DBRS Rates CSMC Trust 2013-TH1 Mortgage Pass-Through Certificates, Series 2013-TH1

DBRS, Inc. (DBRS) has assigned the following ratings to the Mortgage Pass-Through Certificates, Series 2013-TH1 issued by CSMC Trust 2013-TH1 (the Trust).

-- $ 392.4 million Class A-1 rated at AAA (sf)
-- $ 392.4 million Class A-IO-1* rated at AAA (sf)

• Denotes interest only class, the class balance represents a notional amount.

The AAA (sf) ratings in this transaction reflect the 7.05% of credit enhancement provided by subordination. Other than the specified classes above, DBRS does not rate any other classes in this transaction.

The Trust contains a portfolio of prime residential mortgage loans. The originators for the mortgage pool are Quicken Loans, Inc. (19.1%), PHH Mortgage Corporation (17.7%), BofI Federal Bank (9.9%), First Savings Mortgage Corporation (9.6%), Skyline Financial Corp. (8.4%), Caliber Funding LLC (8.3%), Pinnacle Capital Mortgage Corporation (5.4%) and various others (21.6%). The loans will be serviced by Select Portfolio Servicing Inc. (82.3%) and PHH Mortgage Corporation (17.7%). Wells Fargo Bank, N.A. (“Wells Fargo”) will act as the Master Servicer and Securities Administrator, and Christiana Trust, a division of Wilmington Savings Fund Society, FSB will serve as trustee. The transaction employs a senior-subordinate shifting-interest cash flow structure that is enhanced from a traditional one.

The originators provide traditional life-time representations and warranties to the Trust. Any disputes are ultimately subject to determination made in a related arbitration proceeding. The loans also benefit from representations and warranties back-stopped by the Seller, DLJ Mortgage Capital, Inc., a wholly owned subsidiary of Credit Suisse (USA), Inc., in the event of an originator’s bankruptcy or insolvency proceeding, or if the originator fails to cure, repurchase or substitute such breach or loans. However such backstop is subject to certain conditions and sunset provisions.

DBRS views this representations and warranties standard stronger than that of the previously-closed CSMC 2012-CIM3 transaction, which DBRS did not rate. However the relatively weak financial strength of the originators and the conditional backstop by the Seller still demand additional penalties and credit enhancement protections. The full description of the representations and warranties standard, the mitigating factors and DBRS’s loss adjustments are detailed in the related rating report.

Note:
All figures are in U.S. dollars unless otherwise noted.

The applicable methodologies are:
• RMBS Insight: U.S. Residential Mortgage-Backed Securities Loss Model and Rating Methodology
• Unified Interest Rate Model for U.S. RMBS Transactions
• Third-Party Due Diligence Criteria for U.S. RMBS Transactions
• Representations and Warranties Criteria for U.S. RMBS Transactions
• Legal Criteria for U.S. Structured Finance Transactions

The full report providing additional analytical detail is available by clicking on the link below or by contacting us at info@dbrs.com.

The Rule 17g-7 Report of Representations and Warranties is hereby incorporated by reference and can be found by clicking the link below or by contacting us at info@dbrs.com.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.