DBRS Confirms All Classes of JPMCC 2012-CIBX Mortgage Trust

DBRS has today confirmed all classes of JPMCC 2012-CIBX Mortgage Trust as follows:

-- Class A-1, A-2, A-3, A-4, A-4FL, A-4FX, A-S, X-A and X-B at AAA (sf)
-- Class B at AA (sf)
-- Class C at A (sf)
-- Class D at BBB (high) (sf)
-- Class E at BBB (low) (sf)
-- Class F at BB (sf)
-- Class G at B (sf)

The trends on all classes are Stable.

The pool consists of 49 loans, secured by 59 multifamily and commercial properties, with a weighted-average debt service coverage ratio (DSCR) and weighted-average debt yield of 1.40x and 10.1%, respectively. The transaction has experienced 1.0% of collateral reduction since issuance as a result of amortization, with all of the original 49 loans remaining in the pool. The pool benefits from a good refinance outlook, with a weighted-average exit debt yield of 11.25% and a weighted-average Refinance DSCR of 1.36x. Additionally, 20.3% of the current pool balance amortizes on a schedule of 25 years or less. As of the April 2013 remittance, loans representing approximately 63.1% of the current pool balance are reporting partial or full-year 2012 financials. The weighted-average DSCR and weighted-average debt yield for these loans are 1.48x and 11.1%, respectively. There are no loans on the watchlist; however, there is one loan in special servicing, the Doubletree by Hilton JFK.

Doubletree by Hilton JFK (Prospectus ID#12, 2.7% of the current pool balance) is secured by a 385-key full-service hotel in Jamaica, New York, that features a full-service restaurant, a lounge with dinner service, 6,700 sf of meeting space, a fitness center and a rental car desk. The collateral also includes on-site parking for 209 vehicles. John F. Kennedy International Airport is located just south of the subject, and demand at the property is generated largely by airline contracts.

This loan was transferred to special servicing in February 2013 after the franchisor, Hilton Hotels Corporation, sent notice to the borrower that it was terminating its franchise agreement with the property. The borrower contested a failed January 2013 quality assurance inspection and is currently discussing options for replacing the franchisor. Termination of the franchise agreement has been postponed until ongoing litigation between the franchisee and franchisor can be resolved, according to servicer commentary. If ruling is made in favor of Hilton, the borrower would be liable for early termination fees and damages to the franchisor. The borrower has reportedly identified a potential flag replacement in Radisson. To address the potential liability of the borrower should Hilton successfully terminate its agreement, as well as the stress on the property as a result of a potential flag change, DBRS increased the debt load of the loan to include those costs, which increases the loss profile of the loan. This loan’s status in special servicing is not related to monetary performance, as the loan reported a 1.86x DSCR for YE2012 with an occupancy rate of 85%. The borrower is an experienced hotel owner and operator. DBRS will continue to monitor this loan closely as the litigation progresses.

DBRS continues to monitor this transaction in its Monthly CMBS Surveillance Report, with additional information on the DBRS viewpoint for this transaction, including details on the remaining loans in the pool. The May 2013 Monthly Surveillance Report for this transaction will be published shortly. If you are interested in receiving this report, contact us at info@dbrs.com.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The applicable methodologies are CMBS Rating Methodology (January 2012) and CMBS North American Surveillance Methodology (November 2012), which can be found on our website under Methodologies.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.