DBRS Upgrades One Class and Downgrades One Class of Morgan Stanley Capital I Trust, Series 2007-TOP27

DBRS Limited (DBRS) upgraded the rating on the following class of the Commercial Mortgage Pass-Through Certificates, Series 2007-TOP27 issued by Morgan Stanley Capital I Trust, Series 2007-TOP27 as follows:

-- Class A-J to A (low) (sf) from BBB (high) (sf)

DBRS also downgraded the rating on the following class:

-- Class D to C (sf) from CCC (sf)

In addition, DBRS confirmed the ratings on the following classes:

-- Class B at BB (sf)
-- Class C at B (low) (sf)

All trends are Stable, with the exception of Class D, which is assigned a rating category that does not carry a trend.

The rating upgrade for Class A-J reflects the increased credit support to the bond as a result of the successful repayment of Classes A-4, A-1A, A-M and A-MFL. With those repayments, the Class A-J certificate is now the most senior class outstanding. Over the past year, 145 loans have been repaid, representing a principal paydown of approximately $1.4 billion. As of the November 2017 remittance, only seven loans remain in the trust, with an outstanding balance of $289.4 million. This represents a collateral reduction of 89.4% since issuance as a result of successful loan repayments, scheduled amortization and realized losses and recovered proceeds from loans liquidated from the pool.

As of the November 2017 remittance, all loans are reporting YE2016 financials and, based on those figures, the weighted-average (WA) debt-service coverage ratio (DSCR) and WA debt yield were 1.41 times (x) and 10.8%, respectively. The pool is concentrated as the largest loan, Prospectus ID#1 – 360 Park Avenue South, represents 75.2% of the current pool balance. The loan is scheduled to mature in June 2022 and reported a stable YE2016 DSCR and debt yield of 1.50x and 11.7%, respectively. The loan is secured by a 451,800 sf Class B office property located in the Kips Bay area of Manhattan, New York. The collateral is fully leased to investment-grade tenant and lease guarantor, RELX Group (formerly known as Reed Elsavier Inc.). The property is currently 100% subleased, which has been the case for several years. Although the lease for RELX Group expires within close proximity of the loan’s maturity date, the stable physical occupancy rate that has been historically maintained, as well as the stability of the larger market, provide mitigants to that heightened refinance risk.

There are currently four loans in special servicing, representing 20.9% of the current pool balance. Three of those loans were recently transferred to the special servicer for maturity default. For additional information on those loans, please see the DBRS Loan Commentary on the DBRS Viewpoint platform.

All ratings will be subject to ongoing surveillance, which could result in ratings being upgraded, downgraded, placed under review, confirmed or discontinued by DBRS.

DBRS has provided updated loan-level commentary and analysis for larger and specially serviced loans in the transaction, in the DBRS Viewpoint platform. Registration is free. To view these and future loan-level updates provided as part of DBRS’s ongoing surveillance for this transaction, please register or log into DBRS Viewpoint at viewpoint.dbrs.com.

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

The principal methodology is CMBS North American Surveillance, which can be found on dbrs.com under Methodologies. For a list of the Structured Finance-related methodologies that may be used during the rating process, please see the DBRS Global Structured Finance Related Methodologies document on www.dbrs.com. Please note that not every related methodology listed under a principal Structured Finance asset class methodology may be used to rate or monitor an individual structured finance or debt obligation.

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 under Related Documents or by contacting us at info@dbrs.com.

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

The rated entity or its related entities did participate in the rating process for this rating action. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

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