DBRS Confirms Ratings of Morgan Stanley Bank of America Merrill Lynch Trust 2014-C15

DBRS Limited (DBRS) has today confirmed all classes of Morgan Stanley Bank of America Merrill Lynch Trust 2014-C15 as follows:

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

All trends are Stable. DBRS does not rate the first loss piece, Class J. The Class A-S, Class B and Class C certificates may be exchanged for the Class PST certificates (and vice versa).

The rating confirmations reflect that the current performance of the transaction remains in line with DBRS expectations at issuance in March 2014. The collateral consists of 48 loans secured by 76 properties. As of the February 2015 remittance report, the pool has a balance of $1,073.4 million, representing a collateral reduction of 0.6% since issuance as a result of scheduled loan amortization. The transaction benefits from loans secured by properties within urban markets representing 36.6% of the pool. The transaction is concentrated by loan size, with the largest loan and largest ten loans representing 13.9% and 67.7% of the current pool balance, respectively. Additionally, four loans, representing 22.5% of the current pool balance, are secured by hotel properties. All loans secured by hotel properties are among the largest 15 loans, including one that is shadow-rated by DBRS.

Including the aforementioned loan, at issuance, DBRS shadow-rated Arundel Mills & Marketplace at BBB (low) and JW Marriott and Fairfield Inn & Suites at BBB, representing 18.5% of the current pool balance, as investment grade. DBRS has today confirmed that the performance of these loans remains consistent with investment-grade loan characteristics.

As of the February 2015 remittance report, there are two loans on the servicer’s watchlist, representing 2.1% of the current pool balance. The largest loan on the watchlist is Woodland Glen Apartments, representing 1.7% of the current pool balance. This loan was placed on the watchlist because of a temporary drop in performance when comparing the Q3 2014 debt service coverage ratio (DSCR) of 1.08 times (x) with the prior quarter DSCR of 1.71x. The property is undergoing renovations for upgrades, resulting in increased total expenses; however, operating expenses remained in line with expectations. DBRS expects performance to increase once these renovations are complete.

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 February 2015 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.

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

The applicable methodologies are CMBS Rating Methodology (January 2012) and CMBS North American CMBS Surveillance (January 2015), which can be found on our website under Methodologies.