NEW YORK--(BUSINESS WIRE)--Fitch Ratings has issued a presale report on WFRBS Commercial Mortgage Trust 2013-C18 Pass-Through Certificates.
Fitch expects to rate the transaction and assign Rating Outlooks as follows:
--$48,516,000 Class A-1 'AAAsf'; Outlook Stable;
--$103,340,000 Class A-2 'AAAsf'; Outlook Stable;
--$140,000,000 Class A-3 'AAAsf'; Outlook Stable;
--$170,000,000 Class A-4 'AAAsf'; Outlook Stable;
--$201,014,000 Class A-5 'AAAsf'; Outlook Stable;
--$63,699,000 Class A-SB 'AAAsf'; Outlook Stable;
--$70,062,000b Class A-S 'AAAsf'; Outlook Stable;
--$796,631,000* Class X-A 'AAAsf'; Outlook Stable;
--$72,657,000b Class B 'AA-sf'; Outlook Stable;
--$36,329,000b Class C 'A-sf'; Outlook Stable;
--$179,048,000b Class PEX 'A-sf'; Outlook Stable;
--$66,169,000a Class D 'BBB-sf'; Outlook Stable;
--$19,462,000a Class E 'BBsf'; Outlook Stable;
--$7,785,000a Class F 'Bsf'; 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 Dec. 5, 2013. Fitch does not expect to rate the $38,923,637 class G.
The certificates represent the beneficial ownership in the trust, primary assets of which are 67 loans secured by 73 commercial properties having an aggregate principal balance of approximately $1.038 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; Basis Real Estate Capital II LLC; NCB, FSB; UBS Real Estate Securities Inc.; and C-III Commercial Mortgage LLC.
Fitch reviewed a comprehensive sample of the transaction's collateral, including site inspections on 79.4% of the properties by balance, cash flow analysis of 87.9%, and asset summary reviews on 90.9% of the pool.
KEY RATING DRIVERS
Fitch Leverage: This transaction has leverage metrics that are stronger than other recent Fitch-rated fixed-rate deals. The pool's Fitch DSCR and LTV are 1.50x and 88.1%, respectively, compared with the first-half (1H) 2013 averages of 1.36x and 99.8%. Excluding the 15 loans collateralized by cooperative housing (co-op) properties, which comprise 4.2% of the pool, the Fitch DSCR and LTV are 1.34x and 90.8%, respectively.
Concentrated Loan Size: The pool is highly concentrated by loan size and sponsor, greater than the average transactions in 1H 2013. The top 10 loans represent 67.0% of the pool, which is greater than the 1H'13 average concentration of 54.3%. The pool has a loan concentration index (LCI) and sponsor concentration index (SCI) of 711 and 741, respectively, which represents one of the most concentrated transactions in 2013.
Credit Opinion Loans: The largest loan in the pool, Garden State Plaza (14.5%), has a Fitch credit opinion of 'AAAsf*' on a stand-alone basis. The loan is secured by a 2.2 million-sf regional mall in Paramus, NJ. This loan is a pari passu portion of a larger loan with the controlling interest held outside the trust. The third largest loan in the pool (13.5%) has a Fitch credit opinion of 'BBB-sf*' on a stand-alone basis. The loan is secured by The Outlet Collection | Jersey Gardens, a 1.3 million-sf outlet mall located in Elizabeth, NJ. This loan has a pari passu participation held outside the trust, though 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 8.5% 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-C18 certificates and found that the transaction displays better than 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 'AA+sf' 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 'A+sf' could result. The presale report includes a detailed explanation of additional stresses and sensitivities on pages 79-80.
The master servicers will be Wells Fargo Bank, National Association and NCB, FSB, rated 'CMS1-' and 'CMS2-', respectively, by Fitch. The special servicers will be Midland Loan Services, a division of PNC Bank National Association, and NCB, FSB rated 'CSS1' 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 2013)
--Global Structured Finance Rating Criteria (May 2013)
--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-C18 (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
Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions