Fitch to Rate BBCMS Trust 2015-SLP Commercial Mortgage P-T Certificates; Presale Issued

CHICAGO--()--Fitch Ratings has issued a presale report on BBCMS Trust 2015-SLP commercial mortgage pass-through certificates, Series 2015-SLP.

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

--$200,000,000a class A 'AAAsf'; Outlook Stable;

--$68,000,000a class B 'AAAsf'; Outlook Stable;

--$55,100,000a class C 'A+sf'; Outlook Stable;

--$75,600,000a class D 'BBB-sf'; Outlook Stable;

--$76,300,000a class E 'BB-sf'; Outlook Stable.

The following classes are not expected to be rated:

--$464,000,000ab class X-CP;

--$580,000,000ab class X-NCP;

--$105,000,000a class F.

aPrivately placed pursuant to Rule 144A.

bNotional amount and interest-only

The expected ratings are based on information provided by the issuer as of Feb. 10, 2015.

The certificates represent the beneficial ownership in the trust, the primary asset of which is one loan having an aggregate principal balance of $580 million as of the cutoff date. The trust is secured by the mortgage loan secured by 135 hotel properties totaling 9,601 keys and a pledge by TMI Mortgage Opco Holdings, L.L.C., a Delaware limited liability company, of the equity interests in the Op Co Mortgage Borrowers. The sponsor is Starwood Capital Group Global II, L.P., an affiliate of Starwood Capital Group. The loan was co-originated by Barclays Bank PLC (50%) and Bank of America, N.A.(50%).

Highly Granular and Diverse Portfolio: The portfolio is composed of 135 properties across 21 states and 15 different hotel flags. No single asset accounts for more than 2.2% of the TTM November 2014 net cash flow.

High Trust Leverage: Fitch's stressed debt service coverage ratio (DSCR) and loan-to-value (LTV) for the trust component of the debt are 1.04x and 102.6%, respectively. The Fitch DSCR and LTV for the Fitch rated classes are 1.27x and 84.0% respectively.

Market Positioning and Asset Quality: The portfolio is considered to have above-average performance within the respective markets with a TTM November 2014 RevPAR penetration level of approximately 122.1% by allocated loan amount. Although the vintage is considered to be below average with an average age of approximately 17 years, approximately 83.7% of the guestrooms built prior to 2010 have undergone major renovations in the past five years.

Hotel Flag Conversions: Approximately 11.9% of the hotels in the portfolio, by number of properties, carry the Marriott Fairfield Inn flag (16 hotels). The sponsor plans to invest additional capital through 2017 including converting nine additional Fairfield Inns to Fairfield Inn & Suites which is anticipated to result in higher room rates for these properties. Approximately $41.8 million was reserved up-front to cover 50% of the estimated future capital expenditures. The sponsor provided a guaranty for the remaining 50%.

Exposure to Energy Markets: The portfolio includes exposure to certain energy industry-dependent states including a 27% concentration in Texas based on TTM November 2014 net cash flow. Fitch is concerned about the impact that recent pricing volatility may have on the overall economic performance in markets with a high exposure to this industry and applied an additional credit loss due to the portfolio's exposure to potential performance volatility within this region.

RATING SENSITIVITIES

Fitch found that the property could withstand a 68.8% decline in value and an approximate 58.9% decrease in the Fitch's net cash flow prior to experiencing $1 of loss to any 'AAAsf' rated classes.

Fitch performed several stress scenarios in which the Fitch net cash flow (NCF) was stressed. Fitch determined that a 72.2% reduction in Fitch's NCF would cause the notes to break even at a 1x DSCR, based on the actual debt service.

Fitch evaluated the sensitivity of the ratings for class A and found that a 35.1% decline in Fitch NCF would result in a one-category downgrade, while a 51.2% decline would result in a downgrade to below investment grade.

The Rating Sensitivity section in the presale report includes a detailed explanation of additional stresses and sensitivities. Key Rating Drivers and Rating Sensitivities are further described in the accompanying presale report. The presale report is available to all investors on Fitch's web site 'www.fitchratings.com'.

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

Applicable Criteria and Related Research:

-Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions (September 2014)

-Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions (June 2014)

-Global Structured Finance Rating Criteria (August 2014)

-Counterparty Criteria for Structured Finance and Covered Bonds (May 2014)

-Rating Criteria for U.S. Commercial Mortgage Servicers, (February 2014)

-Counterparty Criteria for Structured Finance and Covered Bonds (May 2014)

-Surveillance Criteria for U.S. CREL CDOs and CMBS Large Loan Floating-Rate Transactions (November 2013)

Applicable Criteria and Related Research: BBCMS Trust 2015-SLP (US CMBS)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863415

Surveillance Criteria for U.S. CREL CDOs

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=811268

Counterparty Criteria for Structured Finance and Covered Bonds

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

Global Structured Finance Rating Criteria

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

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

Rating Criteria for U.S. Commercial Mortgage Servicers

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

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=981225

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.

Contacts

Fitch Ratings
Primary Analyst
Lauren Cerda
Senior Director
+1-312-606-2317
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Secondary and Surveillance Analyst
Stacey McGovern
Director
+1-212-908-0722
or
Committee Chairperson
Eric Rothfeld
Managing Director
+1-212-908-0761
or
Media Relations:
Sandro Scenga, +1212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Lauren Cerda
Senior Director
+1-312-606-2317
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Secondary and Surveillance Analyst
Stacey McGovern
Director
+1-212-908-0722
or
Committee Chairperson
Eric Rothfeld
Managing Director
+1-212-908-0761
or
Media Relations:
Sandro Scenga, +1212-908-0278
sandro.scenga@fitchratings.com