DBRS Confirms Ratings of Morgan Stanley Capital I Trust, Series 2007-TOP25

DBRS Limited (DBRS) has today confirmed the ratings of the Commercial Mortgage Pass-Through Certificates, Series 2007-TOP25 (the Certificates) issued by Morgan Stanley Capital I Trust, Series 2007-TOP25 as follows:

-- Class X at AAA (sf)
-- Class A-J at BBB (low) (sf)
-- Class B at B (sf)
-- Class C at CCC (sf)

All trends are Stable with the exception of Class C, which has a rating that does not carry a trend.

The rating confirmations reflect the current overall performance of the transaction. As of the February 2017 remittance, the trust has a current balance of $134.9 million with 14 of the original 204 loans remaining in the pool. To date, there has been collateral reduction of 91.3% since issuance. Since the transaction was placed Under Review with Developing Implications in December 2016, 17 loans have successfully repaid. The six loans that failed to repay at their respective loan maturities are now in special servicing. The remaining eight loans mature in 2021 and 2026 and are reporting a weighted-average (WA) debt service coverage ratio (DSCR) of 2.08 times and a WA debt yield of 16.4%, based on the most recently reported financials. Given the paydown, the pool is concentrated by loan size, with the three largest loans representing 73.8% of the total pool balance. Additionally, there is also significant property type concentration, with ten loans representing 87.0% of the pool secured by retail assets.

As of the February 2017 remittance report, there are six loans, representing 75.3% of the pool balance, in special servicing for maturity default, with initial respective loan maturity dates occurring between September 2016 and January 2017, including the largest loan in the pool (Prospectus ID#3, Shoppes at Park Place; 52.6% of the pool balance). Given the recent transfer dates, workout strategies are still being determined, and updated appraisals have been ordered but not yet finalized; at this time, DBRS anticipates that the cumulative losses that will be realized at the loans’ resolutions will be contained to the unrated Class D bond. Additionally, there are two loans representing 5.9% of the pool balance on the servicer’s watchlist for credit-related concerns.

DBRS has provided updated loan level commentary and analysis for the remaining loans in the pool in the DBRS CMBS IReports platform. To view these and future loan level updates provided as part of DBRS’s ongoing surveillance for this transaction, please log into DBRS CMBS IReports at www.ireports.dbrs.com.

The rating assigned to Class B materially deviates from the lower rating implied by the quantitative results. DBRS considers a material deviation to be a rating differential of three or more notches between the assigned rating and the rating implied by the quantitative results that is a substantial component of a rating methodology; in this case, the assigned ratings reflect the uncertain loan-level event risk associated with the resolution of the loans in special servicing.

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

The principal methodologies are North American CMBS Rating Methodology (January 2017) and CMBS North American Surveillance (December 2016), which can be found on dbrs.com under Methodologies.

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