Fitch to Rate COMM 2015-LC19 Commercial Mortgage Trust Pass-Through Ctfs; Presale Issued

NEW YORK--()--Fitch Ratings has issued a presale report on Deutsche Bank Securities, Inc.'s COMM Mortgage Trust 2015-LC19 Commercial Mortgage Pass-Through Certificates.

Fitch expects to rate the transaction and assign Rating Outlooks as follows:

--$50,900,000 class A-1 'AAAsf'; Outlook Stable;

--$45,000,000 class A-2 'AAAsf'; Outlook Stable;

--$81,648,000 class A-SB 'AAAsf'; Outlook Stable;

--$300,000,000 class A-3 'AAAsf'; Outlook Stable;

--$518,619,000 class A-4 'AAAsf'; Outlook Stable;

--$1,070,879,000a class X-A 'AAAsf'; Outlook Stable;

--$74,712,000b class A-M 'AAAsf'; Outlook Stable;

--$107,287,000b class B 'AA-sf'; Outlook Stable;

--$247,761,000b class PEZ 'A-sf'; Outlook Stable;

--$65,762,000b class C 'A-sf'; Outlook Stable;

--$173,049,000ac class X-B 'A-sf'; Outlook Stable;

--$70,656,000ac class X-C 'BBB-sf'; Outlook Stable;

--$70,656,000c class D 'BBB-sf'; Outlook Stable;

--$33,799,000c class E 'BB-sf'; Outlook Stable;

--$14,231,000c class F 'B-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 January 20, 2015. Fitch does not expect to rate the $14,544,000 class G or the $45,937,880 class H certificates.

The certificates represent the beneficial ownership interest in the trust, primary assets of which are 59 loans secured by 139 commercial properties having an aggregate principal balance of approximately $1.4 billion, as of the cutoff date. The loans were contributed to the trust by German American Capital Corporation, Ladder Capital Finance, LLC, Cantor Commercial Real Estate Lending, L.P. and KeyBank National Association.

Fitch reviewed a comprehensive sample of the transaction's collateral, including site inspections on 71.8% of the properties by balance, cash flow analysis of 79.6%, and asset summary reviews on 79.6% of the pool.

KEY RATING DRIVERS

High Fitch Leverage: The transaction has slightly higher leverage than other recent Fitch-rated fixed-rate multi-borrower transactions. The pool's Fitch DSCR of 1.18x is in line with the 2014 average of 1.18x, while the pool's Fitch LTV of 108.9% is worse than the 2014 average of 107.5%.

Limited Amortization: The pool is scheduled to amortize by 9.67% of the initial pool balance prior to maturity which is less than other recent transactions. Thirteen loans (40.7%) are full-term interest only and 21 loans (29.3%) are partial interest only. Fitch-rated transactions in 2014 had an average full-term interest-only percentage of 19.9% and a partial interest only percentage of 42.5%.

Strong Property Quality: Fitch assigned property quality grades of 'A-' to five properties that represent 40.0% of the pool balance for Fitch sampled loans, including three properties in the top 10: One Memorial (10.1% of the pool), Gateway Center Phase II (7.4% of the pool) and 9911 Belward Campus Drive (6.9% of the pool). Additionally, nine of the largest ten properties in the pool are located in primary markets including Boston/Cambridge, New York, Washington, D.C., Los Angeles, San Diego, Houston and Seattle.

RATING SENSITIVITIES

For this transaction, Fitch's net cash flow (NCF) was 15.3% below the most recent net operating income (NOI; for properties for which a recent 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 2015-LC19 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 'A-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 10 - 11.

The master and special servicer will be Midland Loan Services, a Division of PNC Bank, National Association, rated 'CMS1' and 'CSS1' by Fitch.

Additional Information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions' (June 18, 2014);

--'Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions September 2014;

--'Global Structured Finance Rating Criteria' (Aug. 20, 2014);

--'Rating Criteria for U.S. Commercial Mortgage Servicers' (Feb. 14, 2014);

--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 10, 2014);

--'Counterparty Criteria for Structured Finance and Covered Bonds' (May 14, 2014).

Applicable Criteria and Related Research: COMM 2015-LC19 Mortgage Trust

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=856968

Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748778

Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=772328

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

Rating Criteria for U.S. Commercial Mortgage Servicers

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=735382

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608

Counterparty Criteria for Structured Finance and Covered Bonds

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=973815

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Contacts

Fitch Ratings
Primary Analyst
Abigail Kagan, +1 212-908-0516
Analyst
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Clement Okeke, +1-312-606-2323
Analyst
or
Committee Chairperson
Robert Vrchota, +1-312-368-3336
Managing Director
or
Media Relations, New York
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Abigail Kagan, +1 212-908-0516
Analyst
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Clement Okeke, +1-312-606-2323
Analyst
or
Committee Chairperson
Robert Vrchota, +1-312-368-3336
Managing Director
or
Media Relations, New York
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com