NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed 13 classes of WFRBS commercial mortgage Trust 2013-C17 pass-through certificates. A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The affirmations are due to the overall stable performance of the underlying collateral pool. Fitch reviewed the most recently available financial performance data for the pool, as well as updated rent rolls for the top 15 loans, which represent 54.4% of the transaction. Of the loans in the pool, 82.6% reported 2013 year-end financials.
As of the September 2014 distribution date, the pool's aggregate principal balance has been reduced by 0.7% to $987.9 million from $904.4 million at issuance. Currently there are no specially serviced or defeased loans. Fitch has designated five loans (10.1%) as Fitch Loans of Concern (LOC), three of which are also reported on the servicer Watchlist. The Fitch LOCs, though underperforming expectations at issuance, continue to perform and Fitch does not anticipate imminent default at this time.
The servicer reported a significant drop in occupancy at The Barlow, a 174,901 square foot (SF) mixed-use retail and industrial property located in Sebastopol, CA. The property collateralizes the 8th largest loan in the transaction, representing 2.7% of the pool. As of first quarter 2014 (1Q'14), the property occupancy was reported at 78%, compared to 90% at year-end (YE) 2013 and 95.3% at issuance. The debt service coverage ratio (DSCR) has declined to 1.25x, compared to 1.3x at YE2013 and 1.59x at issuance. In reviewing the servicer provided rent roll, it appears that a portion of the development that is not part of the loan collateral was included in the tenant roster. Fitch has asked for clarification, but given that reported cash flow has declined, Fitch will continue to monitor the loan's performance.
The largest loan in the pool, Hilton Sandestin Beach Resort & Spa (8.4%), is a 10-year interest-only (IO) loan secured by a 598-room full-service beachfront hotel located within the 2,400-acre Sandestin Resort in Destin, Florida. The loan is performing in line with underwriting expectations. Per the August 2014 STAR report, trailing 12-month (TTM) occupancy, average daily rate (ADR) and revenue per available room (RevPar) were 62.5%, $227.04, and $141.91, respectively, compared to 67.4%, $209.59, and $141.26 at issuance. The servicer reported 2Q'14 DSCR was 4.62x, compared to 3.91x at issuance.
The second largest loan, Matrix Portfolio (7.3%), is a five-year partial IO loan (i.e. interest-only for the initial 12 months) secured by a portfolio of 11 cross-collateralized and cross-defaulted manufactured housing communities located in Michigan (10 properties) and Alabama (one property) totaling 5,347 pads, including 840 park-owned homes. The portfolio consists of seven all-age and four age-restricted properties. The loan has a companion $69.5 million pari-passu note which is part of the GS 2013-J16 transaction. The loan is performing in line with issuer underwriting expectations. The servicer reported 2Q14 portfolio DSCR and occupancy rate were 1.66x and 68%, compared to 1.51x and 68.7% at issuance.
The third largest loan (6.1%) is secured by 997,549 sf of the 1.6 million sf Westfield Mission Valley Mall in San Diego, CA. The property is well-located just north of San Diego, immediately off of Interstate 8. The Westfield Mission Valley Mall has 115 stores and is anchored by Macy's (non-collateral), Target, Bed Bath & Beyond and Nordstrom Rack. The loan has a companion $100 million pari-passu note which is part of the WFRBS 2013-C16 transaction. The collateral is performing in line with underwritten expectations. As of July 2014, the property was 98.3% occupied, the same level since issuance. Servicer reported 1Q'13 DSCR was 3.0x, compared to 3.23x at issuance.
RATING SENSITIVITIES
The Rating Outlook for all classes remains Stable. Due to the recent issuance of the transaction and stable performance, Fitch does not foresee positive or negative ratings migration until a material economic or asset-level event changes the transaction's portfolio-level metrics. Additional information on rating sensitivity is available in the report 'WFRBS Commercial Mortgage Trust 2013-C17' (Feb. 5, 2014) at www.fitchratings.com.
Fitch affirms the following classes as indicated:
--$42 million class A-1 at 'AAAsf', Outlook Stable;
--$166.9 million class A-2 at 'AAAsf', Outlook Stable;
--$125 million class A-3 at 'AAAsf', Outlook Stable;
--$236.9 million class A-4 at 'AAAsf', Outlook Stable;
--$55.8 million class A-SB at 'AAAsf', Outlook Stable;
--$73.5 million class A-S at 'AAAsf', Outlook Stable;
--$58.8 million class B at 'AA-sf', Outlook Stable;
--$31.6 million class C at 'A-sf', Outlook Stable;
--$47.5 million class D at 'BBB-sf', Outlook Stable;
--$15.8 million class E at 'BBsf', Outlook Stable;
--$9 million class F at 'Bsf', Outlook Stable;
--Interest - Only class X-A at 'AAAsf'; Outlook Stable;
--Interest - Only class X-B at 'AA-sf'; Outlook Stable.
Fitch does not rate the class G or class X-C certificates.
A comparison of the transaction's Representations, Warranties, and Enforcement (RW&E) mechanisms to those of typical RW&Es for the asset class is available in the following report:
-- WFRBS Commercial Mortgage Trust 2013-C17 -- Appendix' (Feb. 5, 2014).
Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 11, 2013 report, 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is available at 'www.fitchratings.com' under the following headers:
Structured Finance >> CMBS >> Criteria Reports
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (Aug. 4, 2014);
--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 11, 2013).
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724961
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=901294
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.