NEW YORK--(BUSINESS WIRE)--
Fitch Ratings has issued a presale report on WFRBS Commercial Mortgage Trust 2013-C17 Pass-Through Certificates.
Fitch expects to rate the transaction and assign Rating Outlooks as follows:
--$48,455,000 class A-1 'AAAsf'; Outlook Stable;
--$166,900,000 class A-2 'AAAsf'; Outlook Stable;
--$125,000,000 class A-3 'AAAsf'; Outlook Stable;
--$236,856,000 class A-4 'AAAsf'; Outlook Stable;
--$55,837,000 class A-SB 'AAAsf'; Outlook Stable;
--$73,478,000 class A-S 'AAAsf'; Outlook Stable;
--$58,784,000 class B 'AA-sf'; Outlook Stable;
--$31,652,000 class C 'A-sf'; Outlook Stable;
--$706,526,000a class X-A 'AAAsf'; Outlook Stable;
--$47,479,000b class D 'BBB-sf'; Outlook Stable;
--$15,826,000b class E 'BBsf'; Outlook Stable;
--$9,043,000b class F 'Bsf'; Outlook Stable;
--$58,754,000ab class X-B 'AA-'; Outlook Stable;
a Notional amount and interest-only.
b Privately placed pursuant to Rule 144A.
The expected ratings are based on information provided by the issuer as of Oct. 23, 2013. Fitch does not expect to rate the $35,044,517 class G or the $59,913,517 interest-only class X-C.
Fitch does not rate the $35,044,517 class G.
The certificates represent the beneficial ownership in the trust, primary assets of which are 84 loans secured by 134 commercial properties having an aggregate principal balance of approximately $904,354,517 as of the cutoff date. The loans were contributed to the trust by The Royal Bank of Scotland; Wells Fargo Bank; Rialto Capital Advisors; Liberty Island Group I LLC; C-III Commercial Mortgage LLC; and Basis Real Estate Capital II, LLC.
Fitch reviewed a comprehensive sample of the transaction's collateral, including site inspections on 70% of the properties by balance and cash flow analysis of 77%, and asset summary reviews on 77% of the pool.
KEY RATING DRIVERS
Fitch Leverage: This transaction has leverage metrics in line with other recent Fitch-rated fixed-rate deals. The pool's Fitch debt service coverage ratio (DSCR) and loan to value (LTV) are 1.23x and 98.2%, respectively, compared with the first-half of 2013 (1H'13) averages of 1.36x and 99.8%.
Hotel and Nontraditional Property Type Concentration: The pool has a 22.4% concentration of hotels, which is higher than the 1H'13 average lodging concentration of 13.8%. Four of the 15 largest loans in the pool are secured by hospitality properties. In addition, 11.5% of the pool is secured by manufactured housing communities, and 10.5% is secured by self-storage properties.
Less Amortization: The pool has five interest-only loans (19.4%), including the two largest loans, and 14 partial interest loans (25.4%). The pool is scheduled to amortize 13% prior to maturity.
Credit Opinion Loans: The largest loan in the pool, Hilton Sandestin Beach & Spa Resort (8.3%), has a Fitch credit opinion of 'BBB-sf' on a stand-alone basis. The loan is secured by a 598-room full-service hotel in Destin, FL. The third largest loan in the pool (6.1%) has a Fitch credit opinion of 'BBBsf' on a stand-alone basis. The loan is secured by Westfield Mission Valley, a 1.6 million-sf (997,549 sf of loan collateral) regional mall and retail strip center located in San Diego, CA. The Westfield Mission Valley loan has a pari passu participation held outside the trust. The servicing of the loan will be governed by the pooling and servicing agreement (PSA) of this transaction.
For this transaction, Fitch's net cash flow (NCF) was 12.13% below the full-year 2012 net operating income (NOI) (for properties for which 2012 NOI was provided, excluding properties that were stabilizing during this period). Unanticipated further declines in property-level NCF could result in higher defaults and loss severity on defaulted loans, and could result in potential rating actions on the certificates. Fitch evaluated the sensitivity of the ratings assigned to WFRBS 2013-C17 certificates and found that the transaction displays average sensitivity to further declines in NCF. In a scenario in which NCF declined a further 20% from Fitch's NCF, a downgrade of the 'AAAsf' certificates to 'Asf' could result. In a more severe scenario, in which NCF declined a further 30% from Fitch's NCF, a downgrade of the junior 'AAAsf' certificates to 'BBBsf' could result. The presale report includes a detailed explanation of additional stresses and sensitivities in the Rating Sensitivity section.
The Master Servicer will be Wells Fargo Bank, N.A, rated 'CMS2' by Fitch. The special servicers will be Rialto Capital Management LLC rated CSS2-by Fitch.
The presale report is available at 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions' (Aug. 7, 2013);
--'Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions' (Sept. 20, 2013);
--'Global Structured Finance Rating Criteria' (June 6, 2012);
--'Criteria for Special-Purpose Vehicles in Structured Finance Transactions (May 30, 2012);
--'U.S. Commercial Mortgage Servicer Rating Criteria' (Feb. 18, 2011);
--U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 18, 2012);
--Counterparty Criteria for Structured Finance and Covered Bonds (May 13, 2013).
Applicable Criteria and Related Research: WFRBS Commercial Mortgage Trust 2013-C17
Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions
Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions
Global Structured Finance Rating Criteria
U.S. Commercial Mortgage Servicer Rating Criteria
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria
Counterparty Criteria for Structured Finance and Covered Bonds
- Security Upgrades & Downgrades
- Fitch Ratings
- Commercial Mortgage