DBRS Morningstar Confirms All Classes and Maintains Negative Trends on Three Classes of JPMCC 2012-CIBX Mortgage Trust

DBRS, Inc. (DBRS Morningstar) confirmed the ratings of the following classes of Commercial Mortgage Pass-Through Certificates, Series 2012-CIBX, issued by JPMCC 2012-CIBX Mortgage Trust:

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

DBRS Morningstar maintains Negative trends for Classes F, X-B, and G. All other trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction since issuance, with DBRS Morningstar maintaining the Negative trends for three classes, as noted above, to reflect its outlook for some of the largest loans in the pool that have reported cash flow declines since issuance. DBRS Morningstar originally assigned the Negative trends in February 2018 as the largest loan in the pool, theWit Hotel (Prospectus ID#2, 9.7% of the pool balance), reported significant performance declines. While performance for the loan has since improved, DBRS Morningstar is concerned about the impact of the Coronavirus Disease (COVID-19) pandemic and its effect on hospitality properties. Hotels across the country are reporting sharp drops in occupancy rates as efforts to contain the virus’ spread have affected travel plans through the rest of the spring and into the summer of 2020. DBRS Morningstar has requested specifics from the servicer regarding the impact for this and other large loans backed by hotels in this pool (including Residence Inn Palo Alto (Prospectus ID#11, 3.8% of the pool) and Doubletree Hotel & Suites – Pittsburgh, PA (Prospectus ID#20, 2.1% of the pool)). As DBRS Morningstar receives responses, it will update the loan-level commentary in the DBRS Viewpoint platform to reflect any new information.

Additionally, DBRS Morningstar is closely monitoring the Jefferson Mall (Prospectus ID#4, 7.7% of the pool) and Southpark Mall (Prospectus ID#5, 7.2% of the pool) loans, as both regional malls lost anchor tenants since 2017 and are sponsored by the financially weak CBL & Associates Properties. Finally, Plaza Centro (Prospectus ID#16, 3.0% of the pool balance) is on the DBRS Morningstar Hotlist after the anchored retail center in Caguas, Puerto Rico, unexpectedly lost its Kmart anchor in December 2019.

At issuance, the pool consisted of 49 loans secured by 59 commercial and multifamily properties with a trust balance of $1.3 billion. As of the February 2020 remittance, there were 40 loans secured by 49 commercial and multifamily properties remaining in the pool with a trust balance of $804.6 million, representing a 37.5% collateral reduction. Over the previous 12 months, there have been two loans that have been repaid in full, including the specially serviced loan One Upland Road. Additionally, there were four loans, representing 14.5% of the pool balance, that fully defeased in the past 12 months, with a total of 10 loans, representing 26.0% of the pool balance, that were fully defeased as of February 2020.

The pool is concentrated by property type; retail properties represent 52.3% of the pool balance, primarily consisting of the Jefferson Mall and Southpark Mall loans. Retail properties are also reporting immediate impacts amid the coronavirus outbreak, as property owners, retailers, and restauranteurs alike have closed locations and entire malls and shopping centers have shut down to help curb the virus’ spread. As the pandemic continues, DBRS Morningstar believes those properties already showing performance declines will be the most significantly affected and is watching those loans in this and other rated pools closely for developments.

As of the February 2020 remittance, there were eight loans, representing 26.5% of the pool balance, on the servicer’s watchlist and no loans in special servicing. The largest watchlist loan is the previously mentioned theWit Hotel. For additional information on that and other watchlist loans, please see the DBRS Viewpoint platform, for which information has been provided below.

DBRS Morningstar is monitoring the upcoming loan maturities for the nondefeased loans. There are 11 loans, representing 23.0% of the pool balance, that are scheduled to mature in 2021. The remainder of the nondefeased loans will mature in 2022.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework and its methodologies can be found at: https://www.dbrsmorningstar.com/research/357792.

Classes X-A and X-B are interest-only (IO) certificates that reference a single rated tranche or multiple rated tranches. The IO rating mirrors the lowest-rated applicable reference obligation tranche adjusted upward by one notch if senior in the waterfall.

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

DBRS Morningstar provides updated analysis and in-depth commentary in the DBRS Viewpoint platform for the following loans in the transaction:

-- Prospectus ID#2 – theWit Hotel (9.7% of the pool)
-- Prospectus ID#3 – 100 West Putnam (8.7% of the pool)
-- Prospectus ID#4 – Jefferson Mall (7.7% of the pool) – DBRS Morningstar Hotlist Loan
-- Prospectus ID#5 – Southpark Mall (7.2% of the pool)
-- Prospectus ID#16 – Plaza Centro (3.0% of the pool) – DBRS Morningstar Hotlist Loan

For complimentary access to this content, please register for the DBRS Viewpoint platform at www.viewpoint.dbrsmorningstar.com The platform includes issuer and servicer data for most outstanding CMBS transactions (including non-DBRS Morningstar rated), as well as loan-level and transaction-level commentary for most DBRS Morningstar-rated and -monitored transactions.

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

The principal methodology is North American CMBS Surveillance Methodology, which can be found on dbrsmorningstar.com under Methodologies & Criteria. For a list of the structured-finance-related methodologies that may be used during the rating process, please see the DBRS Morningstar Global Structured Finance Related Methodologies document, which can be found on dbrsmorningstar.com in the Commentary tab under Regulatory Affairs. 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.

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/357883.

For more information regarding structured finance rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/358308.

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

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the rating process. Please note a sensitivity analysis is not performed for CMBS bonds rated CCC or lower. The DBRS Morningstar long-term rating scale definition indicates that ratings of CCC or lower are assigned when the bond is highly likely to default or default is imminent, thereby prevailing over a sensitivity analysis.

Generally, the conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. DBRS Morningstar’s outlooks and ratings are monitored.

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

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