Three Ratings Raised, One Rating Affirmed From Bear Stearns Commercial Mortgage Securities Trust 2005-PWR9

OVERVIEW 
  • We raised our ratings on classes D, E, and F from Bear Stearns Commercial Mortgage Securities Trust 2005-PWR9, a U.S. CMBS transaction.
  • At the same time, we affirmed our rating on class C from the same transaction.
  • These rating actions reflect our analysis of the transaction, which included a review of the credit characteristics and performance of the remaining assets in the pool, the transaction's structure, and the liquidity available to the trust.
NEW YORK (S&P Global Ratings) Dec. 7, 2018--S&P Global Ratings today raised 
its ratings on the class D, E, and F commercial mortgage pass-through 
certificates from Bear Stearns Commercial Mortgage Securities Trust 2005-PWR9, 
a U.S. commercial mortgage-backed securities (CMBS) transaction. In addition, 
we affirmed our rating on the class C certificates from the same transaction 
(see list).    
 
For the affirmation and upgrades, our credit enhancement expectations were in 
line with the affirmed or raised rating levels.

The upgrades on classes D, E, and F also reflect the deleveraging of the pool, 
resulting from the liquidation of specially serviced assets and the amount of 
defeased loans in the transaction ($44.1 million, 39.6% of the trust).

While available credit enhancement levels suggest further positive rating 
movements on classes E and F, our analysis also considered the potential for 
reduced liquidity support to these classes from the specially serviced assets 
($18.1 million, 16.3%) and the transaction's concentration to loans secured by 
retail properties. Specifically, the Burlington Coat Factory loan ($5.7mm, 
5.11%) did not pay off at the loan's anticipated repayment date in September 
2015. Furthermore, the property securing the loan has substantial tenant 
rollover risk in 2020 when the largest tenant, Burlington Coat Factory, lease 
will expire.     

TRANSACTION SUMMARY
As of the Nov. 13, 2018, trustee remittance report, the collateral pool 
balance was $111.4 million, which is 5.2% of the pool balance at issuance. The 
pool currently includes 14 loans and four real estate owned (REO) assets, down 
from 200 loans at issuance. Four of these assets ($18.1 million, 16.3%) are 
with the special servicer, six ($44.1 million, 39.6%) are defeased, and two 
($12.7 million, 11.4%) are on the master servicer's watchlist.

We calculated a 1.33x S&P Global Ratings weighted average debt service 
coverage (DSC) and 59.4% S&P Global Ratings weighted average loan-to-value 
(LTV) ratio using a 7.65% S&P Global Ratings weighted average capitalization 
rate. The DSC, LTV, and capitalization rate calculations exclude the specially 
serviced assets and the defeased loans. 

The top 10 nondefeased loans have an aggregate outstanding pool trust balance 
of $65.1 million (58.4%). Adjusting the servicer-reported numbers, we 
calculated an S&P Global Ratings weighted average DSC and LTV of 1.33x and 
60.7%, respectively, for six of the top 10 nondefeased loans. The remaining 
loans are specially serviced and discussed below.

To date, the transaction has experienced $116.2 million in principal losses, 
or 5.4% of the original pool trust balance. We expect losses to reach 
approximately 6.0% of the original pool trust balance in the near term, based 
on losses incurred to date and additional losses we expect upon the eventual 
resolution of the four specially serviced assets.

CREDIT CONSIDERATIONS
As of the Nov. 13, 2018, trustee remittance report, four assets in the pool 
were with the special servicer, C-III Asset Management LLC. Details of the two 
largest specially serviced assets, both of which are top 10 nondefeased 
assets, are as follows: 

The Purple Creek Plaza - Jackson Retail Portfolio REO asset ($6.7 million, 
6.0%) is the fourth-largest nondefeased asset in the pool and has a total 
reported exposure of $7.8 million. The asset is a retail property, built in 
1989, covering 81,636 sq. ft., located in Jackson, Miss. The loan transferred 
to the special servicer in May 2015 and became REO on May 2016. An ARA of $1.8 
million is in effect against this asset. We expect a moderate loss upon this 
asset's eventual resolution.

The Wright Executive Center REO asset ($5.9 million, 5.3%) is the 
fifth-largest nondefeased asset in the pool and has a total reported exposure 
of $6.2 million. At origination, two office properties secured the loan. 
Currently, only one of the properties remains as collateral for the trust. The 
asset is a 59,555 sq. ft. office property built in 1987, located in Fairborn, 
Ohio. The loan transferred to the special servicer in August 2015 and became 
REO on July 2017. An ARA of $3.1 million is in effect against this asset. We 
expect a significant loss upon this asset's eventual resolution.

The two remaining assets with the special servicer each have individual 
balances that represent less than 2.8% of the total pool trust balance. We 
estimated losses for the four specially serviced assets, arriving at a 
weighted-average loss severity of 67.1%.