Fitch Downgrades 5 Classes of Bear Stearns 2005-TOP18; Assigns LS Ratings

The downgrades are the result of loss expectations and reflect Fitch's prospective views regarding commercial real estate market value and cash flow declines. Fitch forecasts potential losses of 1.4% for this transaction, should market conditions not recover. Today's rating actions are based on the full losses of 1.4% as a majority of loans mature in the next five years. The bonds with Negative Outlooks indicate classes that may be downgraded in the future should full potential losses be realized.

To determine potential defaults for each loan Fitch assumed cash flow would decline by 10% from year-end 2008, which is consistent with the analysis used in its review of recent vintage transactions whereby cash flow was assumed to decline 15% from year-end 2007 projected over a three-year period. If the stressed cash flow would cause the loan to fall below 0.95 times (x), Fitch assumed the loan would default during the term. To determine losses, Fitch used the above stressed cash flow, and applied a market cap rate, ranging between 7.5% and 9.5%, for each specific property type. If the loan balance at default is less than the stressed cash flow the loan would realize that loss. These loss estimates were reviewed in more detail for loans representing 53.1% of the pool and, in certain cases, revised based on additional information and/or property characteristics. Loss expectations attributed to loans reviewed in detail represent approximately 60% of the 1.4%.

Approximately 93% of the mortgages mature (or have anticipated repayment dates) within the next five years as follows: 10.1% in late 2009, 2.5% in 2010, 0.3% in 2011, 3.2% in 2012, 0.7% in 2013, 14.5% in 2014, and 61.7% in 2015.

Fitch identified 29 Loans of Concern (21.4%) within the pool, seven of which are specially serviced (9.4%). Of the specially serviced loans, two are performing (7.3% of the pool). Three of the Fitch Loans of Concern (10.7%) are within the transaction's top 15 loans (50.4% of the pool), and one (6.8%) is specially serviced. Four loans (1.0%) are currently defeased.

None of the top 15 loans are assumed to default during the loan term or at maturity with losses expected. One loan in special servicing is a performing matured loan and remains current (6.8% of the pool) with no losses expected. All of the top 15 loans are expected to default at maturity; however, Fitch did not calculate losses based on stressed value being higher than the current loan amount.

Of the loans in special servicing, the largest contributors of expected term losses are Whiting Shopping Center (1.0% of the pool), El Camino Square (0.5%), and Ambassador West Apartments (0.3%).

Whiting Shopping Center, the largest non-performing specially serviced asset, is a 115,177 square foot (sf) anchored retail center located in Whiting, NJ. The asset transferred to special servicing in July 2009 as the borrower was unable to meet debt service obligations due to delinquent rents from tenants. The anchor tenant, a grocery store, is affiliated with the borrower and has been unable to pay rent due to operating losses.

El Camino Square is a 27,582 sf unanchored retail center located in Encinitas, CA. The asset transferred to special servicing in September 2009 when the borrower filed for Chapter 11 bankruptcy protection. A subordinate lien holder posted the property for foreclosure, and the borrower filed bankruptcy to stay the foreclosure auction. The loan remains current and property performance has not declined.

Ambassador West Apartments is a 104-unit garden style apartment complex located in Urbandale, IA. The loan transferred to special servicing in July 2009 due to payment default. The property has experienced a performance decline and is 67% occupied as of September 2009.

Fitch downgrades, assigns loss severity (LS) ratings and revises Rating Outlooks as indicated:

--$9.8 million class F to 'BBB/LS4' from 'BBB+'; Outlook to Stable from Negative;

--$8.4 million class H to 'BB/LS4' from 'BB+'; Outlook to Stable from Negative;

--$4.2 million class K to 'B/LS5' from 'BB-'; Outlook to Stable from Negative;

--$4.2 million class L to 'B-/LS5' from 'B+'; Outlook Negative;

--$1.4 million class M to 'B-/LS5' from 'B'; Outlook Negative.

Fitch revises the following Recovery Rating (RR) as indicated:

--$2.8 million class O to 'CCC/RR6' from 'CCC/RR1'.

Fitch also affirms the following classes, assigns LS ratings and revises Rating Outlooks as indicated:

--$7.5 million class A-1 at 'AAA/LS1'; Outlook Stable;

--$121.9 million class A-2 at 'AAA/LS1'; Outlook Stable;

--$41.6 million class A-3 at 'AAA/LS1'; Outlook Stable;

--$105.7 million class A-AB at 'AAA/LS1'; Outlook Stable;

--$517.2 million class A-4 at 'AAA/LS1'; Outlook Stable;

--$7. million class A-4FL at 'AAA/LS1'; Outlook Stable;

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

--$74.3 million class A-J at 'AAA/LS2'; Outlook Stable;

--$29.4 million class B at 'AA/LS3'; Outlook Stable;

--$8.4 million class C at 'AA-/LS4'; Outlook Stable;

--$12.6 million class D at 'A/LS4'; Outlook Stable;

--$11.2 million class E at 'A-/LS4'; Outlook Stable;

--$9.8 million class G at 'BBB-/LS4'; Outlook to Stable from Negative;

--$4.2 million class J at 'BB/LS5'; Outlook to Stable from Negative;

--$1.4 million class N at 'B-/LS5'; Outlook Negative.

Fitch does not rate the $6.1 million class P.

Additional information on Fitch's amended criteria for analyzing recent vintage U.S. CMBS is available in the July 8, 2009 report, 'Surveillance Methodology for Recent Vintage U.S. CMBS' is available at 'www.fitchratings.com' under the following headers:

Structured Finance then CMBS then Criteria Reports

Fitch will release a report titled 'Bear Stearns 2005-TOP18' that will contain a graph of revised loss expectations for the transaction at 'www.fitchratings.com' under the following headers:

Structured Finance then CMBS then Special Reports

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

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.

Fitch Ratings, Chicago
Gregg Katz, 312-606-2343
Britt Johnson, 312-312-2341
or
Media Relations:
Sandro Scenga, 212-908-0278, New York
Email: sandro.scenga@fitchratings.com