NEW YORK--(BUSINESS WIRE)--
Fitch Ratings has issued a presale report on WFRBS Commercial Mortgage Trust 2013-C16 Pass-Through Certificates.
Fitch expects to rate the transaction and assign Rating Outlooks as follows:
--$52,514,000 Class A-1 'AAAsf'; Outlook Stable;
--$160,623,000 Class A-2 'AAAsf'; Outlook Stable;
--$43,958,000 Class A-3 'AAAsf'; Outlook Stable;
--$175,000,000 Class A-4 'AAAsf'; Outlook Stable;
--$229,621,000 Class A-5 'AAAsf'; Outlook Stable;
--$70,395,000 Class A-SB 'AAAsf'; Outlook Stable;
--$100,665,000 Class A-S 'AAAsf'; Outlook Stable;
--$832,776,000* Class X-A 'AAAsf'; Outlook Stable;
--$56,216,000* Class X-B 'AA-sf'; Outlook Stable;
--$56,216,000 Class B 'AA-sf'; Outlook Stable;
--$41,835,000 Class C 'A-sf'; Outlook Stable;
--$198,716,000b Class PEX 'A-sf'; Outlook Stable;
--$47,064,000a Class D 'BBB-sf'; Outlook Stable;
--$24,839,000a Class E 'BB-sf'; Outlook Stable;
--$10,459,000a Class F 'B-sf'; Outlook Stable.
* Notional amount and interest-only.
a Privately placed pursuant to Rule 144A.
b Class A-S, B and C certificates may be exchanged for class PEX certificates; and class PEX certificates may be exchanged for class A-S, B and C certificates.
The expected ratings are based on information provided by the issuer as of Sept. 3, 2013. Fitch does not expect to rate the $32,684,083 Class G or the $67,982,083 interest-only Class X-C.
The certificates represent the beneficial ownership in the trust, primary assets of which are 86 loans secured by 144 commercial properties having an aggregate principal balance of approximately $1.046 billion as of the cutoff date. The loans were contributed to the trust by Wells Fargo Bank, National Association; The Royal Bank of Scotland; Liberty Island Group I LLC; C-III Commercial Mortgage LLC; and Basis Real Estate Capital II LLC; and NCB, FSB.
Fitch reviewed a comprehensive sample of the transaction's collateral, including site inspections on 66.8% of the properties by balance, cash flow analysis of 83.5%, and asset summary reviews on 83.5% of the pool.
KEY RATING DRIVERS
Fitch Leverage: This transaction has slightly lower leverage than other recent Fitch-rated fixed-rate deals. The pool's Fitch debt service coverage ratio (DSCR) and loan to value (LTV) are 1.34x and 97.4%, respectively, compared to the first-half 2013 (1H'13) averages of 1.36x and 99.8%. Excluding the loans collateralized by cooperative housing (co-op) properties, which consist of 2.8% of the pool, the Fitch DSCR and LTV are 1.25x and 99.4%.
Hotel Concentration: The pool has an 18.6% 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.
Less Amortization: The pool has six interest-only loans (28.7%), including the three largest loans, and nine partial interest loans (15.6%). The pool is scheduled to amortize 11.8% prior to maturity.
Credit Opinion Loan: The largest loan in the pool has a Fitch credit opinion of 'BBB sf' on a stand-alone basis. The loan is secured by Westfield Mission Valley (9.6%), a 1.6 million square foot (sf) regional mall and 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 of this transaction.
For this transaction, Fitch's net cash flow (NCF) was 15.2% below the most recent net operating income (NOI) (for properties for which historical NOI was provided, excluding properties that were stabilizing during the most recent reporting 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-C16 certificates and found that the transaction displays slightly above-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 junior '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 on pages 78-79.
The Master Servicers will be Wells Fargo Bank, National Association and NCB, FSB, rated 'CMS2' and 'CMS2-', respectively, by Fitch. The special servicers will be Rialto Capital Advisors LLC and NCB, FSB rated 'CSS2-' and 'CSS3+', respectively, 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 (August 2013)
--Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions (September 2012)
--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 (February 18, 2011)
--U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria (December 18, 2012)
--Counterparty Criteria for Structured Finance and Covered Bonds (May 30, 2013)
Applicable Criteria and Related Research: WFRBS Commercial Mortgage Trust 2013-C16 (US CMBS)
Counterparty Criteria for Structured Finance and Covered Bonds
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria
U.S. Commercial Mortgage Servicer Rating Criteria
Criteria for Special-Purpose Vehicles in Structured Finance Transactions - Effective 13 June 2011 to 30 May 2012
Global Structured Finance Rating Criteria
Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions
- Security Upgrades & Downgrades
- Fitch Ratings
Melissa Lasker, +1 212-908-0695
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
Eric Kraushaar, +1 212-908-0875
Robert Vrchota, +1 312-368-3336
Sandro Scenga, +1 212-908-0278