Fitch Upgrades 1 Class from J.P. Morgan 1999-C7; Assigns Outlooks

Business Wire, Oct 14, 2008

CHICAGO -- Fitch Ratings upgrades and assigns Ratings Outlooks to J.P. Morgan Commercial Mortgage Finance Corp.'s mortgage pass-through certificates, series 1999-C7, as follows:

--$38.1 million class F to 'AA ' from 'AA'; Outlook Positive.

Additionally, Fitch affirms and assigns Ratings Outlooks to the following classes:

--Interest-only class X at 'AAA'; Outlook Stable;

--$0.6 million class C at 'AAA'; Outlook Stable;

--$52.1 million class D at 'AAA'; Outlook Stable;

--$12.0 million class E at 'AAA'; Outlook Stable;

--$26.0 million class G at 'BB'; Outlook Positive;

--$4.0 million class H at 'BB-'; Outlook Stable.

The $23.4 million class NR certificates are not rated by Fitch. The class A-1, A-2, and B certificates have paid in full.

The upgrade reflects increased credit enhancement due to scheduled amortization and loan payoffs since last review of 7.8%. Classes F and G have been assigned Positive Outlooks due to anticipated future paydown and increased credit enhancement. The outlooks reflect likely direction of any rating changes over the next one to two years.

As of the September 2008 distribution date, the pool's aggregate balance has been reduced 80.5%, to $156.3 million from $801.4 million at issuance. Three loans (37.4%), including the largest loan in the pool, have defeased.

There are currently three loans (11.5%) in special servicing. One asset (4.7%) has been in special servicing since 2003 and real estate-owned since 2004. The loan is secured by 107,052 square feet of office space in Ridgeland, MS, a Jackson-area suburb. The properties consist of two office buildings; one of the buildings has recently undergone significant repairs. The special servicer is working to lease up vacant space and is marketing the properties for sale. Recent valuations of the asset indicate losses upon liquidation.

The second largest specially serviced asset (4.5%) is secured by a multifamily property located in Okemos, MI. The property is currently 91% occupied, but has suffered from declining market rents and an increase in concessions. The property is currently for sale with losses expected upon liquidation.

Eighteen (79.5%) of the remaining 38 loans in the transaction have an anticipated repayment date in either 2008 or 2009. These include the three defeased loans (37.4%). The 35 non-defeased loans have a year-end 2007 weighted average debt service recovery ratio (DSCR) of 1.42x and a weighted average interest rate of 7.33%.

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