NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed all 15 classes of Wells Fargo Bank, National Association, WFRBS Commercial Mortgage Trust 2012-C8 commercial mortgage pass-through certificates (WFRBS 2012-C8). A detailed list of rating actions follows at the end of this release.
KEY RATING DRIVERS
The affirmations are based on the overall stable performance of the pool's underlying collateral since issuance. As of the April 2016 distribution date, the pool's aggregate principal balance has been reduced by 4.5% to $1.24 billion from $1.3 billion at issuance. Per the servicer reporting, five loans (5.7% of the pool) are defeased. Interest shortfalls are currently affecting class H.
Fitch modeled losses of 2.7% of the remaining pool; expected losses on the original pool balance total 2.5%. The pool has experienced no realized losses to date. Fitch has designated three loans (4.2%) as Fitch Loans of Concern, which includes one specially serviced loan (0.2%). The deterministic stress scenario was used in Fitch's analysis. In addition, there was a variance from criteria related to classes B, C, D, and E, for which the model output suggested that an upgrade was possible. Fitch determined, however, that an upgrade was not warranted at this time as there have been no material changes to the performance of the pool since issuance and no significant increase in credit enhancement.
The largest Fitch Loan of Concern is the Plaza on Richmond loan (3.5%), which is secured by a 193,636 square foot (sf) retail center located in Houston, TX. The subject is anchored by 24 Hour Fitness (19.08% of net rentable area) through a lease that expires in October 2024. Other tenants include TJ Maxx (15%, expiry January 2023), and Golf Galaxy (8%, expiry May 2020). Per servicer reporting, the net operating income (NOI) debt service coverage ratio (DSCR) dropped to 1.32x as of year-end (YE) 2015 from 1.39x as o, as the interest-only period of the loan burned off in 2014. The subject was 89% occupied as of the December 2015 rent roll.
The next largest contributor to modeled losses is a loan (0.6%) secured by a 96-room, extended-stay hotel located in San Angelo, TX. The subject has experienced a drastic decline in occupancy due to a surplus of hotel rooms available and decreased demand for lodging from oil and gas sector employees, the subject's primary client base. Full-year occupancy declined to 53% in 2015 from 74% in 2014. The NOI DSCR was 0.89x as of December 2015. The loan has been added as a Fitch Loan of Concern and will continue to be monitored for further deterioration in performance.
The third largest contributor to modeled losses is a specially serviced loan (0.1%) secured by a 463-unit self-storage facility located in Houston, TX. The loan transferred to the special servicer in April 2015 due to the bankruptcy filing of a guarantor. The special servicer indicates it has filed a Proof of Claim against the guarantor to which the guarantor has filed an Objection. The most recent rent roll and financials provided by the servicer were as of September 2014 and showed the subject as 89% occupied with a year-to-date NOI DSCR of 1.65x. The loan remains current, but will continue to be monitored for a resolution between the guarantor and the lender.
The Rating Outlooks on all classes remain Stable. Fitch does not foresee positive or negative ratings migration until a material economic or asset level event changes the transaction's overall portfolio-level metrics.
DUE DILIGENCE USAGE
No third-party due diligence was provided or reviewed in relation to this rating action.
Fitch affirms the following classes:
--$38.7 million class A-1 at 'AAAsf'; Outlook Stable;
--$187.7 million class A-2 at 'AAAsf'; Outlook Stable;
--$414.1 million class A-3 at 'AAAsf'; Outlook Stable;
--$96.9 million class A-SB at 'AAAsf'; Outlook Stable;
--$115 million class A-FL at 'AAAsf'; Outlook Stable;
--$0 class A-FX at 'AAAsf'; Outlook Stable;
--$966.2 million* class X-A at 'AAAsf'; Outlook Stable;
--$113.8 million class A-S at 'AAAsf'; Outlook Stable;
--$66.7 million class B at 'AAsf'; Outlook Stable;
--$66.7 million class X-B at 'AAsf'; Outlook Stable;
--$43.9 million class C at 'Asf'; Outlook Stable;
--$26 million class D at 'BBB+sf'; Outlook Stable;
--$45.5 million class E at 'BBB-sf'; Outlook Stable;
--$22.8 million class F at 'BBsf'; Outlook Stable;
--$26 million class G at 'Bsf'; Outlook Stable.
*Notional and interest-only.
Fitch does not rate the class H certificates.
Additional information is available at www.fitchratings.com.
Criteria for Rating Caps and Limitations in Global Structured Finance Transactions (pub. 28 May 2014)
Exposure Draft: Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 Apr 2016)
Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
U.S. and Canadian Fixed-Rate Multiborrower CMBS Surveillance and U.S. Re-REMIC Criteria (pub. 13 Nov 2015)
WFRBS Commercial Mortgage Trust 2012-C8 Appendix
Dodd-Frank Rating Information Disclosure Form