NEW YORK--()--Fitch Ratings has assigned the following ratings and Outlooks to the UBS-Barclays Commercial Mortgage Trust 2013-C5 (UBS-BB 2013-C5) commercial mortgage pass-through certificates:
--$82,500,000 Class A-1 'AAAsf'; Outlook Stable;
--$17,000,000 Class A-2 'AAAsf'; Outlook Stable;
--$200,000,000 Class A-3 'AAAsf'; Outlook Stable;
--$629,529,000 Class A-4 'AAAsf'; Outlook Stable;
--$110,500,000 Class A-AB 'AAAsf'; Outlook Stable;
--$120,660,000ab Class A-S 'AAAsf'; Outlook Stable;
--$1,160,189,000*a Class X-A 'AAAsf'; Outlook Stable;
--$96,528,000*a Class X-B 'AA-sf'; Outlook Stable;
--$96,528,000ab Class B 'AA-sf'; Outlook Stable;
--$274,733,000ab Class EC 'A-sf'; Outlook Stable;
--$57,545,000ab Class C 'A-sf'; Outlook Stable;
--$70,540,000a Class D 'BBB-sf'; Outlook Stable;
--$27,844,000a Class E 'BBsf'; Outlook Stable;
--$27,845,000a Class F 'Bsf'; Outlook Stable.
(*)Notional amount and interest-only.
(a)Privately placed pursuant to Rule 144A.
(b)Class A-S, class B, and class C certificates may be exchanged for class EC certificates, and class EC certificates may be exchanged for class A-S, class B, and class C certificates.
Fitch does not rate the $44,551,824 class G.
The certificates represent the beneficial ownership interest in the trust, primary assets of which are 81 loans secured by 122 commercial properties having an aggregate principal balance of approximately $1.485 billion as of the cutoff date. The loans were contributed to the trust by UBS Real Estate Securities, Inc., Barclays Bank PLC, General Electric Capital Corp., KeyBank, N.A., Archetype Mortgage Funding I LLC, RAIT Partnership, LP, and The Bancorp Bank.
Fitch reviewed a comprehensive sample of the transaction's collateral, including site inspections on 77.9% of the properties by balance, cash flow analysis of 85.2%, and asset summary reviews on 85.2% of the pool.
Key Rating Drivers
Fitch Leverage: This transaction has slightly lower leverage relative to previously rated deals, with a Fitch Ratings stressed DSCR of 1.45x and a Fitch stressed LTV of 95.8%. The average 2012 Fitch DSCR and LTV were 1.24x and 97.1%, respectively. The average 2011 Fitch DSCR and LTV were 1.25x and 91.6%, respectively.
Geographic Concentration: The deal is geographically concentrated with California representing 36.7% of the pool; however, the largest two loans, comprising 27.6% of the pool, are secured by malls in California with good sales psf and Fitch LTVs of 82.3% and 87.1%.
Loan Concentration: The top 10 loans account for 58.2%; the LCI and SCI are 577 and 1003, respectively. This represents slightly higher top 10 loan concentration than most 2012 transactions; however, the sponsor concentration is notably higher, with the top two loans having a related sponsor and accounting for 27.6% of the pool.
Additional Debt: One loan (5.1%) has in-place mezzanine debt and one
loan (14.5%) has a pari passu note held outside the trust. There are
eight loans comprising 20.9% of the pool that
allow for additional mezzanine financing subject to DSCR, LTV, and debt yield constraints.
For this transaction, Fitch's net cash flow (NCF) was 9.6% below the full-year 2011 net operating income (NOI) (for properties that 2011 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-C12 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 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 'BBB+sf' could result. The 'Rating Sensitivity' section of Fitch's presale report includes a detailed explanation of additional stresses and sensitivities.
The Master and Special Servicer will be Midland Loan Services, Inc. (Midland), rated 'CMS1' and 'CSS1', respectively, by Fitch.
The presale report is available at www.fitchratings.com.
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:
--'Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions' (Aug. 8, 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 (Feb. 18, 2011).
--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 18 2012)
--Counterparty Criteria for Structured Finance Transactions (May 30, 2012)
Applicable Criteria and Related Research
Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions
Global Structured Finance Rating Criteria
Criteria for Special-Purpose Vehicles in Structured Finance Transactions
U.S. Commercial Mortgage Servicer Rating Criteria
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria