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Rating Action:

Moody's Downgrades Four and Affirms 17 CMBS Classes of JPMCC 2003-CIBC6

Global Credit Research - 13 Jan 2011

Approximately $889.9 Million of Structured Securities Affected

New York, January 13, 2011 -- Moody's Investors Service (Moody's) downgraded the ratings of four classes and affirmed 17 classes of J.P. Morgan Chase Commercial Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2003-CIBC6 as follows:

Cl. A-1, Affirmed at Aaa (sf); previously on Aug 13, 2003 Definitive Rating Assigned Aaa (sf)

Cl. A-2, Affirmed at Aaa (sf); previously on Aug 13, 2003 Definitive Rating Assigned Aaa (sf)

Cl. B, Affirmed at Aaa (sf); previously on Jul 9, 2007 Upgraded to Aaa (sf)

Cl. C, Affirmed at Aa2 (sf); previously on Jul 23, 2007 Upgraded to Aa2 (sf)

Cl. D, Affirmed at A1 (sf); previously on Jul 23, 2007 Upgraded to A1 (sf)

Cl. E, Affirmed at A3 (sf); previously on Jul 23, 2007 Upgraded to A3 (sf)

Cl. F, Affirmed at Baa1 (sf); previously on Jul 23, 2007 Upgraded to Baa1 (sf)

Cl. G, Affirmed at Baa3 (sf); previously on Aug 13, 2003 Definitive Rating Assigned Baa3 (sf)

Cl. H, Affirmed at Ba1 (sf); previously on Aug 13, 2003 Definitive Rating Assigned Ba1 (sf)

Cl. J, Affirmed at Ba2 (sf); previously on Aug 13, 2003 Definitive Rating Assigned Ba2 (sf)

Cl. K, Downgraded to B2 (sf); previously on Aug 13, 2003 Definitive Rating Assigned Ba3 (sf)

Cl. L, Downgraded to Caa1 (sf); previously on Aug 13, 2003 Definitive Rating Assigned B1 (sf)

Cl. M, Downgraded to Caa2 (sf); previously on Aug 13, 2003 Definitive Rating Assigned B2 (sf)

Cl. N, Downgraded to Caa3 (sf); previously on Aug 13, 2003 Definitive Rating Assigned B3 (sf)

Cl. AC-1, Affirmed at Aaa (sf); previously on Jul 23, 2007 Upgraded to Aaa (sf)

Cl. AC-2, Affirmed at Aaa (sf); previously on Jul 23, 2007 Upgraded to Aaa (sf)

Cl. AC-3, Affirmed at Aaa (sf); previously on Jul 23, 2007 Upgraded to Aaa (sf)

Cl. BM-1, Affirmed at Aa2 (sf); previously on Jul 23, 2007 Upgraded to Aa2 (sf)

Cl. BM-2, Affirmed at A1 (sf); previously on Jul 23, 2007 Upgraded to A1 (sf)

Cl. BM-3, Affirmed at A2 (sf); previously on Jul 23, 2007 Upgraded to A2 (sf)

Cl. X-1, Affirmed at Aaa (sf); previously on Aug 13, 2003 Definitive Rating Assigned Aaa (sf)

RATINGS RATIONALE

The downgrades are due to higher expected losses for the pool resulting from realized and anticipated losses from specially serviced and troubled loans.

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 2.9% of the current balance. At last review, Moody's cumulative base expected loss was 1%. Moody's stressed scenario loss is 6.2% 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 stressed macroeconomic environment and continuing weakness in the commercial real estate and lending markets. Moody's currently views the commercial real estate market as stressed with further performance declines expected in the industrial, office, and retail sectors. Hotel performance has begun to rebound, albeit off a very weak base. Multifamily has also begun to rebound reflecting an improved supply / demand relationship. The availability of debt capital is improving with terms returning towards market norms. Job growth and housing price stability will be necessary precursors to commercial real estate recovery. Overall, Moody's central global scenario remains "hook-shaped" for 2010 and 2011; we expect overall a sluggish recovery in most of the world's largest economies, returning to trend growth rate with elevated fiscal deficits and persistent unemployment levels.

The principal methodology used in this rating was "CMBS: Moody's Approach to Rating Fusion Transactions", published in April 2005.

In addition to methodologies and research available on moodys.com, 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 July 23, 2010. Please see the ratings tab on the issuer / entity page on moodys.com for the last rating action and the ratings history.

