DBRS Assigns Provisional Ratings to Real Estate Asset Liquidity Trust, Series 2014-1

DBRS has today assigned provisional ratings to the following classes of Commercial Mortgage Pass-Through Certificates, Series 2014-1 issued by Real Estate Asset Liquidity Trust, Series 2014-1.

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

The Class X 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 certificates’ position within the transaction payment waterfall when determining the appropriate rating.

The collateral for the transaction consists of 34 fixed-rate loans secured by 46 properties. One loan, Sheraton Cavalier Hotel Calgary, representing 5.7% of the pool, was shadow rated investment grade. All 34 loans in the transaction amortize for the entire term, with 49.9% of the pool by loan balance having approximately 25 years to 30 years of remaining amortization, and the remainder having less than 25 years of remaining amortization. For 22 loans (67.3% of the pool by loan balance) that offer recourse to the respective sponsor, DBRS reduced the corresponding probability of default. DBRS did not identify any loans as having a DBRS Term Debt Service Coverage Ratio (DSCR) below 1.15 times (x), indicating a lower likelihood of mid-term default. However, 48.1% of the pool, based on both the A-note and whole loan balloon balances, have DBRS Refinance DSCRs below 1.00x. The DBRS weighted-average Term DSCR and Debt Yield, excluding the shadow-rated loan, based on the A-note balances, are 1.36x and 8.42%, respectively, while based on the whole loan balances, are 1.33x and 8.24%, respectively. The DBRS weighted-average Exit Debt Yield, excluding the shadow-rated loan, based on the A-note balances and the whole loan balances are 10.05% and 9.97%, respectively.

DBRS sampled 26 loans, representing 90.3% of the pool by loan balance, and site inspections were performed on 36 properties, representing 82.9% of the pool by loan allocated balance. Of the sampled loans, three loans were given an Above Average property quality rating.

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

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.