DBRS Assigns Provisional Ratings to MSBAM 2013-C9

DBRS has today assigned provisional ratings to the following classes of Commercial Mortgage Pass-Through Certificates, Series 2013-C9 (the Certificates), to be issued by the Morgan Stanley Bank of America Merrill Lynch Trust 2013-C9. The trends are Stable.

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class A-AB at AAA (sf)
-- Class A-3 at AAA (sf)
-- Class A-3FL at AAA (sf)
-- Class A-3FX at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class A-S at AAA (sf)
-- Class B at AA (sf)
-- Class PST at A (sf)
-- Class C at A (sf)
-- Class D at BBB (sf)
-- Class E at BBB (low) (sf)
-- Class F at BB (high) (sf)
-- Class G at BB (low) (sf)
-- Class H at B (low) (sf)
-- Class X-A at AAA (sf)
-- Class X-B at AAA (sf)

Classes A-3FL, A-3FX, X-B, D, E, F, G and H have been privately placed pursuant to Rule 144A.

The Class X-A and Class X-B balances are 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 Class PST certificates are exchangeable for the Class A-S, B and C certificates (and vice versa). Additionally, the Class A-3FL certificates are exchangeable for the Class A-3FX certificates.

The transaction has a balance of $1,276,905,883, with collateral consisting of 60 fixed-rate loans secured by 77 commercial properties. In total, 35.3% of the pool is secured by properties located in urban markets and correspondingly, the transaction’s tertiary and rural concentration is considered low at 16.3%. The pool is also notably concentrated by loan size, with the largest loan representing 12.9% of the pool, while the largest five and ten loans represent 44.5% and 57.0% of the pool, respectively. The pool has an overall concentration level similar to a pool of 19 equal-sized loans.

The pool has a more diversified mix of property types, with retail comprising 32.6% of the pool, comparatively less than in other 2011-2013 transactions. However, the transaction has a significant representation of loans secured by hotels (19.7% of the pool), including four of the largest 15 loans. Hotel properties have higher cash flow volatility than traditional property types as their income, which is derived from daily contracts rather than multi-year leases, and their expenses, which are often mostly fixed, are quite high as a percentage of revenue. The DBRS sample included 30 loans, representing 80.5% of the pool balance. The Issuer appears to have exercised prudent underwriting standards, with the DBRS underwriting only representing a weighted-average haircut of -4.1% for sampled loans. The pool’s concluded DBRS Term DSCR and DBRS Debt Yield are 1.65x and 9.1%, respectively.

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