Fitch Upgrades JPM 2002-CIBC4

Fitch Ratings has upgraded one and affirmed 14 classes of J.P. Morgan Chase Commercial Mortgage Securities Corp., commercial mortgage pass-through certificates, series 2002-CIBC4. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrade is based on increased credit enhancement due to continued amortization, better than expected recovery on the liquidation of a real estate owned (REO) asset and overall stable pool performance since Fitch's last rating action. While the credit enhancement of class C is high relative to expected losses, Fitch capped the rating based on high concentration of the pool, the substantial Fitch Loans of Concern (FLOC; 19.8% of the pool) and exposure to tenant rollover, some of which (40.5% of the pool) involves larger tenants with leases expiring prior to loan maturity. The capped rating is in line with Fitch's credit rating of Kohl's Corporation ('BBB' as of April 15, 2016), the anchor tenant of the property which secures the largest loan (26.5% of the pool).

As of the April 2016 distribution date, the pool's aggregate principal balance has been reduced by 97% to $24.1 million, from $798.9 million at issuance. Interest shortfalls are currently affecting classes D and NR. Of the original 121 loans, only 13 remain in the pool, four of which (14.9%) are defeased.

The largest FLOC (12.1%) is secured by a 59,258 square foot (sf) office property located in San Francisco, CA. The property was fully occupied by two tenants at issuance, one of which (47% of NRA) vacated in June 2014 upon lease expiration; during the first quarter of 2015 (1Q15), two new tenants took over this space with a two year lease term. The other space (53%) was leased to an affiliate of the Prescott Hotel, which is adjacent to the property on a 69 year term which was partially prepaid until August 2017. The property cash flow will increase when this tenant begins paying its monthly rent in September 2017. Property cash flow may fluctuate as the two new replacement tenants signed in 2015 have expiring leases in 2017. The servicer reported 3Q16 debt service coverage ratio (DSCR) was 0.58x, compared to 1.37x at underwriting. The loan is scheduled to mature in 2021.

The second largest FLOC (7.2%) is a 19,545 sf retail property in Edwards, CO. The property became REO in October 2013. The special servicer's workout strategy is to continue leasing up the property before marketing it for sale. As of year-end (YE) 2015, the property was 86.8% occupied, compared to 75.5% a year ago.

The largest loan in the pool (26.5%) is secured by a 173,602 sf retail property located in Plainfield, IN. The largest tenants include Kohl's, TJ Maxx, and Five Below. Kohl's, which leases 48.4% of the property's net leasable area has a lease expiring in February 2020, two years prior to the loan's maturity date of March 2020. The loan is performing. As of the February 2016 rent roll, the property was 99.1% occupied, compared to 94.5% at issuance. The servicer reported YE 2015 DSCR was 1.31x, compared to 1.28x at issuance.

The second largest loan in the pool (17.4%) is secured by a 120 unit multifamily property located in Charlotte, NC. This loan is on the servicer watchlist due to low DSCR. As of 3Q15, the property was 95.8% occupied in line with issuance. The servicer reported annualized 3Q15 DSCR was 1.15x, compared to 1.22x at issuance. The decline in DSCR was primarily due to an increase in operating expenses, more specifically the utility and payroll expenses.

RATING SENSITIVITIES

The Outlook on class C remains Stable as no rating changes are anticipated. Further upgrades are not likely due to the concentrated nature of the pool. Class D would be downgraded to 'D' should losses be realized.

DUE DILIGENCE USAGE

No third-party due diligence was provided or reviewed in relation to this rating action.

Fitch has upgraded the following class as indicated:

--$12.6 million class C to 'BBBsf' from 'BBsf'; Outlook Stable.

Fitch has affirmed the following classes as indicated:

--$10 million class D at 'Csf', RE 80%.

--$1.5 million class E at 'Dsf', RE 0%;

--$0 class F at 'Dsf', RE 0%;

--$0 class G at 'Dsf', RE 0%;

--$0 class H at 'Dsf', RE 0%;

--$0 class J at 'Dsf', RE 0%;

--$0 class K at 'Dsf', RE 0%;

--$0 class L at 'Dsf', RE 0%;

--$0 class M at 'Dsf', RE 0%.

The class A-1, A-2, A-3, B and the interest-only class X-2 certificates have paid in full. Fitch does not rate the class NR certificates. Fitch previously withdrew the rating on the interest-only class X-1 certificates.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

Criteria for Rating Caps and Limitations in Global Structured Finance Transactions (pub. 28 May 2014)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748781

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

U.S. and Canadian Fixed-Rate Multiborrower CMBS Surveillance and U.S. Re-REMIC Criteria (pub. 13 Nov 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=873395

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form
https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1003673

Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1003673

Endorsement Policy
https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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