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 due to the overall stable performance of the underlying pool since issuance. As of the August 2014 distribution date, the pool's aggregate principal balance has been reduced by 2.7% to $1.02 billion from $1.05 billion at issuance. Fitch has designated one loan (3.7%) as a Fitch Loan of Concern and no loans are in special servicing. Year-end (YE) 2013 financials were available for 95% of the pool. The pool net operating income (NOI) has increased 2.2% since issuance. Two of the top 15 loans, OKC Industrial Portfolio (1.9%) and Santa Rosa Town Center (1.9%), have lease rollovers of 29% and 22% in 2015 for which no renewal information was available yet. Fitch added additional stresses to these loans to account for potential nonrenewal of tenants.

Fitch's loan of concern (3.7%) is secured by the Hyatt Regency Milwaukee, a 481-key, full-service hotel located in Milwaukee, WI. The hotel is located near the Bradley Center, US Cellular Center and is connected to the Wisconsin Center by an enclosed walkway. As per YE 2013 financials, the property's NOI was 47.4% below the underwritten NOI at issuance. The decrease in NOI was attributed to a 6% decline in revenues and a significant increase in expenses. Three new hotels totaling over 400 rooms were opened in downtown Milwaukee in 2013, which has increased competition. Furthermore, a nearby casino is adding a hotel that will bring an additional 400 rooms to the market in October 2014. The servicer reported occupancy and debt service coverage ratio (DSCR) for YE 2013 were 62% and 0.89x, respectively. This compares negatively to the YE 2012 occupancy and DSCR of 64% and 1.70x. The loan is on the master servicer's watchlist.

The largest loan in the pool (10.6%) is secured by a 1 million square foot (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, which just renewed its lease through January 2020. As of YE 2013, the properties were 95% occupied, compared to 93% at issuance. The servicer reported YE 2013 DSCR was 2.03x, compared to 1.70x at YE 2012 and 1.64x at issuance.

The second largest loan in the pool (5.7%) is secured by a 38-story office tower, three office buildings and two parking garages located in Kansas City, MO. The property is one of a handful of class-A office buildings in the downtown area and contains 844,456 sf of office space. As of second quarter 2014, the property was 92% occupied and the servicer reported DSCR was 2.35x. The property is performing above its underwritten occupancy and DSCR of 85% and 2.14x, respectively.

RATING SENSITIVITIES

Rating Outlooks for all classes remain Stable due to the relatively stable performance of the pool since issuance. Additional information on rating sensitivity is available in the report 'WFRBS Commercial Mortgage Trust 2012-C9' (Jan. 11, 2013), available at www.fitchratings.com.

Fitch affirms the following classes as indicated:

--$57.7 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;

--$801.9 million* class X-A at 'AAAsf', Outlook Stable;

--$101.3 million* class X-B at 'A-sf', 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.

*Notional amount and interest only.

Fitch does not rate the class G certificates.

A comparison of the transaction's Representations, Warranties, and Enforcement (RW&E) mechanisms to those of typical RW&Es for the asset class is available in the following report:

--'WFRBS Commercial Mortgage Trust 2012-C9' - Appendix' (Jan. 11, 2013).

Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 11, 2013 report, 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is available at 'www.fitchratings.com' under the following headers:

Structured Finance >> CMBS >> Criteria Reports

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (August 4, 2014);

--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 11, 2013);

--'WFRBS Commercial Mortgage Trust 2012-C9' - Appendix' (Jan. 11, 2013).

Applicable Criteria and Related Research:

WFRBS Commercial Mortgage Trust 2012-C9 -- Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=698812

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724961

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=869974

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
Daniel Anderson, +1 312-606-2305
Associate Director
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Committee Chairperson
Britt Johnson, +1 312-606-2341
Senior Director
or
Media Relations, New York
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Daniel Anderson, +1 312-606-2305
Associate Director
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Committee Chairperson
Britt Johnson, +1 312-606-2341
Senior Director
or
Media Relations, New York
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com