DBRS Confirms All Classes of WFRBS Commercial Mortgage Securities Trust 2012-C10

DBRS has today confirmed all classes of WFRBS Commercial Mortgage Securities Trust 2012-C10 as follows:

-- Classes A-1, A-2, A-FL, A-FX, A-3, A-SB, A-S, X-A and X-B at AAA (sf)
-- Class B at AA (low) (sf)
-- Class C at A (low) (sf)
-- Class D at BBB (low) (sf)
-- Class E at BB (sf)
-- Class F at B (sf)

The trends on all classes are Stable.

The pool consists of 85 loans, secured by 115 multifamily and commercial properties. As of the December 2013 remittance report, the pool has a balance of approximately $1.3 billion, representing a collateral reduction of 1.2% since issuance as a result of amortization. Overall, the loans in the pool have reported stable performance since issuance. The transaction also benefits from thirty loans structured on amortization schedules of 27 years or less. Additionally, the pool is expected to amortize down 16.6% by maturity.

As of the December 2013 remittance report, there are two loans on the servicer’s watchlist representing 1.5% of the current pool balance. The two loans were placed on the watchlist for a decline in performance; however, both loans have the capability to support their respective debt coverage. The two loans have a weighted-average debt service coverage ratio (DSCR) and debt yield of 1.25 times (x) and 12.3%.

The DBRS analysis included an in-depth review of the 15 largest loans in the transaction and the loans on the servicer’s watchlist, which represents 58.5% of the current pool balance. According to the most recent reporting, the fifteen largest loans have a weighted-average DSCR of 2.26x and a weighted-average debt yield of 15.5%. The majority of the loans are reporting partial-year figures, which are annualized by the servicer for the purposes of calculating the updated DSCR; however, DBRS does not consider the financials to be a true representation of performance due to seasonality and are less reliable indicators than full-year financials. The year-end 2013 financial figures are expected to more accurately display loan performance and will be available in the coming year. DBRS reverted to its underwritten net cash flow from issuance for the purposes of modeling the transaction in order to mitigate the variances exhibited by partial year financials.

DBRS continues to monitor this transaction in its Monthly CMBS Surveillance Report, with additional information on the DBRS viewpoint for this transaction including details on the largest loans in the pool. The December 2013 Monthly Surveillance Report for this transaction will be published shortly. If you are interested in receiving this report, contact us at info@dbrs.com .

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

The applicable methodologies are CMBS Rating Methodology (January 2012) and CMBS North American Surveillance Methodology (November 2012), which can be found on our website under Methodologies.

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