a mix of property types. Moody's estimates an aggregate $292 million loss for the specially serviced loans (30% expected loss on average).

Moody's has assumed a high default probability for 39 poorly performing loans, constituting 28% of the pool, and has estimated an aggregate loss of $197 million (a 19% expected loss based on a 50% probability default) from these troubled loans.

Moody's received full or partial year 2012 operating results for 96% of the pool, and full or partial year 2013 operating results for 71% of the pool. Moody's weighted average conduit LTV is 103%, compared to 110% 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 11.4% to the most recently available net operating income (NOI). Moody's value reflects a weighted average capitalization rate of 9.7%.

Moody's actual and stressed conduit DSCRs are 1.45X and 1.07X, respectively, compared to 1.54X and 0.98X 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 loan with Moody's structured credit assessment is the Merchandise Mart Loan ($175.0 million - 4.9% of the pool), which represents a 50% pari passu interest in a $350 million first mortgage loan. The property is also encumbered by a $300 million mezzanine loan. The loan is secured by a 3.45 million SF office and design showroom building located in downtown Chicago, Illinois. The sponsor is Vornado Realty, L.P. Google's Motorola Mobility leased 608,000 SF with a lease commencement in September 2013, and moved its headquarters from Libertyville to the property in Feb 2014. The property was 96.4% leased as of December 2013, compared to 95.2% at last review. Moody's current structured credit assessment and stressed DSCR are baa2 (sca.pd) and 1.71X, respectively, compared to baa3 (sca.pd) and 1.45X at last review.

The top three non-specially serviced loans represent 16% of the pool balance. The largest non-specially serviced loan is the Galleria Towers Loan ($232.0 million -- 6.4% of the pool), which is secured by three Class A office buildings, totaling 1.43 million SF, located in Dallas, Texas. The collateral is also encumbered by a $29 million mezzanine loan. The loan is currently on the master servicer's watchlist for low DSCR. The property was 77% leased as of March 2014 compared to 81% leased as of December 2012. Approximately 30% of the NRA will expire in 2014 and 2015. Moody's LTV and stressed DSCR are 141% and 0.67X, respectively, compared to 148% and 0.64X at last review.

The second largest non-specially serviced loan is the Americold Portfolio Loan ($194 million -- 5.4% of the pool), which is secured by four cross-collateralized and cross-defaulted cold storage properties located in Missouri, Texas, Mississippi, and Kansas. The loan has been on the watchlist since April 2008 due to low occupancy, resulting in total revenues significantly lower than the securitization amount. The Mississippi property ceased physical operations in 2010 due to minimal occupancy. As of December 2012, the consolidated occupancy for the other three properties was 73%. Moody's has a high LTV and low stressed DSCR, similar to last review.

The third largest non-specially serviced loan is the Colony IV Portfolio Loan ($144 million -- 4.0% of the pool). The loan is secured by 25 properties, comprised of office, industrial, and flex space and has been on the watchlist since April 2013, due to Low DSCR as a result of low occupancy. As of December 2013, the consolidated occupancy was 65%, compared to 70% as of December 2012. Moody's has a high LTV and low stressed DSCR, in excess of 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.

Moody's did not receive or take into account a third-party assessment on the due diligence performed regarding the underlying assets or financial instruments related to the monitoring of this transaction in the past six months.

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 rating action on the support provider and in relation to each particular 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 rating action, and whose ratings may change as a result of this 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.

Kevin Li
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

Sandra Ruffin
VP - Senior Credit Officer
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

Moody's Affirms Twenty Classes of JPMCC 2006-LDP9
No Related Data.
© 2021 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 CREDIT RATINGS AFFILIATES ARE THEIR CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY’S (COLLECTIVELY, “PUBLICATIONS”) MAY INCLUDE SUCH CURRENT OPINIONS. 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 APPLICABLE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS (“ASSESSMENTS”), AND OTHER 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. AND/OR ITS AFFILIATES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES ITS 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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