DBRS Confirms All Classes of Bear Stearns Commercial Mortgage Securities Trust, Series 2007-TOP28

DBRS Limited (DBRS) has today confirmed all classes of the Commercial Mortgage Pass-Through Certificates, Series 2007-TOP28 issued by Bear Stearns Commercial Mortgage Securities Trust, Series 2007-TOP28 as follows:

-- Class A-1A at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class A-M at AAA (sf)
-- Class A-J at A (low) (sf)
-- Class B at BBB (sf)
-- Class C BBB (low) (sf)
-- Class D at B (high) (sf)
-- Class E at CCC (sf)
-- Class F at CCC (sf)

All trends are Stable, with the exception of Class E and Class F, which have ratings that do not carry trends.

The rating confirmations reflect the overall stability of the pool, which has experienced a collateral reduction of 48.3% since issuance as a result of scheduled amortization, loan repayment at maturity, principal proceeds recovered and losses realized from loan liquidations. As of the March 2017 remittance, 128 of the original 209 loans remain in the pool with an aggregate outstanding balance of $910.7 million. Since April 2016, 38 loans have successfully repaid, contributing to a principal paydown of $433.1 million. To date, 17 loans have been liquidated from the trust, representing an aggregate realized loss to the trust of $55.7 million.

In the next six months, 127 of the remaining 128 loans in the trust (representing 98.3% of the pool balance) have scheduled maturities, with the largest concentrations in August 2017 (36 loans; 26.2% of the pool balance) and September 2017 (49 loans; 35.9% of the pool balance). The transaction benefits from defeasance collateral, as 23 loans, representing 16.9% of the current pool balance, are fully defeased. Based on the most recently reported financials available for the underlying loans, the transaction has a weighted-average (WA) debt service coverage ratio (DSCR) and an exit debt yield of 1.50 times (x) and 11.5%, respectively.

As of the March 2017 remittance report, there are 36 loans on the servicer’s watchlist and none in special servicing. Excluding the two defeased loans, the top 15 loans reported a WA DSCR of 1.34x based on the most recently reported financials available for each loan; however, this figure is slightly depressed because of an artificially low DSCR reported for the largest loan (3 Penn Plaza, Prospectus ID#2; 11.1% of the pool). This property is fully leased to a single-tenant user who operates on a triple net lease paying all operating expenses directly. As a result, the financials reported by the servicer do not include operating expense reimbursements.

At issuance, DBRS shadow-rated two loans: 3 Penn Plaza and Turnpike Shopping Center (Prospectus ID#63, 1.1% of the pool). DBRS has today confirmed that the performance of the 3 Penn Plaza loan remains consistent with investment-grade loan characteristics, whereas the shadow rating on the Turnpike Shopping Center loan has been removed as it has fully defeased.

The ratings assigned to the Class A-J through Class D certificates materially deviate from the higher ratings implied by the Large Pool Multi-Borrower Parameters. DBRS considers this to be a methodology deviation when there is a rating differential of three or more notches between the assigned rating and the rating implied by the Large Pool Multi-Borrower Parameters; in this case, the assigned ratings reflect uncertain loan level event risk associated with the significant upcoming loan maturities.

DBRS has provided updated loan-level commentary and analysis for the largest 15 loans in the pool, as well as the watchlisted 475 School Street loan (Prospectus ID#32; 1.6% of 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.

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

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.

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.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.