Fitch Affirms BSCMS 2007-PWR17

NEW YORK--(BUSINESS WIRE)--

Fitch Ratings has affirmed all classes of Bear Stearns Commercial Mortgage Securities Trust, series 2007-PWR17 (BSCMS 2007-PWR17) commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The affirmations of the investment-grade classes are due to sufficient credit enhancement to offset Fitch expected losses. Fitch modeled losses of 5.6% of the remaining pool; expected losses on the original pool balance total 10.7%, including $234 million (7.2% of the original pool balance) in realized losses to date. Current cumulative interest shortfalls totaling $4.5 million are affecting classes C through J.

As of the July 2016 distribution date, the pool's aggregate principal balance has been paid down by 37.52% to $2 billion from $3.26 billion at issuance. Fitch has identified 52 (25.8%) Fitch Loans of Concern, of which 3 (1.72%) are specially serviced. In addition, there are 19 (11.3%) defeased loans within the pool.

The largest contributor to expected losses is a 136,206 square foot (sf) shopping center located in Tyngsboro, MA, approximately 40 miles northwest of Boston on the border of New Hampshire (0.9%). The loan transferred to special servicing in March 2014 following the loss of its largest tenant, TJ Maxx (18.3% of net rentable area [NRA]), which vacated in May 2013. More recently, the property suffered further from the departure of Trader Joe's and several other small tenants. As of May 2016, the property was 62% occupied as reported by the special servicer. The asset became real estate owned (REO) in July 2014.

The next largest contributor to expected losses is a 173,101 sf office building located in Mobile, AL (0.6%). Loan transferred to Special Servicing in January 2013 due to imminent payment default. The asset became REO in August 2014. Common area improvements have been completed and the special servicer is marketing the available space in an effort to improve occupancy. As of May 2016, occupancy was 76%.

RATING SENSITIVITIES

The Rating Outlooks on classes A-4 and A-1A are expected to remain Stable based on continued transaction paydown and the class' senior positions within the capital structure. Rating Outlooks on class A-M and A-MFL remain Negative given the current pool metrics, including specially serviced loans and Fitch Loans of Concern, and the increased potential for adverse selection as the transaction nears its 10-year maturity date (2017), when approximately 94% of the pool matures.

DUE DILIGENCE USAGE

No third-party due diligence was provided or reviewed in relation to this rating action.

Fitch affirms the following classes and revises REs as indicated:

--$1.1 billion class A-4 at 'AAAsf'; Outlook Stable;

--$226 million class A-1A at 'AAAsf'; Outlook Stable;

--$231 million class A-M at 'AAAsf'; Outlook Negative;

--$95 million class A-MFL at 'AAAsf'; Outlook Negative;

--$269 million class A-J at 'CCCsf'; RE 100%;

--$28.5 million class B at 'CCsf'; RE 75%;

--$44.8 million class C at 'CCsf'; RE 0%;

--$24.5 million class D at 'Csf'; RE 0%;

--$20.4 million class E at 'Csf'; RE 0%;

--$18.2 million class F at 'Dsf'; RE 0%;

--$0 class G at 'Dsf'; RE 0%;

--$0 class H at 'Dsf'; RE 0%;

--$0 class J at 'Dsf'; RE 0%;

--$0 class K at 'Dsf'; RE 0%;

--$0 class L at 'Dsf'; RE 0%;

--$0 class M at 'Dsf'; RE 0%;

--$0 class N at 'Dsf'; RE 0%;

--$0 class O at 'Dsf'; RE 0%;

--$0 class P at 'Dsf'; RE 0%;

--$0 class Q at 'Dsf'; RE 0%.

The class A-1, A-2, A-3 and A-AB certificates have paid in full. Fitch does not rate the class S certificates. Fitch previously withdrew the ratings on the interest-only class X-1 and X-2 certificates.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 18 Jul 2016)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=884963

Criteria for Rating Caps and Limitations in Global Structured Finance Transactions (pub. 16 Jun 2016)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=882401

Global Structured Finance Rating Criteria (pub. 27 Jun 2016)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=883130

U.S. and Canadian Fixed-Rate Multiborrower CMBS Surveillance and U.S. Re-REMIC Criteria (pub. 13 Nov 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=873395

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form
https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1009653

Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1009653

Endorsement Policy
https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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