NEW YORK--(BUSINESS WIRE)--Fitch Ratings has issued a presale report on GS Mortgage Securities Trust Series 2014-GC26 commercial mortgage pass-through certificates.
Fitch expects to rate the transaction and assign Rating Outlooks as follows:
--$46,189,000 class A-1 'AAAsf'; Outlook Stable;
--$71,003,000 class A-2 'AAAsf'; Outlook Stable;
--$40,000,000 class A-3 'AAAsf'; Outlook Stable;
--$282,000,000 class A-4 'AAAsf'; Outlook Stable;
--$349,842,000 class A-5 'AAAsf'; Outlook Stable;
--$91,592,000 class A-AB 'AAAsf'; Outlook Stable;
--$971,195,000b class X-A 'AAAsf'; Outlook Stable;
--$56,483,000b class X-B 'AA-sf'; Outlook Stable;
--$92,569,000a class A-S 'AAAsf'; Outlook Stable;
--$56,483,000a class B 'AA-sf'; Outlook Stable;
--$189,846,000a class PEZ 'Asf'; Outlook Stable;
--$40,794,000a class C 'Asf'; Outlook Stable;
(a)Class A-S, B and C certificates may be exchanged for class PEZ certificates; and class PEZ certificates may be exchanged for class A-S, B and C certificates.
(b)Notional amount and interest-only.
The expected ratings are based on information provided by the issuer as of Nov. 14, 2014. Fitch does not expect to rate the $29,811,000 interest-only class X-C, the $29,811,000 class E, the $61,190,419 interest-only class X-D, the $95,707,000 class D, the $15,690,000 class F, the $12,551,000 class G, or the $32,949,419 class H.
The certificates represent the beneficial ownership in the trust, primary assets of which are 92 loans secured by 133 commercial properties having an aggregate principal balance of approximately $1.26 billion as of the cutoff date. The loans were contributed to the trust by Goldman Sachs Mortgage Company; Citigroup Global Markets Realty Corp.; Cantor Commercial Real Estate Lending, LLC, MC-Five Mile Commercial Mortgage Finance LLC; and Starwood Mortgage Funding I LLC.
Fitch reviewed a comprehensive sample of the transaction's collateral, including site inspections on 67.5% of the properties by balance, cash flow analysis of 75.9%, and asset summary reviews of 85% of the pool.
KEY RATING DRIVERS
High Fitch Leverage: The pool's Fitch DSCR and LTV of 1.13x and 109.6%, respectively, are worse than the 2013 and 2014 year to date (ended third quarter) averages of 1.29x and 101.6% and 1.19x and 106.9%, respectively.
Strong Pool Diversity: The pool diversity by loan amount is greater than other recent transactions. The largest loan represents 7.1% of the pool, and the top 10 loans represent only 40.2%. The average top 10 concentrations for year to date 2014 and 2013 conduit transactions were 50.8% and 54.5%, respectively. The LCI is 263 and the SCI is 273, which indicate a less concentrated level of sponsor and greater level of loan diversity, as compared to recently rated deals.
High Quality Properties: The pool has better than average property quality with 21.5% of the properties inspected by Fitch assigned a property quality grade of 'A' or 'A-', including five of the top 20 loans.
For this transaction, Fitch's net cash flow (NCF) was 11.47% 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 GSMS 2014-GC26 certificates and found that the transaction displays slightly above-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 'BBB+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 'BBB-sf' could result. The presale report includes a detailed explanation of additional stresses and sensitivities on pages 79 - 80.
The master servicer will be Wells Fargo Bank, National Association, rated 'CMS1-' by Fitch. The special servicer will be LNR Partners, LLC, LLC rated 'CSS1-' 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);
--Rating Criteria for U.S. Commercial Mortgage Servicers (February 2014);
--U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria (December 2013);
--Counterparty Criteria for Structured Finance and Covered Bonds (May 2013).
Applicable Criteria and Related Research: GS Mortgage Securities Trust 2014-GC26