NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed 17 classes of WFRBS Commercial Mortgage Trust 2014-LC14 commercial mortgage pass-through certificates. The Rating Outlook for all classes remains Stable. 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 collateral pool. Fitch reviewed the most recently available financial performance data for the transaction, as well as updated rent rolls for the top 15 loans, which represent 59.4% of the transaction. Of the loans in the pool, 71.1% reported 3Q'14 financials, 6.5% reported 2Q'14 financials, and 18.5% reported year-end (YE) 2013 financials,
As of the January 2015 distribution date, the pool's aggregate principal balance has been reduced by 0.6% to $1,246.3 million from $1,255.6 million at issuance. Currently there are no delinquent or specially serviced loans. Fitch has designated two loans (1.4%) as Fitch Loans of Concern (LOC), one of which is also reported on the servicer Watchlist. The Fitch LOCs reported third quarter (3Q) 2014 debt service coverage ratio (DSCR) below 1.00x.
The largest loan in the pool, AmericasMart (11% of the pool), is a 10-year amortizing balloon loan. The whole loan consists of four pari passu notes with a total current balance of $548.8 million, amortizing from $560 million at issuance. Only the A3 note is included in the trust. Located in the CBD of Atlanta, GA, the collateral is a 7.1 million square foot (sf) wholesale trade market that caters to a variety of retailers, wholesalers and manufacturers that engage in wholesale trade. With approximately 4.6 million sf of rentable area in four attached buildings, 3.5 million sf of which is permanent space. The 1.1 million sf of temporary exhibition space can be leased during trade shows. The loan is sponsored by AMC Inc. The servicer reported occupancy for the permanent space as of January 2014 was 88.1%, compared to 85% at UW. The loan is performing in line with issuer underwriting expectations.
The second largest loan, The PennCap Portfolio (7.2%), is a 10-year term partial interest-only loan (i.e. interest-only for the initial 24 months). The whole loan consists of two pari passu notes totaling $138.6 million. Only the A1 note is included in the trust. The collateral consists of 32 properties located within five different office/industrial parks in the Lehigh Valley area of Pennsylvania. The combined properties represent 1,432,661 sf of office and office/industrial flex space. The properties are currently occupied over 100 tenants across a wide variety of industries. Sponsored by PennCap Properties, the loan is performing in line with issuer underwriting expectations. As of September 2014, the portfolio was 91.9% occupied, compared to 91.3% at UW. Servicer reported 3Q 2014 DSCR was 1.41x, compared to 1.54x at issuance.
The third largest loan, The Outlet Collection/Jersey Gardens (6.4%), is a six year term interest-only loan. The whole loan consists of three pari passu notes totaling $350 million. Only the A3 note is included in the trust. The collateral is a 1.3 million sf outlet mall located in Elizabeth, NJ, which is 17 miles southwest of New York City. The mall includes over 200 tenants, consisting of manufacturer outlets, discount off-price stores, full-price retailers, restaurants and entertainment venues. The property is anchored by Loews Theaters (8.5% of NRA with 22 screens), Burlington Coat Factory (6.2%), Forever 21 (4.5%), Cohoes Fashions (4.5%), Marshalls (3.8%) and Bed Bath and Beyond (3.2%). Glimcher Properties was the original loan sponsor. As of January 2015 there is a new sponsor in conjunction with the Glimcher and Washington Prime merger. The loan is performing in line with issuer underwriting expectations. As of December 2014, the property was 99.6% occupied, compared to 99.4% at UW. Servicer reported 3Q'14 DSCR was 2.96x, unchanged from UW.
The Rating Outlook for all classes remains Stable. Due to the recent issuance of the transaction and stable performance, Fitch does not foresee positive or negative ratings migration until a material economic or asset-level event changes the transaction's portfolio-level metrics. Additional information on rating sensitivity is available in the report 'Wells Fargo Commercial Mortgage Trust, Series 2014-LC14' (January 28, 2014) at www.fitchratings.com.
Fitch affirms the following:
--$56.9 million Class A-1 at 'AAAsf'; Outlook Stable;
--$189.7 million Class A-2 at 'AAAsf'; Outlook Stable;
--$80 million Class A-3FL at 'AAAsf'; Outlook Stable;
--$0 Class A-3FX at 'AAAsf'; Outlook Stable;
--$175 million Class A-4 at 'AAAsf'; Outlook Stable;
--$278.5 million Class A-5 at 'AAAsf'; Outlook Stable;
--$89.5 million Class A-SB at 'AAAsf'; Outlook Stable;
--$95.7 million Class A-S at 'AAAsf'; Outlook Stable;
--$81.6 million Class B at 'AA-sf'; Outlook Stable;
--$47.1 million Class C at 'A-sf'; Outlook Stable;
--Class PEX Exchangeable Certificates at 'A-sf'; Outlook Stable;
--$64.3 million Class D at 'BBB-sf'; Outlook Stable;
--$22 million Class E at 'BBsf'; Outlook Stable;
--$12.6 million Class F at 'Bsf'; Outlook Stable;
--Interest - Only Class X-A at 'AAAsf'; Outlook Stable;
--Interest - Only Class X-B at 'BBB-sf'; Outlook Stable.
Fitch does not rate the IO class X-C or the class G. 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:
--Wells Fargo Commercial Mortgage Trust Series 2014-LC14 Representations and Warranties New Issue Appendix -- (March 25, 2014).
Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 10, 2014 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' (Aug. 4, 2014);
--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 10, 2014).
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria