NEW YORK--(BUSINESS WIRE)--Fitch Ratings assigns the following ratings and Rating Outlooks to Morgan Stanley Bank of America Merrill Lynch Trust, series 2014-C15 commercial mortgage trust pass-through certificates.
--$48,500,000 class A-1 'AAAsf'; Outlook Stable;
--$89,500,000 class A-2 'AAAsf'; Outlook Stable;
--$86,600,000 class A-SB 'AAAsf'; Outlook Stable;
--$210,000,000 class A-3 'AAAsf'; Outlook Stable;
--$321,231,000 class A-4 'AAAsf'; Outlook Stable;
--$808,469,000a class X-A 'AAAsf'; Outlook Stable;
--$52,638,000b class A-S 'AAAsf'; Outlook Stable;
--$80,982,000b class B 'AA-sf'; Outlook Stable;
--$178,160,000b class PST 'A-sf'; Outlook Stable;
--$44,540,000b class C 'A-sf'; Outlook Stable;
--$80,982,000ac class X-B 'AA-sf'; Outlook Stable;
--$64,786,000c class D 'BBB-sf'; Outlook Stable;
--$13,497,000c class E 'BB+sf'; Outlook Stable;
--$10,797,000c class F 'BB-sf'; Outlook Stable;
(a) Notional amount and interest only.
(b) Class A-S, class B and class C certificates may be exchanged for class PST Certificates, and class PST Certificates may be exchanged for class A-S, class B and class C certificates.
(c) Privately placed pursuant to Rule 144A.
Fitch does rate the $10,798,000 class G, the $18,896,000 class H, the $26,994,197 class J or the $67,485,197 interest-only class X-C.
Following the issuance of the expected ratings on March 19, 2014, the X-B class decreased from $125,522,000 to $80,982,000.
The certificates represent the beneficial ownership in the trust, primary assets of which are 48 loans secured by 76 commercial properties having an aggregate principal balance of approximately $1.080 billion as of the cutoff date. The loans were contributed to the trust by Morgan Stanley Mortgage Capital Holdings LLC; Bank of America, National Association; and CIBC Inc.
Fitch reviewed a comprehensive sample of the transaction's collateral, including site inspections on 77.8% of the properties by balance, cash flow analysis of 86.6%, and asset summary reviews on 86.6% of the pool.
KEY RATINGS DRIVERS
Improved Leverage from Recent Transactions: The Fitch stressed DSCR and LTV of 1.31x and 100.1% represent better leverage than Fitch-rated conduit transactions in the 4th quarter of 2013. Fitch-rated deals that closed in the 4th quarter of 2013 had average Fitch DSCR and LTV of 1.19x and 102.9%, respectively.
Highly Concentrated Pool: The top 10 loans represent 67.2% of the pool, which is the highest concentration among all Fitch-rated transactions between 2012 and 2014. The average top 10 balance for Fitch-rated transactions for full years 2012 and 2013 was 54.2% and 54.5%, respectively. The loan concentration index (LCI) is 632, among the highest of recent transactions rated by Fitch.
Large Hotel and Multifamily Concentration: At 20.3% and 18.7%, respectively, these levels are among the highest hotel and multifamily concentrations for Fitch-rated transactions in 2013 and 2014. Four of the top 10 loans are secured by hotel properties.
Credit Opinion Loan: The seventh largest loan in the pool, JW Marriott and Fairfield Inn & Suites (4.6%), has a Fitch credit opinion of 'BBB-sf' on a stand-alone basis. The loan is collateralized by JW Marriott and Fairfield Inn & Suites, which are situated adjacent to each other in downtown Indianapolis, IN. This loan participation is a $50 million, non-controlling pari passu portion of a $125 million loan.
RATING SENSITIVITIES
For this transaction, Fitch's net cash flow (NCF) was 11.41% below the most recent reported net operating income (NOI) (for properties that 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 severity on defaulted loans and could result in potential rating actions on the certificates. Fitch evaluated the sensitivity of the ratings assigned to MSBAM 2014-C15 certificates and found that the transaction displays average sensitivity to further declines in NCF. In a scenario in which NCF declined a further 10% from Fitch's NCF, a downgrade of the junior 'AAAsf' certificates to 'AA+sf' could result. In a scenario in which NCF declined a further 20% from Fitch's NCF, a downgrade of the junior 'AAAsf' certificates to 'A+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.
For a detailed description of Fitch's rating analysis, please see the presale report titled 'MSBAM 2014-C15 Commercial Mortgage Pass-Through Certificates', dated March 19,2014 and available on the Fitch Ratings web site at 'www.fitchratings.com'.
The master servicer will be Wells Fargo Bank, National Association, rated 'CMS1-' by Fitch. The special servicer will be Midland Loan Services, rated 'CSS1' by Fitch.
The presale report is available at 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions (August 2013);
--Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions (September 2013);
--Global Structured Finance Rating Criteria (June 6, 2012);
--Criteria for Special-Purpose Vehicles in Structured Finance Transactions (May 30, 2012);
--U.S. Commercial Mortgage Servicer Rating Criteria (February 18, 2011);
--U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria (December 18, 2012);
--Counterparty Criteria for Structured Finance and Covered Bonds (May 30, 2013).
Applicable Criteria and Related Research:
Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=715757
Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=718468
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661
Criteria for Special-Purpose Vehicles in Structured Finance Transactions - Effective 13 June 2011 to 30 May 2012
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=635249
U.S. Commercial Mortgage Servicer Rating Criteria -- Effective Feb. 18, 2011 to Feb. 14, 2014
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=584005
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724961
Counterparty Criteria for Structured Finance and Covered Bonds
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=707155
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=827007
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.