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WFRBS Commercial Mortgage Trust 2013-C13 -- Moody's affirms eleven classes of WFRBS 2013-C13

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Rating Action: Moody's affirms eleven classes of WFRBS 2013-C13Global Credit Research - 29 Aug 2022Approximately $605 million of structured securities affectedNew York, August 29, 2022 -- Moody's Investors Service, ("Moody's") has affirmed the ratings on eleven classes in WFRBS Commercial Mortgage Trust 2013-C13, Commercial Mortgage Pass-Through Certificates, Series 2013-C13 as follows: Cl. A-3, Affirmed Aaa (sf); previously on Jul 6, 2020 Affirmed Aaa (sf) Cl. A-4, Affirmed Aaa (sf); previously on Jul 6, 2020 Affirmed Aaa (sf) Cl. A-S, Affirmed Aaa (sf); previously on Jul 6, 2020 Affirmed Aaa (sf) Cl. A-SB, Affirmed Aaa (sf); previously on Jul 6, 2020 Affirmed Aaa (sf)Cl. B, Affirmed Aa3 (sf); previously on Jul 6, 2020 Affirmed Aa3 (sf)Cl. C, Affirmed A3 (sf); previously on Jul 6, 2020 Affirmed A3 (sf)Cl. D, Affirmed Baa3 (sf); previously on Jul 6, 2020 Affirmed Baa3 (sf)Cl. E, Affirmed Ba2 (sf); previously on Jul 6, 2020 Confirmed at Ba2 (sf)Cl. F, Affirmed B2 (sf); previously on Jul 6, 2020 Confirmed at B2 (sf)Cl. X-A*, Affirmed Aaa (sf); previously on Jul 6, 2020 Affirmed Aaa (sf)Cl. X-B*, Affirmed A2 (sf); previously on Jul 6, 2020 Affirmed A2 (sf)* Reflects interest-only classesRATINGS RATIONALEThe ratings on the P&I classes were affirmed because of their credit support and the transaction's key metrics, including Moody's loan-to-value (LTV) ratio, Moody's stressed debt service coverage ratio (DSCR) and the transaction's Herfindahl Index (Herf), are within acceptable ranges.The ratings on the IO classes were affirmed based on the credit quality of the referenced classes.Moody's rating action reflects a base expected loss of 1.6% of the current pooled balance, compared to 2.2% at Moody's last review. Moody's base expected loss plus realized losses is now 1.2% of the original pooled balance, compared to 1.7% at the last review. Moody's provides a current list of base expected losses for conduit and fusion CMBS transactions on moodys.com at http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF215255.FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS:The performance expectations for a given variable indicate Moody's forward-looking view of the likely range of performance over the medium term. Performance that falls outside the given range can indicate that the collateral's credit quality is stronger or weaker than Moody's had previously expected. Additionally, significant changes in the 5-year rolling average of 10-year US Treasury rates will impact the magnitude of the interest rate adjustment and may lead to future rating actions.Factors that could lead to an upgrade of the ratings include a significant amount of loan paydowns or amortization, an increase in the pool's share of defeasance or an improvement in pool performance.Factors that could lead to a downgrade of the ratings include a decline in the performance of the pool, loan concentration, an increase in realized and expected losses from specially serviced and troubled loans or interest shortfalls.METHODOLOGY UNDERLYING THE RATING ACTION The methodologies used in rating all classes except the interest-only classes were "US and Canadian Conduit/Fusion Commercial Mortgage-Backed Securitizations Methodology" published in July 2022 and available at https://ratings.moodys.com/api/rmc-documents/391056 and "Large Loan and Single Asset/Single Borrower Commercial Mortgage-Backed Securitizations Methodology" published in July 2022 and available at https://ratings.moodys.com/api/rmc-documents/391055. The methodologies used in rating interest-only classes were "US and Canadian Conduit/Fusion Commercial Mortgage-Backed Securitizations Methodology" published in July 2022 and available at https://ratings.moodys.com/api/rmc-documents/391056, "Large Loan and Single Asset/Single Borrower Commercial Mortgage-Backed Securitizations Methodology" published in July 2022 and available at https://ratings.moodys.com/api/rmc-documents/391055 and "Moody's Approach to Rating Structured Finance Interest-Only (IO) Securities" published in February 2019 and available at https://ratings.moodys.com/api/rmc-documents/59126. Please see the list of ratings at the top of this announcement to identify which classes are interest-only (indicated by the *). Alternatively, please see the Rating Methodologies page on https://ratings.moodys.com for a copy of these methodologies. DEAL PERFORMANCEAs of the August 15, 2022 distribution date, the transaction's aggregate certificate balance has decreased by 28% to $631.6 million from $877 million at securitization. The certificates are collateralized by 75 mortgage loans ranging in size from less than 1% to 12.4% of the pool, with the top ten loans (excluding defeasance) constituting 40.7% of the pool. Ten loans, constituting 4.2% of the pool, have investment-grade structured credit assessments. Thirty loans, constituting 36% of the pool, have defeased and are secured by US government securities.Moody's uses a variation of Herf to measure the diversity of loan sizes, where a higher number represents greater diversity. Loan concentration has an important bearing on potential rating volatility, including the risk of multiple notch downgrades under adverse circumstances. The credit neutral Herf score is 40. The pool has a Herf of 14, compared to 21 at Moody's last review.Ten loans, constituting 20% of the pool, are on the master servicer's watchlist. The watchlist includes loans that meet certain portfolio review guidelines established as part of the CRE Finance Council (CREFC) monthly reporting package. As part of Moody's ongoing monitoring of a transaction, the agency reviews the watchlist to assess which loans have material issues that could affect performance.There have been no loans liquidated from the pool. Two loans, constituting 1.7% of the pool, are currently in special servicing. Both loans are secured by hotels which were heavily impacted by the coronavirus pandemic. Moody's estimates an aggregate $4.1 million loss for the specially serviced loans (38% expected loss on average).The credit risk of loans is determined primarily by two factors: 1) Moody's assessment of the probability of default, which is largely driven by each