CHICAGO--(BUSINESS WIRE)--Fitch Ratings has assigned the following ratings and Rating Outlooks to COMM 2014-SAVA Mortgage Trust's commercial mortgage pass-through certificates:
--$260,000,000 class A 'AAAsf'; Outlook Stable;
--$438,829,788* class X-CP 'NR';
--$550,000,000* class X-EXT 'NR';
--$98,544,000 class B 'NR';
--$114,455,000 class C 'NR'
--$77,001,000 class D 'NR'.
*Interest-only and notional amount.
The certificates in this transaction represent the beneficial interests in a trust that holds a two-year floating-rate mortgage loan secured by 167 skilled nursing facilities located in 29 states across the U.S. The loan is sponsored by Rubin Schron.
KEY RATING DRIVERS
Leverage Metrics: The $550 million loan has a Fitch debt service coverage ratio (DSCR) of 1.67x and a debt per bed of $27,168.
Additional Debt: In addition to the trust debt, there is a $150 million B-note as well as $240 million in mezzanine debt. At the operator level there is a $125 million working capital facility secured by accounts receivable. There are also approximately $216 million in inter-company and other notes which are fully subordinate to the mortgages.
Operational Aspects of Skilled Nursing: The portfolio is comprised of 100% skilled nursing properties which have higher operational risk factors than other property types. The stress applied in Fitch's net cash flow (NCF) and the application of conservative DSCR and loan to value (LTV) attachment points address the operational risk associated with the portfolio.
Diverse Portfolio: The portfolio exhibits geographic diversity across primary and secondary markets in 29 states. The largest state exposure is North Carolina with 27 facilities representing 21.1% by allocated loan balance. No single facility contributes more than 2% of NCF.
Property Age and Condition: The properties are older and were constructed between 1928 and 2001 with the average property being built in 1973. Fitch considers the properties to be in fair condition overall. Approximately 77.2% of the properties by allocated loan balance received a Fitch property quality score of B- or below. Fitch observed a wide disparity in property quality, maintenance and staff engagement across the portfolio.
RATING SENSITIVITIES
Fitch found that the pool could withstand an 81.3% decline in appraised value and an approximately 86.3% decrease in the Fitch NCF prior to experiencing $1 of loss to any 'AAAsf' rated class.
Fitch evaluated the sensitivity of the ratings of class A (rated 'AAAsf' by Fitch) and found that a 7.9% decline in Fitch NCF would result in a one category downgrade. Additionally, a 42.7% decline would result in a downgrade to below investment grade. The 'Rating Sensitivities' section in Fitch's new issue report includes a detailed explanation of additional stresses and sensitivities.
Key rating drivers and rating sensitivities are further detailed in the accompanying new issue report, available at 'www.fitchratings.com' or by clicking on the link at the end of the press release.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (May 2014);
--'Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions (September 2013);
--'Criteria for Special-Purpose Vehicles in Structured Finance Transactions' (May 2014);
--'Counterparty Criteria for Structured Finance and Covered Bonds (May 2014);
--'Rating Criteria for U.S. Commercial Mortgage Servicers' (February 2014);
--'COMM 2014-SAVA (US CMBS)' (June 2014);
--'COMM 2014-SAVA - Appendix, (June 2014).
Applicable Criteria and Related Research:
Counterparty Criteria for Structured Finance and Covered Bonds
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158
Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=718468
Rating Criteria for U.S. Commercial Mortgage Servicers
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=735382
COMM 2014-SAVA (US CMBS)
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750896
COMM 2014-SAVA -- Appendix
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=751075
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748821
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=838791
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