Fitch Affirms WFRBS 2012-C9

NEW YORK--()--Fitch Ratings has affirmed 12 classes of WFRBS Commercial Mortgage Trust 2012-C9 commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The affirmations are the result of the overall stable performance of the underlying pool since issuance. As of the August 2015 distribution date, the pool's aggregate principal balance has been reduced by 4.3% to $1.01 billion from $1.05 billion at issuance. Year-end (YE) 2014 financials were available for 100% of the pool. Two loans, representing 3.52% of the current balance, have defeased, both since Fitch's last rating action. The pool's YE 2014 net operating income (NOI) has increased 9.15% since issuance. Fitch has designated five loans (9.3%) as Fitch Loans of Concern, none of which are in default or in special servicing, and two (6.36%) of which are in the transaction's top 15.

The largest Fitch Loan of Concern is secured by a 481-key, full-service hotel located in downtown Milwaukee, WI. The hotel is in close proximity to the Bradley Center, US Cellular Center, and is connected to the Wisconsin Center by an enclosed walkway. Per commentary from the master servicer, the hotel was closed for 180 days in 2014 for planned repairs. These planned repairs have been satisfied, but additional repair obligations remain which are required to be completed by August 2016. Four new hotels have opened in the past two years, increasing competition in the local market. While NOI has increased year-over-year, it has decreased by 12.33% since issuance. The loan remains current but on the master servicer's watchlist.

Fitch is also monitoring the performance of a loan secured by a 150,300 square foot (sf) community shopping center located in Northridge, CA due to NOI decline. Tenants include Big Lots, David's Bridal, Pier 1 Imports and a number of other national and local tenants. YE2014 occupancy fell to 88% from 93% as of YE2013. Additionally, the servicer reported a decline in debt service coverage ratio (DSCR) to 1.41x as of YE2014 from 1.56x at YE2013. The property has substantial lease rollover occurring in the next three years, including 24% of current tenancy within a year, 9% in year two, and 32% in year three. Fitch added additional stresses on this loan to account for potential nonrenewal of tenants. The loan remains current.

The largest loan in the pool (10.6%) is secured by a 1 million sf regional mall with an adjacent strip shopping center located in North Chesterfield, VA. The property is anchored by Sears (non-collateral), JC Penney (non-collateral) and Macy's, whose lease extends into January 2020. As of YE2014, the properties were 85% occupied, compared to 95% over the same period the year prior. The servicer reported YE2014 DSCR was 1.79x, compared to 2.03x YE2013.

RATING SENSITIVITIES

Rating Outlooks on classes A-1 through F remain Stable due to relatively stable performance of the pool since last review and continued paydown. No rating changes are expected unless there is material performance deterioration or loans become specially serviced. Additional information on key rating drivers and rating sensitivities are further described in the new issue report WFRBS Commercial Mortgage Trust 2012-C9 (Oct. 31, 2012), available at www.fitchratings.com.

DUE DILIGENCE USAGE

No third-party due diligence was provided or reviewed in relation to this rating action.

Fitch affirms the following classes as indicated:

--$86.1 million class A-1 at 'AAAsf'; Outlook Stable;

--$110.4 million class A-2 at 'AAAsf'; Outlook Stable;

--$444.2 million class A-3 at 'AAAsf'; Outlook Stable;

--$96.2 million class A-SB at 'AAAsf'; Outlook Stable;

--$93.4 million class A-S at 'AAAsf'; Outlook Stable;

--$64.5 million class B at 'AA-sf'; Outlook Stable;

--$36.8 million class C at 'A-sf'; Outlook Stable;

--$42.1 million class D at 'BBB-sf'; Outlook Stable;

--$21.1 million class E at 'BBsf'; Outlook Stable;

--$19.7 million class F at 'Bsf'; Outlook Stable;

--$830.4 million* class X-A at 'AAAsf'; Outlook Stable;

--$101.3 million* class X-B at 'A-sf'; Outlook Stable.

*Notional amount and interest only.

Fitch does not rate the class G certificates.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria (pub. 10 Dec 2014)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608

Related Research

WFRBS Commercial Mortgage Trust 2012-C9 -- Appendix
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=698812

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form
https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=990030

Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=990030

Endorsement Policy
https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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:
Britt Johnson, +1-312-606-2341
Senior Director
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Committee Chairperson:
Christopher Bushart, +1-212-908-1606
Senior Director
or
Media Relations:
Sandro Scenga, +1-212-908-0278
New York
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst:
Britt Johnson, +1-312-606-2341
Senior Director
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Committee Chairperson:
Christopher Bushart, +1-212-908-1606
Senior Director
or
Media Relations:
Sandro Scenga, +1-212-908-0278
New York
sandro.scenga@fitchratings.com