DBRS Assigns Final Ratings on GSMS 2013-G1

DBRS has today assigned final ratings to the following classes of Commercial Mortgage Pass-Through Certificates (the Certificates) issued by GSMS 2013-G1 Mortgage Trust. The trends are Stable.

– Class A-1 at AAA (sf)
– Class A-2 at AAA (sf)
– Class X-A at AAA (sf)
– Class B at AA (sf)
– Class C at A (sf)
– Class D at BBB (low) (sf)
– Class DM at BB (sf)

All classes have been privately placed pursuant to Rule 144a.

Class DM is secured by a non-pooled subordinate rake bond associated solely with the Deptford Mall loan.

The Class X-A balance is notional. DBRS ratings on interest-only certificates address the likelihood of receiving interest based on the notional amount outstanding. DBRS considers the interest-only certificate’s position within the transaction payment waterfall when determining the appropriate rating.

The collateral consists of three fixed-rate loans that are secured by two outlet malls and one regional mall – Great Lakes Crossing Outlets, Katy Mills and Deptford Mall – located in established suburban markets outside of Detroit, Houston and Philadelphia. Combined, the three senior pooled mortgage loans total $544 million and are not cross-collateralized or cross-defaulted. The three ten-year loans carry a weighted-average interest rate of 3.619% with Great Lakes Crossing Outlets and Deptford Mall amortizing on 30-year schedules while Katy Mills is IO for the entire loan term.

Each of the three loans is sponsored by a major mall operator (Taubman Centers, Macerich and Simon Property Group) with significant national relationships and financial resources. For malls, it is highly desirable to have an owner that owns many other malls, as they can leverage their relationships with tenants in order to bring certain tenants to the mall that otherwise would not locate there. With only three loans, the pool is concentrated by loan size. This lack of diversity exposes the pool to event risk, as losses incurred to any of the three senior trust loans would result in losses to investment-grade-rated bonds. The DBRS sizing hurdles, which were used to arrive at the ratings for the pool, contemplate stand-alone transactions with no diversity. DBRS gave minimal credit to the diversity afforded by pooling the three loans, which amounted to increasing the AAA LTV hurdle by 3.75%. As a result of the stable market positions, strong in-line sales performance, high-quality sponsorship and the low-leverage financing, Great Lakes Crossing Outlets and Katy Mills carry DBRS shadow ratings of A (low) and BBB (high), respectively, while DBRS considers the credit qualities associated with the senior pooled portion of the Deptford Mall loan to be BBB (low).

The ratings assigned to the Certificates by DBRS are based exclusively on the credit provided by the transaction structure and underlying trust assets. All classes will be subject to ongoing surveillance, which could result in upgrades or downgrades by DBRS after the date of issuance.

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

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

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

The applicable methodology is CMBS Rating Methodology (January 2012), which can be found on our website under Methodologies.