NEW YORK--(BUSINESS WIRE)--Fitch Ratings has issued a presale report on Deutsche Bank Securities, Inc.'s COMM Mortgage Trust 2015-CCRE25 commercial mortgage pass-through certificates.
Fitch expects to rate the transaction and assign Rating Outlooks as follows:
--$49,855,000 class A-1 'AAAsf'; Outlook Stable;
--$15,061,000 class A-2 'AAAsf'; Outlook Stable;
--$88,315,000 class A-SB 'AAAsf'; Outlook Stable;
--$225,000,000 class A-3 'AAAsf'; Outlook Stable;
--$410,926,000 class A-4 'AAAsf'; Outlook Stable;
--$856,831,000b class X-A 'AAAsf'; Outlook Stable;
--$67,644,000b class A-M 'AAAsf'; Outlook Stable;
--$69,054,000 class B 'AA-sf'; Outlook Stable;
--$50,734,000 class C 'A-sf'; Outlook Stable;
--$57,780,000 class D 'BBB-sf'; Outlook Stable;
--$119,788,000ab class X-B 'A-sf'; Outlook Stable;
--$57,780,000ab class X-C 'BBB-sf'; Outlook Stable;
--$29,594,0000a class E 'BB-sf'; Outlook Stable.
(a) Privately placed and pursuant to Rule 144A.
(b) Notional amount and interest-only.
The expected ratings are based on information provided by the issuer as of July 28, 2015. Fitch does not expect to rate the $22,548,000 class F or the $40,869,434 class G.
The certificates represent the beneficial ownership interest in the trust, primary assets of which are 84 loans secured by 145 commercial properties having an aggregate principal balance of approximately $1.13 billion as of the cut-off date. The loans were contributed to the trust by German American Capital Corporation, Cantor Commercial Real Estate lending, L.P., Silverpeak Real Estate Finance LLC, KeyBank National Association, and Ladder Capital Financial LLC.
Fitch reviewed a comprehensive sample of the transaction's collateral, including site inspections on 62.7% of the properties by balance, cash flow analysis of 72.1%, and asset summary reviews on 72.1% of the pool.
KEY RATING DRIVERS
Leverage Slightly Higher than 2014 and 2015 Averages: The pool's Fitch debt service coverage ratio (DSCR) and loan to value (LTV) are 1.11x and 110.5%, respectively. The leverage metrics for this transaction are slightly higher than other recent Fitch-rated, fixed-rate multiborrower transactions. The 2014 average Fitch DSCR was 1.19x, and the average Fitch LTV was 106.2%. The 2015 year-to-date (YTD) averages have a DSCR and LTV of 1.21x and 109.1%, respectively.
Investment-Grade Credit Opinion Loans: Two loans totaling 6.7% of the pool have investment grade credit opinions on a stand-alone basis. Pearlridge Center (4.3%) has an investment grade opinion of 'BBBsf' and Scottsdale Quarter (2.5%) has an investment grade opinion of 'BBBsf'.
More Diverse Pool: The top 10 loans comprise 40.3% of the pool, which is lower than recent averages of 50.5% and 47.81% for 2014 and YTD 2015, respectively. Additionally, the loan concentration index (LCI) is 289, which is lower than the YTD 2015 average of 341.
For this transaction, Fitch's net cash flow (NCF) was 10.8% 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). The following rating sensitivities describe how the ratings would react to further NCF declines below Fitch's NCF. The implied rating sensitivities are only indicative of some of the potential outcomes and do not consider other risk factors to which the transaction is exposed. Stressing additional risk factors may result in different outcomes. Furthermore, the implied ratings, after the further NCF stresses are applied, are more akin to what the ratings would be at deal issuance had those further stressed NCFs been in place at that time.
Fitch evaluated the sensitivity of the ratings assigned to COMM 2015-CCRE25 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 senior '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 senior 'AAAsf' certificates to 'BBB-sf' could result. The presale report includes a detailed explanation of additional stresses and sensitivities on pages 11 - 12.
DUE DILIGENCE USAGE
Fitch was provided with third-party due diligence information from Ernst & Young 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 84 mortgage loans. Fitch considered this information in its analysis and the findings did not have an impact on our analysis. A copy of the ABS Due Diligence Form-15E received by Fitch in connection with this transaction may be obtained through the link contained on the bottom of the related rating action commentary (RAC).
Additional information is available at www.fitchratings.com.
COMM 2015-CCRE25 Commercial Mortgage Trust
Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)
Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions (pub. 20 Mar 2015)
Criteria for Analyzing Multiborrower U.S. and Canadian Commercial Mortgage Transactions (pub. 28 May 2015)
Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
Rating Criteria for Structured Finance Servicers (pub. 23 Apr 2015)
Rating Criteria for U.S. Commercial Mortgage Servicers (pub. 14 Feb 2014)
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria (pub. 10 Dec 2014)
Dodd-Frank Rating Information Disclosure Form