NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed the super senior and mezzanine classes of Bear Stearns Commercial Mortgage Securities Trust, 2006-PWR13, commercial mortgage pass-through certificates, and downgraded seven junior classes. A detailed list of rating actions follows at the end of this release.

The downgrade of the junior classes is due to greater certainty of losses associated with specially serviced loans and increased losses from performing loans with performance declines. The Negative Rating Outlooks reflect the likelihood of a future downgrade should values deteriorate further on the specially serviced loans or highly leveraged loans. Thirteen of the top 15 loans have Fitch stressed loan to values greater than 90%. Fitch modeled losses of 8.5% for the remaining pool; expected losses of the original pool are at 8.9%, including losses already incurred to date.

As of the December 2011 distribution date, the pool's aggregate principal balance has been reduced by approximately 8.8% to $2.65 billion from $2.91 billion at issuance. In total, there are 20 loans (10.8% of the pool) in special servicing including five loans (1.5%) that are real estate owned (REO) and two of the top 15 loans (5.1%). Realized losses to date have been $35.6 million (1.2%). The non-rated Class P has nearly been depleted due to realized losses associated with loan dispositions and restructured loans.

The largest contributor to expected loss secured by an industrial warehouse facility located in Phillipsburg, NJ (0.8% of the pool balance). The loan transferred to special servicing in July 2010 due to monetary default. The most recent reported occupancy was 68% based on a November 2011 rent roll, with significant lease rollover in 2012. A receiver has been appointed to manage the property.

The second largest contributor to expected loss is Paces West (3.1% of the pool), which is also the largest specially serviced asset in the pool. This loan is secured by a 646,471 sf office complex located in Atlanta, GA. The loan transferred to special servicing in February 2010 for imminent default. The most recent servicer reported occupancy as of September 2011 was 79.8%. The special servicer continues to negotiate a workout with the borrower. Given the low occupancy and local market conditions, Fitch expects a loss if the asset is liquidated.

The largest contributor to expected loss of the loans not in special servicing is the First Industrial Portfolio (1.8% of the pool), a portfolio of 21 properties located in two different business parks in Georgia. As of the September 2011 rent roll, occupancy was 67% compared with 76% at issuance resulting in declining cash flow.

Fitch has downgraded and assigned Recovery Estimates (REs) on the following classes as indicated:

--$29.1 million class C to 'Bsf' from 'BBsf'; Outlook Negative;

--$40 million class D to 'CCCsf' from 'B-sf'; RE 20%;

--$29.1 million class E to 'CCCsf' from 'B-sf'; RE 0%;

--$32.7 million class G to 'CCsf' from 'CCCsf'; RE 0%;

--$29.1 million class H to 'CCsf' from 'CCCsf'; RE 0%;

--$18.2 million class J to 'Csf' from 'CCsf'; RE 0%;

--$3.6 million class K to 'Csf' from 'CCsf'; RE 0%.

Fitch has affirmed the following classes and revised Rating Outlooks as indicated:

--$30.4 million class A-2 at 'AAAsf'; Outlook Stable;

--$138 million class A-3 at 'AAAsf'; Outlook Stable;

--$128.1 million class A-AB at 'AAAsf'; Outlook Stable;

--$1.2 billion class A-4 at 'AAAsf'; Outlook Stable;

--$332.1 million class A-1A at 'AAAsf'; Outlook Stable;

--$290.7 million class A-M at 'AAAsf'; Outlook Stable;

--$232.5 million class A-J at 'BBBsf'; Outlook to Negative from Stable;

--$65.4 million class B at 'BBsf'; Outlook to Negative from Stable;

--$32.7 million class F at 'CCCsf'; RE 0%;

--$10.9 million class L at 'Csf'; RE 0%;

--$7.3 million class M at 'Csf'; RE 0%;

--$7.3 million class N at 'Csf'; RE 0%;

--$7.3 million class O at 'Csf'; RE 0%.

Class A-1 has paid in full. Fitch does not rate class P.

Fitch previously withdrew the rating on the interest-only classes X-1 and X-2. (For additional information on the withdrawal of the rating on the interest-only classes, see 'Fitch Revises Practice for Rating IO & Pre-Payment Related Structured Finance Securities', dated June 23, 2010.)

Additional information on Fitch's amended criteria for analyzing recent vintage U.S. CMBS is available in the Dec, 21, 2011 report, 'Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions', which is available at 'www.fitchratings.com' under the following headers:

Structured Finance then CMBS then Criteria Reports

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (Aug. 4, 2011);

--'Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions' (Dec. 21, 2011).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=646569

Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=662869

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