Fitch Affirms MSBAM 2015-C22

NEW YORK--()--Fitch Ratings has affirmed 12 classes of Morgan Stanley Bank of America Merrill Lynch Trust (MSBAM) 2015-C22 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 overall stable performance. The stable performance reflects no material changes to pool metrics since issuance, therefore the original rating analysis was considered in affirming the transaction. Fitch reviewed the most recently available financial performance data for the pool, as well as updated rent rolls for the top 15 loans, which represent 56.4% of the transaction. Of the loans in the pool, 29% reported 2015 year-end financials and 59% reported September 2015 financials.

The transaction has a high concentration of hotels (23%). Given the increased supply that has entered the U.S. market, Fitch is monitoring the performance of this asset class. One hotel loan in the top 15 (4.1%) located in Houston, will be closely watched due its location and exposure to the oil and energy industry. As of the March 2016 remittance, the pool has one specially serviced loan and two loans that are on the servicer watchlist (5.1%).

The pool's aggregate principal balance has been paid down by approximately 0.7% since issuance. Concentrations in the pool include 27.2% full-term interest-only loans and 34.7% partial-term interest-only. The three largest geographic concentrations for the transaction are the New York-Newark-Jersey City MSA (16.2%), Chicago-Naperville-Elgin MSA (12.7%), Houston-The Woodlands-Sugar Land MSA (6.4%). The pool's maturity dates are concentrated between 2020 (6.3%), 2022 (0.9%), 2024 (4.5%), and 2025 and beyond (88.4%).

The largest loan in the pool is the 300 South Riverside Plaza Fee (9.1% of the pool), which is secured by the leased fee interest in the parcel of land situated beneath 300 South Riverside Plaza, a 23-story 1,040,706 square foot (sf) office building located in Chicago's West Loop submarket. The lease has a term of 99 years and is supported by the building's operations. In the event of a default under the net lease payment, the sponsor may take possession of the building operations. The building is currently 97.9% leased to 27 tenants, with the largest tenant, JP Morgan Chase, occupying 482,722 sf. Building amenities include a news stand, two restaurants and an outdoor plaza. There is also a $67 million Pari Pasu piece which is in MSC 2015-MS1 (not rated by Fitch). The servicer reported September 2015 net operating income (NOI) debt service coverage ratio (DSCR) was 1.50x and the February 2016 occupancy was 98%.

The second largest loan in the pool is Waterfront at Portchester (7.3% of the pool), which is secured by 349,743 sf, five-building power center anchored by a Super Stop & Shop. In addition to the 70,216 sf Super Stop & Shop, the Waterfront at Port Chester Property is anchored by Bed Bath & Beyond, Marshalls, Michaels, Petco. There is also a 14-screen AMC Loews Theater and Crunch Fitness health club. The subject is shadow anchored by a 120,000 sf Costco complex. The servicer reported September 2015 NOI DSCR was 1.78x and the occupancy was 93% compared to 95.6% at issuance.

The fifth largest loan in the pool is the Hilton Houston Westchase (4.1% of the pool), which is secured by full servicer hotel with 297 rooms built in 1980 and renovated in 2014. The subject is located approximately eight miles from downtown Houston in the Westchase District. Demand for the subject is estimated to be 45% corporate, 35% meeting and group, and 20% leisure. Top corporate accounts include Schlumberger, Expedia.com, Chevron, Phillips, Hotwire.com, Shell Oil, and IBM. Due to the large concentration of corporate accounts with exposure to the oil and energy industry, Fitch will continue to monitor the performance of this loan. The servicer reported September 2015 NOI DSCR was 2.33x. According to the STR report from January 2016, occupancy was 79%, average daily rate (ADR) was $141 and revenue per available room (Rev Par) was $112 versus the comp set of 62%, $123, and $76 respectively.

RATING SENSITIVITIES

The Rating Outlook for all classes remains Stable due to stable collateral 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.

DUE DILIGENCE USAGE

No third-party due diligence was provided or reviewed in relation to this rating action.

Fitch affirms the following classes as indicated:

--$47.8 million class A-1 at 'AAAsf'; Outlook Stable;

--$66.5 million class A-2 at 'AAAsf'; Outlook Stable;

--$84.7 million class A-SB at 'AAAsf'; Outlook Stable;

--$250 million class A-3 at 'AAAsf'; Outlook Stable;

--$318.8 million class A-4 at 'AAAsf'; Outlook Stable;

--$60.9 million class A-S at 'AAAsf'; Outlook Stable;

--$63.7 million class B at 'AA-sf'; Outlook Stable;

--$51.2 million class C at 'A-sf'; Outlook Stable;

--$62.3 million class D at 'BBB-sf'; Outlook Stable;

--$26.3 million class E at 'BB-sf'; Outlook Stable;

--$13.8 million class F at 'B-sf'; Outlook Stable;

--$0 class PST at 'A-sf'; Outlook Stable.

--$828.7* million class X-A at 'AAAsf'; Outlook Stable;

--$63.7* million class X-B at 'AA-sf'; Outlook Stable.

*Notional and interest-only.

Fitch does not rate the classes G and H certificates.

Additional information is available at www.fitchratings.com

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

Counterparty Criteria for Structured Finance and Covered Bonds: Derivative Addendum (pub. 14 May 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744175

Criteria for Rating Caps and Limitations in Global Structured Finance Transactions (pub. 28 May 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748781

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

U.S. and Canadian Fixed-Rate Multiborrower CMBS Surveillance and U.S. Re-REMIC Criteria (pub. 13 Nov 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=873395

Related Research

MSBAM Commercial Mortgage Trust 2015-C22 -- Appendix

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864287

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1002614

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1002614

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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Contacts

Fitch Ratings
Primary Analyst
Darren Liss
Director
+1-212-908-0753
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Christopher Bushart
Senior Director
+1-212-908-0606
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Darren Liss
Director
+1-212-908-0753
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Christopher Bushart
Senior Director
+1-212-908-0606
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com