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

DEAL PERFORMANCE

As of the December 10, 2012 distribution date, the transaction's aggregate certificate balance has decreased by 15% to $903.5 million from $1.06 billion at securitization. The Certificates are collateralized by 120 mortgage loans ranging in size from less than 1% to 9% of the pool, with the top ten loans representing 29% of the pool. The pool contains one loan with an investment grade credit estimate that represent 8.8% of the pool. Twenty-five loans, representing 28% of the pool, have defeased and are collateralized with U.S. Government securities. Defeasance at last review represented 18% of the pool.

Thirty 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.

Three loans have been liquidated from the pool, resulting in an aggregate realized loss of $4.6 million (40% loss severity overall). At last review the pool had not experienced any losses. Three loans, representing 3% of the pool, are currently in special servicing. Moody's has estimated an aggregate $9.8 million loss (44% expected loss on average) for the specially serviced loans.

Moody's has assumed a high default probability for three poorly performing loans representing 1.4% of the pool and has estimated a $2.6 million aggregate loss (20% expected loss based on a 50% probability default) from these troubled loans.

Moody's was provided with full year 2009 operating results for 80% of the pool. Excluding specially serviced and troubled loans, Moody's weighted average LTV is 83% compared to 85% at Moody's prior review. Moody's net cash flow reflects a weighted average haircut of 11.5% to the most recently available net operating income. Moody's value reflects a weighted average capitalization rate of 9.9%.

Excluding specially serviced and troubled loans, Moody's actual and stressed DSCRs are 1.51X and 1.37X, respectively, compared to 1.21X and 1.21X 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 the risk of multiple notch downgrades under adverse circumstances. The credit neutral Herf score is 40. The pool has a Herf of 32 compared to 45 at Moody's prior review.

The loan with a credit estimate is the Battlefield Mall Loan ($77.3 million -- 8.8%), which represents the senior component of a $97 million mortgage loan secured by a 1.0 million square foot regional mall located in Springfield, Missouri. The property is also encumbered by a $14.5 million subordinate note which is the security for the non-pooled classes BM-1, BM-2 and BM-3. The mall is anchored by J.C. Penney, two Dillard's stores, Sears and Macy's. Performance has been stable since last review. Moody's current credit estimate and stressed DSCR are Aa1 and 1.77X, respectively, compared to Aa1 and 1.63X at last review.

The top three performing conduit loans represent 8.7% of the pool balance. The largest loan is the International Paper Office Loan ($31.3 million -- 3.5%), which is secured by a 214,060 square foot Class A office building located in Memphis, Tennessee. The property is 100% leased to International Paper through April 2017. The loan has amortized 6% since last review. Moody's LTV and stressed DSCR are 83% and 1.21X, respectively, compared to 96% and 1.04X at last review.

The second largest loan is the Shelbyville Road Plaza Loan ($23.4 million - 2.6%), which is secured by a 250,057 square foot community shopping center located in Louisville, Kentucky. The property was 65% leased as of December 2009 compared to 93% at last review. Moody's LTV and stressed DSCR are 97% and 1.03X, respectively, compared to 77% and 1.30X at last review.

The third largest loan is the Tices Corner Retail Marketplace Loan ($22.1 million - 2.5%), which is secured by a 119,114 square foot retail center located in Woodcliff Lake, NJ. The property was 100% leased as of March 2010, similar to the level at last review. Moody's LTV and stressed DSCR are 62% and 1.62X, respectively, compared to 79% and 1.24X at last review.

REGULATORY DISCLOSURES

Information sources used to prepare the credit rating are the following: parties involved in the ratings, parties not involved in the ratings, public information, confidential and proprietary Moody's Investors Service information, and confidential and proprietary Moody's Analytics' information.

Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purpose of maintaining a credit rating.

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.

Please see ratings tab on the issuer/entity page on Moodys.com for the last rating action and the rating history.

The date on which some Credit Ratings were first released goes back to a time before Moody's Investors Service's Credit Ratings were fully digitized and accurate data may not be available. Consequently, Moody's Investors Service provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see the Credit Policy page on Moodys.com for the methodologies used in determining ratings, further information on the meaning of each rating category and the definition of default and recovery.

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

New York
Sandra Ruffin
VP - Senior Credit Officer
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 Downgrades Four and Affirms 17 CMBS Classes of JPMCC 2003-CIBC6
No Related Data.
© 2018 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

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