DBRS Confirms All Classes of A10 Securitization 2013-1, LLC

DBRS has today confirmed the following classes of Fixed Rate Notes issued by A10 Securitization 2013-1, LLC (the Trust). The trends are Stable.

-- Class A at AAA (sf)
-- Class B at A (sf)
-- Class C at BBB (sf)
-- Class D at BBB (low) (sf)
-- Class E at BB (sf)
-- Class F at B (sf)

The ratings are consistent with the continued performance of the pool since it originally closed in April 2013. Seven loans have repaid from the Trust since issuance, contributing to a collateral reduction of 26.7% to date. The current pool consists of 14 loans secured by traditional commercial real estate assets, including office, multifamily, retail and industrial properties. The loans benefit from low leverage on a per unit basis, and the weighted-average debt yield based on the most recent NOI and outstanding Trust balance is approximately 10.3%, which is relatively strong given the pool consists of stabilizing assets.

All of the collateral loans were originated by A10 Capital, LLC (A10). A10 specializes in mini-perm loans, which typically have two- to five-year terms and are used to finance properties until they are fully stabilized. The borrowers are typically new equity sponsors of fairly well-positioned assets within their respective markets. A10’s initial advance is the senior debt component typically for the purchase of a real estate-owned acquisition or discounted payoff loans. Most loans are structured with three-year terms and include built-in extensions and future funding facilities meant to aid in property stabilization, both of which are at the lender’s sole discretion. According to the most recent reporting, a majority of the collateral assets in the subject pool have not yet reached stabilization.

The transaction is concentrated, as the largest loan represents 24.6% of the current pool balance based on the fully funded loan amount, and the largest five loans represent 69.8% of the current pool balance based on their fully funded loan amounts. None of the loans in the pool have initial maturity dates prior to April 1, 2015, and one loan, representing 3.9% of the current pool balance, has completely drawn down its future funding facility.

The ratings assigned by DBRS contemplate timely payments of distributable interest and, in the case of the Offered Notes other than the Class A Notes, ultimate recovery of Deferred Collateralized Note Interest Amounts (inclusive of interest payable thereon at the applicable rate, to the extent permitted by law). The transaction is a standard sequential pay waterfall.

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 methodologies are CMBS Rating Methodology and Commercial Real Estate Non-Performing Loan Liquidating Trusts, which can be found on our website under Methodologies.