NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed 10 classes of Wells Fargo Commercial Mortgage Securities Inc. (WFRBS) commercial mortgage pass-through certificates series 2012-C6. A detailed list of rating actions follows at the end of this release.
Fitch has issued a focus report on this transaction. The report provides a detailed and up-to-date perspective on key credit characteristics of the WFRBS 2012-C6 transaction and property-level performance of the related trust loans.
KEY RATING DRIVERS
The affirmations are based on the stable performance of the underlying collateral. As of the October 2016 distribution date, the pool's aggregate principal balance has been reduced by 17.5% to $763.2 million from $925 million at issuance. There is one loan in special servicing (0.3%) and five loans are defeased (8.8%). Eight loans (10.1%) appear on the servicer watchlist due to declines in debt service coverage ratio (DSCR) or occupancy, large tenant lease expiration, and a pending loan maturity.
Stable Performance: Overall pool performance remains stable from issuance. As of year-end 2015, aggregate pool-level NOI improved 2.2% from 2014 and remains 4.5% higher than NOI at issuance.
Moderate Paydown and Defeasance: The transaction has paid down 17.5% from issuance including the payoff of the second largest loan, Windsor Hotel Portfolio II. Additionally, five loans (8.8%) are defeased including the third largest loan, WPC Self-Storage Portfolio (6.3%).
Transaction Amortization: Except for one interest-only loan (1.2%), all of the loans in the pool are amortizing as of October 2016. Twenty-eight loans, representing 25.5% of the pool, amortize on schedules of 25 years or less.
Granular Pool: With 83 loans, 143 properties, and a top 10 concentration of only 37.3%, this transaction is more diverse than other CMBS multiborrower transactions. Loans secured by multiple assets or cross collateralization represent 18.1% of the pool. The average loan size is $9.2 million as compared to $19 million for Fitch-rated transactions in the 2012 vintage.
High Retail Exposure: Loans backed by retail properties represent 39.4% of the pool, including seven within the top 15. Eleven loans (16.1%) have exposure to grocery anchor tenants. None of the retail loans have regional mall exposure.
Substantial Geographic Concentration: The pool is geographically concentrated with 38 properties (29.7% of the pool) located in California, including five of the top 15 loans. The properties are located in 10 different MSAs, with 28 properties (20.6%) located in Southern California and 10 (9.1%) in Northern California.
The specially serviced asset (0.3% of the pool) is secured by a 541-unit self-storage facility located in Ft. Worth, TX. The loan transferred in April 2015 due to the bankruptcy filing of a guarantor. The loan has remained current, as the guarantor's bankruptcy case is still pending. A rent roll dated June 2016 indicates that the property is 88% occupied. The DSCR as of June 2016 was reported to be 2.45x.
Two notable loans of concern include the following loans:
The Commerce Park IV & V loan (1.84%) is secured by a 229,459 square foot (sf) office property in Beachwood, OH. As of October 2016, occupancy declined to 83% from 92% at issuance. As a result of deteriorating occupancy trends, NOI has declined 26% from issuance. YE2015 NOI DSCR was 1.48x as compared to 2.01x at issuance. The loan is current as of the October 2016 remittance.
The Holiday Inn - Odessa loan (0.98%) is secured by a 102-key full-service hotel in Odessa, TX. As of March 2016, occupancy had declined to 54% from 72% in 2014 and 84% at issuance. The property is located in the oil and gas region of Texas, which has experienced declines in economic performance. As of March 2016, occupancy had declined to 54% with NOI DSCR of 1.10x as compared to 84% and 1.94x at issuance. The loan is current as of the October 2016 remittance.
Rating Outlooks for all classes remain Stable due to overall stable performance of the pool and continued amortization. Upgrades may occur with improved pool performance and additional paydown or defeasance. Downgrades to the classes are possible should overall pool performance decline.
USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10
No third-party due diligence was provided or reviewed in relation to this rating action.
Fitch affirms the following classes:
--$32.4 million class A2 at 'AAAsf'; Outlook Stable;
--$67.8 million class A3 at 'AAAsf'; Outlook Stable;
--$385.4 million class A4 at 'AAAsf'; Outlook Stable;
--$586.3 million class X-A at 'AAAsf'; Outlook Stable;
--$100.6 million class AS at 'AAAsf'; Outlook Stable;
--$42.8 million class B at 'AAsf'; Outlook Stable;
--$31.2 million class C at 'Asf'; Outlook Stable;
--$47.4 million class D at 'BBB-sf'; Outlook Stable;
--$13.9 million class E at 'BBsf'; Outlook Stable;
--$13.9 million class F at 'Bsf'; Outlook Stable.
Fitch does not rate the class X-B or G certificates.
The report is available at www.fitchratings.com or by clicking on the link.
Additional information is available at www.fitchratings.com
Counterparty Criteria for Structured Finance and Covered Bonds (pub. 01 Sep 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)
North America and Asia-Pacific Multiborrower CMBS Surveillance Criteria (pub. 01 Dec 2016)
Dodd-Frank Rating Information Disclosure Form
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