Fitch Upgrades 4 Classes of JP Morgan Chase 2003-ML1

2008-04-15 23:55:34 -

- Fitch Ratings upgrades JP Morgan Chase's (JPMC) commercial mortgage pass-through certificates, series 2003-ML1, as follows:

--$23.2 million class F to 'AA+' from 'AA-';

--$9.3 million class G to 'AA-' from 'A';

--$16.3 million class H to 'A-' from 'BBB+';

--$10.5 million class J to 'BBB' from 'BBB-'.

Fitch also affirms the following classes:

--$145.8 million class A-1 at 'AAA';

--$387.1 million class A-2 at 'AAA';

--Interest only class X-1 at 'AAA';

--Interest only class X-2 at 'AAA';

--$26.7 million class B at 'AAA';

--$10.5 million class C at 'AAA';

--$22.1 million class D at 'AAA';

--$12.8 million class E at 'AAA';

--$5.8 million class K at 'BB';

--$5.8 million class L at 'B+';

--$7 million class M at 'B';

--4.6 million class N at 'B-'.

Fitch does not rate the $12.3 million NR class.

The upgrades reflect stable performance and increased credit enhancement due to the repayment of eight loans and scheduled amortization since Fitch's last rating action. As of the April 2008 distribution date, the pool's aggregate certificate balance has decreased 24.7% to $699.9 million from $929.8 million since issuance. Sixteen loans (23.3%) are defeased.

Fitch has reviewed the performance of the Hyatt Regency Crystal City loan (6.8%), which maintains an investment grade shadow rating. The loan is secured by a 681 full service hotel in Arlington, VA. The whole loan includes the $47.5 million A note and the $12.4 million B note. Only the A note is included in this transaction. As of year-end 2007, occupancy rate was 71.2% with average daily rate (ADR) at $168.22, compared to 68.1% with ADR of $131 at issuance.

Fitch has identified six loans (4.8%) as Fitch loans of concern due to declining performance. The largest Fitch loan of concern (1.4%), which is in special servicing, is a 212 unit multifamily property in Decatur, GA. The loan was transferred to the special servicer after the borrower requested a loan extension. The loan matured on Feb. 1, 2008. The special servicer is in negotiation with the borrower regarding terms of extension and is also preparing to file foreclosure.

The second Fitch loan of concern (1.3%) is secured by a 217,032 square foot (SF) retail property in Winter Springs, FL. The servicer reported Debt Service Coverage Ratio (DSCR) as of Sept. 30, 2007 is 0.84 times (x) with 99% occupancy rate, compared to DSCR of 1.25x with 98.1% occupancy rate at issuance. The decrease in DSCR is primarily due to increase in insurance premiums and expenses.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

Fitch Ratings
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