Fitch Upgrades 6 Classes of BSCMS 2004-PWR4

Fitch Ratings has upgraded six and affirmed eight classes of Bear Stearns Commercial Mortgage Securities Trust (BSCMSI) commercial mortgage pass-through certificates series 2004-PWR4. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrades reflect the increased credit enhancement to the notes from loan paydowns including $71 million in full payoffs from three weaker performing loans that had been modeled with losses. There are 19 loans remaining in the pool, two of which are defeased (35.7% of the pool), including the largest loan in the pool. Fitch has designated 10 loans (52.5%) as Fitch Loans of Concern, which includes two specially serviced assets (3.5%). Fitch modeled losses of 6.6% of the remaining pool; expected losses on the original pool balance total 2.2%, including losses already incurred. The pool has experienced $11.3 million (1.2% of the original pool balance) in realized losses to date.

As of the April 2014 distribution date, the pool's aggregate principal balance has been reduced by 84.5% to $148 million from $954.9 million at issuance. Interest shortfalls are currently affecting classes P and Q.

The largest contributor to Fitch's modeled losses is secured by three flex buildings (4.3%) totaling 117,798 square feet (sf) located in Buffalo Grove, IL. The occupancy at the property has been at 56.6% over the past two years as the borrower has been unable to fill the vacant space. In addition, there is significant rollover with 22.6% of the net rentable area expiring in July 2014 and the remaining 34% of space expiring in October 2015.

The next largest contributor to Fitch's modeled losses is secured by a 137,736 sf anchored retail property (5.4%) located in Charlotte, NC. At origination, the property was located adjacent to a Wal-Mart that subsequently closed and relocated four miles from the subject property. The relocation has led to a substantial decrease in traffic to the property and getting tenants to renew at the property has been difficult. However, occupancy was 97.7% as of year-end 2013. The largest tenants at the property include Food Lion, It's Fashion Metro, and Ross Dress for Less.

The third largest contributor to Fitch's modeled losses is secured by a 116-unit garden apartment and townhome complex (2%) located in Jonesboro, GA. The property has suffered as a result of declining performance of the Atlanta metro. DSCR at the property dropped to 0.66x at year-end 2013 from 1.04x at year-end 2012 mainly due to an increase in vacancy.

RATING SENSITIVITIES

The ratings on the class A-3 through H notes are expected to be stable as the credit enhancement remains high. However, further upgrades are not anticipated due to the concentration of loans in secondary and tertiary markets and the anticipation that several loans will have difficulty refinancing. The class J through N notes may be subject to further downgrades as losses are realized.

Fitch has taken the following actions as indicated:

--$48.3 million class A-3 affirmed at 'AAAsf'; Outlook Stable;

--$19.1 million class B upgraded to 'AAAsf' from 'AAsf'; Outlook Stable;

--$8.4 million class C upgraded to 'AAsf' from 'AA-sf'; Outlook Stable;

--$14.3 million class D affirmed at 'Asf', Outlook Stable;

--$9.5 million class E upgraded to 'Asf' from 'BBBsf'; Outlook Stable;

--$9.5 million class F upgraded to 'BBB-sf' from 'BBsf'; Outlook Stable;

--$8.4 million class G upgraded to 'BBsf' from 'Bsf'; Outlook to Stable from Negative;

--$10.7 million class H upgraded to 'Bsf' from 'CCCsf'; assigns Outlook Stable;

--$3.6 million class J affirmed at 'CCCsf'; RE 100%;

--$4.8 million class K affirmed at 'CCCsf', RE 100%;

--$4.8 million class L affirmed at 'CCsf', RE 50%;

--$2.4 million class M affirmed at 'CCsf', RE 0%;

--$2.4 million class N affirmed at 'Csf', RE 0%;

--$1.8 million class P affirmed at 'Dsf', RE 0%.

The class A-1 and A-2 certificates have paid in full. Fitch does not rate the class Q certificates. Fitch previously withdrew the rating on the interest-only class X certificates.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 24, 2013);

--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 11, 2013).

Applicable Criteria and Related Research:

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724961

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=827239

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