loan's DSCR, and 2) Moody's assessment of the severity of loss upon a default, which is largely driven by each loan's loan-to-value ratio, referred to as the Moody's LTV or MLTV. As described in the CMBS methodology used to rate this transaction, we make various adjustments to the MLTV. We adjust the MLTV for each loan using a value that reflects capitalization (cap) rates that are between our sustainable cap rates and market cap rates. We also use an adjusted loan balance that reflects each loan's amortization profile. The MLTV reported in this publication reflects the MLTV before the adjustments described in the methodology.Moody's received full year 2021 operating results for 93% of the pool, and partial year 2022 operating results for 64% of the pool (excluding specially serviced and defeased loans). Moody's weighted average conduit LTV is 93%, compared to 87% at Moody's last review. Moody's conduit component excludes loans with structured credit assessments, defeased and CTL loans, and specially serviced and troubled loans. Moody's net cash flow (NCF) reflects a weighted average haircut of 6% to the most recently available net operating income (NOI). Moody's value reflects a weighted average capitalization rate of 9.4%.Moody's actual and stressed conduit DSCRs are 1.86X and 1.19X, respectively, compared to 1.96X and 1.26X at the last review. Moody's actual DSCR is based on Moody's NCF and the loan's actual debt service. Moody's stressed DSCR is based on Moody's NCF and a 9.25% stress rate the agency applied to the loan balance.There are ten loans with structured credit assessments ($26.2 million – 4.2% of the pool) that are secured by multifamily cooperative properties located in New York.The top three conduit loans represent 23.7% of the pool balance. The largest loan is the 301 South College Street Loan ($78.4 million -- 12.4% of the pool), which represents a pari passu portion of a $161.3 million mortgage loan. The loan is secured by a 988,646 square foot (SF) Class A office tower located in the central business district of Charlotte, North Carolina. The property was 99% leased as of March 2020, however, the largest tenant, Wells Fargo, recently downsized their space significantly. The tenant previously leased 69% of the net rentable area (NRA) and the new lease was for only 20% of the NRA, which caused occupancy to drop to 56% as of June 2022. A reserve is in place that is trapping excess cash for all terminated space or space being vacated upon expiration and the current balance is $14.6 million. According to the July 2021 servicer inspection, a $6 million lobby renovation is currently underway. After an initial 5-year interest only period the loan has now amortized 7.8% since securitization. The loan matures in May 2023 and due to the recent decline in occupancy may have difficulty refinancing at its maturity date. Moody's LTV and stressed DSCR are 130% and 0.76X, respectively, compared to 108% and 1.02X at the last review.The second largest loan is the General Services Administration (GSA) Portfolio Loan ($50 million -- 7.9% of the pool). The loan is secured by 14 cross-collateralized and cross-defaulted office and flex warehouse buildings totaling approximately 341,000 SF and located throughout 11 states. The loan sponsor is GSA Realty Holdings, Inc. The properties are collectively 100% leased to GSA tenants under 14 long-term leases, with only 28% of the NRA expiring prior to June 2023. The loan is interest only for its entire term and Moody's LTV and stressed DSCR are 89% and 1.13X, respectively, the same as at last review.The third largest loan is the 825-845 Lincoln Road Loan ($30 million -- 4.7% of the pool). The loan is secured by a 38,843 SF retail property located in Lincoln Road Mall, an eight-block retail corridor within walking distance from the Atlantic Ocean and some of South Beach's high end hotels, including the Ritz-Carlton, The Delano, and The Shore Club. As of June 2022, the property was 100% leased to six tenants, including CB2 (15,200 SF, 39% of the NRA), Urban Outfitters (13,126 SF, 34% of the NRA), and American Eagle (4,500 SF, 12% of the NRA). The Urban Outfitters space serves as a flagship store for the retailer and the earliest expiration date amongst the three largest tenants is in August 2023. Property performance is improved from securitization due to higher rental revenues. The loan is interest only for its entire term and Moody's LTV and stressed DSCR are 71% and 1.26X, the same as at last review.REGULATORY DISCLOSURESFor further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found on https://ratings.moodys.com/rating-definitions.The analysis includes an assessment of collateral characteristics and performance to determine the expected collateral loss or a range of expected collateral losses or cash flows to the rated instruments. As a second step, Moody's estimates expected collateral losses or cash flows using a quantitative tool that takes into account credit enhancement, loss allocation and other structural features, to derive the expected loss for each rated instrument.Moody's did not use any stress scenario simulations in its analysis.For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the issuer/deal page for the respective issuer on https://ratings.moodys.com.For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.These ratings are solicited. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website https://ratings.moodys.com.Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://ratings.moodys.com/documents/PBC_1288235.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the EU and is endorsed by Moody's Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that issued the credit rating is available on https://ratings.moodys.com.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the UK and is endorsed by Moody's Investors Service Limited, One Canada Square, Canary Wharf, London E14 5FA under the law applicable to credit rating agencies in the UK. Further information on the UK endorsement status and on the Moody's office that issued the credit rating is available on https://ratings.moodys.com.Please see https://ratings.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.Please see the issuer/deal page on https://ratings.moodys.com for additional regulatory disclosures for each credit rating. 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