NEW YORK--(BUSINESS WIRE)--Fitch Ratings has assigned ratings to Cantor Commercial Real Estate CFCRE 2016-C6 Mortgage Trust Commercial Mortgage pass-through certificates, series 2016-C6. A full list of ratings follows at the end of this release.
KEY RATING DRIVERS
Lower Fitch Leverage: The pool's leverage statistics are slightly better than those of other recent Fitch-rated, fixed- rate multiborrower transactions. The pool's Fitch DSCR and Fitch LTV of 1.19x and 103.6%, respectively, are slightly better than the YTD 2016 average Fitch DSCR and Fitch LTV of 1.19x and 105.8%, respectively. The Fitch Stressed DSCR and LTV for the conduit portion of the pool (net of Investment-Grade Credit-Opinion Loans) are 1.14x and 112.2%, respectively.
Investment-Grade Credit-Opinion Loans: Two loans representing 17.8% of the pool have investment-grade credit opinions. Potomac Mills (8.9% of the pool) received an investment grade credit opinion of 'BBBsf*' on a standalone basis. Vertex Pharmaceuticals HQ (8.9% of the pool) received an investment grade credit opinion of 'BBB-sf*' on a standalone basis.
Below-Average Amortization: Eight loans comprising 48.0% of the pool are full interest-only. This is worse than average when compared to other Fitch-rated U.S. multiborrower deals of 23.3% for 2015 and 32.4% for YTD 2016. There are 10 loans comprising 15.3% of the pool which are partial interest-only. This is better than averages of 43.1% for 2015 and 36.0% YTD 2016 for other Fitch-rated U.S. deals. Overall, the pool is scheduled to pay down by 8.9% which is worse than average when compared with the averages of 11.7% for 2015 and 10.3% YTD 2016 for the other Fitch-rated U.S. deals.
For this transaction, Fitch's net cash flow (NCF) was 12.68% below the most recent year's net operating income (NOI; for properties for which a full-year 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 in potential rating actions on the certificates.
Fitch evaluated the sensitivity of the ratings assigned to CFCRE 2016-C6 certificates and found that the transaction displays 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 12.
USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10
Fitch was provided with third-party due diligence information from KPMG LLP. The third party due diligence information was provided on Form ABS Due Diligence-15E and focused on a comparison and re-computation of certain characteristics with respect to each of the mortgage loans. Fitch considered this information in its analysis and the findings did not have an impact on the analysis.
REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS
A description of the transaction's representations, warranties and enforcement mechanisms (RW&Es) that are disclosed in the offering document and which relate to the underlying asset pool is available by accessing the appendix referenced under 'Related Research' below. The appendix also contains a comparison of these RW&Es to those Fitch considers typical for the asset class as detailed in the Special Report titled 'Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions' (May 2016).
Fitch has assigned the following ratings:
Cantor Commercial Real Estate CFCRE 2016-C6 Mortgage Trust Commercial Mortgage pass-through certificates, series 2016-C6
--$30,937,000 class A-1 'AAAsf'; Outlook Stable;
--$33,226,000 class A-SB 'AAAsf'; Outlook Stable;
--$220,000,000 class A-2 'AAAsf'; Outlook Stable;
--$267,118,000 class A-3 'AAAsf'; Outlook Stable;
--$551,281,000b class X-A 'AAAsf'; Outlook Stable;
--$98,443,000b class X-B 'AA-sf'; Outlook Stable;
--$59,066,000 class A-M 'AAAsf'; Outlook Stable;
--$39,377,000 class B 'AA-sf'; Outlook Stable;
--$37,408,000 class C 'A-sf'; Outlook Stable;
--$19,689,000ab class X-E 'BB-sf'; Outlook Stable;
--$7,875,000ab class X-F 'B-sf'; Outlook Stable;
--$42,331,000a class D 'BBB-sf'; Outlook Stable;
--$19,689,000a class E 'BB-sf'; Outlook Stable;
--$7,875,000a class F 'B-sf'; Outlook Stable.
(a) Privately placed and pursuant to Rule 144A.
(b) Notional amount and interest-only.
Since Fitch issued its presale report on October 25, 2016, the interest-only classes X-C and X-D were removed from the transaction and the ratings were subsequently withdrawn as they were no longer applicable. Fitch does not rate the $30,517,880ab interest-only class X-G or the $30,517,880a class G. The classes above reflect the final ratings and deal structure.
Additional information is available at www.fitchratings.com.
Counterparty Criteria for Structured Finance and Covered Bonds (pub. 01 Sep 2016)
Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions (pub. 18 Aug 2016)
Criteria for Analyzing Multiborrower U.S. and Canadian Commercial Mortgage Transactions (pub. 01 Jul 2016)
Criteria for Rating Caps and Limitations in Global Structured Finance Transactions (pub. 16 Jun 2016)
Global Structured Finance Rating Criteria (pub. 27 Jun 2016)
Rating Criteria for Structured Finance Servicers (pub. 01 Jul 2016)
Rating Criteria for U.S. Commercial Mortgage Servicers (pub. 14 Feb 2014)
U.S. and Canadian Multiborrower CMBS Surveillance Criteria (pub. 11 Nov 2016)
CFCRE Mortgage Trust 2016-C6 -- Appendix
Dodd-Frank Rating Information Disclosure Form
ABS Due Diligence Form 15E 1
ABS Due Diligence Form 15E 2
ABS Due Diligence Form 15E 3
ABS Due Diligence Form 15E 4
ABS Due Diligence Form 15E 5
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