NEW YORK--(BUSINESS WIRE)--Link to Fitch Ratings' Report: COMM 2014-CCRE17 Mortgage Trust (US CMBS)
Fitch Ratings has issued a presale report on Deutsche Bank Securities, Inc.'s COMM 2014-CCRE17 Commercial Mortgage Trust Pass-Through Certificates.
Fitch expects to rate the transaction and assign Rating Outlooks as follows:
--$49,750,000 class A-1 'AAAsf'; Outlook Stable;
--$149,000,000 class A-2 'AAAsf'; Outlook Stable;
--$12,376,000 class A-3 'AAAsf'; Outlook Stable;
--$69,850,000 class A-SB 'AAAsf'; Outlook Stable;
--$220,000,000 class A-4 'AAAsf'; Outlook Stable;
--$333,736,000 class A-5 'AAAsf'; Outlook Stable;
--$900,296,000a class X-A 'AAAsf'; Outlook Stable;
--$65,584,000b class A-M 'AAAsf'; Outlook Stable;
--$81,980,000b class B 'AA-sf'; Outlook Stable;
--$199,734,000b class PEZ 'A-sf'; Outlook Stable;
--$52,170,000b class C 'A-sf'; Outlook Stable;
--$184,829,000a,c class X-B 'BBB-sf'; Outlook Stable;
--$44,717,000a,c class X-C 'BB-sf'; Outlook Stable;
--$50,679,000c class D 'BBB-sf'; Outlook Stable;
--$14,906,000c class E 'BBB-sf'; Outlook Stable;
--$29,811,000c class F 'BB-sf'; Outlook Stable.
(a) Notional amount and interest only.
(b) Class A-M, B and C certificates may be exchanged for class PEZ certificates, and class PEZ certificates may be exchanged for class A-M, B, and C certificates.
(c) Privately placed and pursuant to Rule 144A.
The expected ratings are based on information provided by the issuer as of Apr. 22, 2014. Fitch does not expect to rate the $62,604,107 interest-only class X-D, the $20,868,000 class G or the $41,736,107 class H certificates.
The certificates represent the beneficial ownership interest in the trust, primary assets of which are 59 loans secured by 86 commercial properties having an aggregate principal balance of approximately $1.192 billion, as of the cutoff date. The loans were contributed to the trust by Cantor Commercial Real Estate Lending, L.P., German American Capital Corporation, Jefferies LoanCore LLC, and General Electric Capital Corporation.
Fitch reviewed a comprehensive sample of the transaction's collateral, including site inspections on 80.1% of the properties by balance, cash flow analysis of 83.2%, and asset summary reviews on 85.8% of the pool.
KEY RATING DRIVERS
High Fitch Leverage: The pool's Fitch DSCR and LTV of 1.19x and 108.3%, respectively, are worse than the 2013 averages of 1.29x and 101.6%, respectively. While the pool's Fitch DSCR of 1.19x is higher than the year-to-date 2014 average of 1.16x, the pool's Fitch LTV of 108.3% exceeds the year-to-date 2014 average of 101.6%.
Exposure to NY Tristate Market: Three of the 10 largest loans (25.7% of the pool) are located in the New York tri-state area, one of the higher performing regions in Fitch's analysis. There is one each in Manhattan, The Bronx, and Yonkers.
Limited Amortization: The pool is scheduled to amortize by 10.99% of the initial pool balance prior to maturity. The pool's concentration of partial interest loans (37.1%), which includes four of the 10 largest loans, is higher than the 2013 average (34.0%). The pool's concentration of full-term interest-only loans (27.7%), including three of the 10 largest loans, also exceeds the 2013 average (17.1%).
For this transaction, Fitch's net cash flow (NCF) was 5.8% below the full-year 2013 NOI (for properties that 2013 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 severities on defaulted loans, and could result in potential rating actions on the certificates. Fitch evaluated the sensitivity of the ratings assigned to COMM 2014-CCRE17 certificates and found that the transaction displays slightly above average sensitivity to further declines in NCF. A downgrade of the junior 'AAAsf' certificates to 'A-sf' could result if NCF declined a further 20% from Fitch's NCF. In a more severe scenario, a downgrade of the junior 'AAAsf' certificates to 'BBBsf' could result if NCF declined a further 20% from Fitch's NCF. The presale report includes a detailed explanation of additional stresses and sensitivities on pages 75 - 76.
The master servicer will be Midland Loan Services, Inc., rated 'CMS1' by Fitch. The special servicer will be Midland Loan Services Inc., rated 'CSS1'.
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);
--Global Structured Finance Rating Criteria (May 24, 2013);
--Rating Criteria for U.S. Commercial Mortgage Servicers (Feb. 14, 2014);
--U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria (Dec. 18, 2013);
--Counterparty Criteria for Structured Finance and Covered Bonds (May 13, 2013).
Applicable Criteria and Related Research:
Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions
Global Structured Finance Rating Criteria
Rating Criteria for U.S. Commercial Mortgage Servicers
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria
Counterparty Criteria for Structured Finance and Covered Bonds