Chase - Fitch Downgrades 7 Classes from JPMCC 2005-CIBC12; Assigns Outlooks and LS Ratings

Fitch Ratings has taken various rating actions on J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-CIBC12, commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this press release.

The downgrades are the result of Fitch's loss expectations and its prospective views regarding cash flow declines and commercial real estate market values. Fitch forecasts potential losses of 5.2% for this transaction, should market conditions not recover. Today's rating actions are based on the full losses of 5.2% as a majority of loans mature in the next five years. The bonds with Negative Outlooks indicate classes that may be downgraded in the future.

To determine potential defaults for each loan, Fitch assumed cash flow would decline by 10% from year-end 2008. That is consistent with the analysis used in its review of recent vintage transactions whereby cash flow was assumed to decline 15% from year-end 2007 projected over a three-year period. If the stressed cash flow would cause the loan to fall below 0.95 times (x) debt service coverage ratio (DSCR), Fitch assumed the loan would default during the term. To determine losses, Fitch used the above stressed cash flow and applied a market cap rate by property type, ranging between 7.5% and 10%, to derive a value. If the loan balance at default is less than Fitch's derived value, the loan would realize that amount of loss. These loss estimates were reviewed in more detail for loans representing 49.6% of the pool and, in certain cases, revised based on additional information and/or property characteristics.

Approximately 89% of the mortgages mature within the next five years as follows: 8.3% in 2010, 9.3% in 2011 and 7.8% in 2012, 4.7% in 2013, 1.2% in 2014 and 57.7% in 2015.

Fitch identified 48 Loans of Concern (19.5%) within the pool, 13 of which (5.5%) are specially serviced. One of the Fitch Loans of Concern (2.1%) is within the transaction's top 15 loans.

Fitch expects that 14 of the top 15 loans may default at maturity based on an insufficient accrued equity position as calculated in Fitch's refinance test. While defaults are expected, additional losses are not anticipated based on derived values being higher than the current loan amounts. A loan would pass the refinance test if the stressed cash flow would achieve a 1.25x DSCR as calculated based on a 30-year amortization schedule and an 8% coupon. One loan within the top 15 is expected to incur a loss at maturity, Fort Steuben Mall.

The largest contributors to loss are as follows: Fort Steuben Mall (2.1%), Phillips Ranch Industrial Center (0.9%), International Plaza (0.7%), and LXP - The Dial Corporation (0.7%).

The Fort Steuben Mall loan is secured by 685,585 square feet (sf) of an 813,165 sf regional mall in Steubenville, OH, approximately 35 miles west of Pittsburgh, PA. Major tenants at the center include Wal-Mart (30.6% of net rentable area [NRA]), Sears (17.7%), J.C. Penney (8.1%), and Dick's Sporting Goods (7.5%). The mall has experienced a steady decline in performance over the last two years, mainly due to an increase in vacancy and the negative effects the weak economy has had on the subject's local market. The DSCR and occupancy as of first quarter 2009 were 1.02x and 86%, compared with 1.16x and 90% at year-end 2008 and 1.39x and 86% at issuance. Fitch expects the loan will default at maturity, and losses are likely.

The largest specially serviced loan (0.9%) is a 124,894 square foot (sf) retail property in Pomona, CA. The loan transferred to special servicing in March 2009 after a significant increase in vacancy limited the borrower's ability to pay the debt service obligations. The property remains 35% occupied and based on an updated appraisal, losses are expected.

The second largest specially serviced loan (0.7%) is a 34,938 sf retail property in St. Thomas, Virgin Islands. The asset has been real estate owned (REO) since August 2008. The property has suffered from a deteriorating retail environment stemming from reduced vacation travel. The most recent appraisal value indicates losses upon disposition.

The third largest specially serviced loan (0.7%) is secured by a 129,689 sf office building located in Scottsdale, AZ. The loan transferred to special servicing in November 2008 when its sole tenant notified the borrower that it intended to vacate at the end of its lease in December 2008. The property is currently 100% vacant. The property is in foreclosure. Updated appraisal valuation indicates losses are likely.

Fitch has downgraded, removed from Rating Watch Negative, and assigned Loss Severity (LS) Ratings and Outlooks to the following classes:

--$162.5 million Class A-J to 'AA/LS5' from 'AAA'; Outlook Stable;

--$43.3 million Class B to 'BBB/LS5' from 'AA-'; Outlook Stable;

--$19 million Class C to 'BBB-/LS5' from 'A'; Outlook Stable;

--$32.5 million Class D to 'BB/LS5' from 'BBB'; Outlook Stable;

--$27.1 million Class E to 'BB/LS5' from 'BBB-'; Outlook Stable;

--$24.4 million Class F to 'B/LS5' from 'BBB-'; Outlook Stable;

--$24.4 million Class G to 'B-/LS5' from 'BB'; Outlook Negative.

In addition, Fitch affirms and removes the following class from Rating Watch Negative, and assigns an LS Rating and Outlook:

--$29.8 million Class H at 'B-/LS5'; Outlook Negative.

In addition, Fitch affirms the following non-pooled class and revises the Outlook as indicated:

--$50 million Class UHP at 'B-/LS5'; Outlook to Negative from Stable.

Fitch also affirms the following classes and assigns LS ratings, Outlooks and Recovery Ratings (RRs) as indicated:

--$131.4 million Class A-2 at 'AAA/LS1'; Outlook Stable;

--$163.6 million Class A-3A1 at 'AAA/LS1'; Outlook Stable;

--$122.9 million Class A-3A2 at 'AAA/LS1'; Outlook Stable;

--$200 million Class A-3B at 'AAA/LS1'; Outlook Stable;

--$649.3 million Class A-4 at 'AAA/LS1'; Outlook Stable;

--$137.4 million Class A-SB at 'AAA/LS1'; Outlook Stable;

--$216.7 million Class A-M at 'AAA/LS3'; Outlook Stable;

--Interest only Class X-1 at 'AAA'; Outlook Stable;

--Interest only Class X-2 at 'AAA'; Outlook Stable;

--$8.1 million Class J at 'CC/RR3';

--$8.1 million Class K at 'C/RR6';

--$8.1 million Class L at 'C/RR6';

--$5.4 million Class M at 'C/RR6';

--$8.1 million Class N at 'C/RR6';

--$5.4 million Class P at 'C/RR6'.

Fitch does not rate the $26.8 million NR class. Class A-1 has paid in full.

Additional information on Fitch's amended criteria for analyzing recent vintage U.S. CMBS is available in the July 7, 2009 report, 'Surveillance Methodology for Recent Vintage U.S. CMBS' is available at 'www.fitchratings.com' under the following headers:

Structured Finance >> CMBS >> Criteria Reports

Structured Finance >> CMBS >> Special Reports

Additional information is available at 'www.fitchratings.com'.

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.