DBRS Assigns Provisional Ratings to COMM 2015-PC1 Mortgage Trust

DBRS, Inc. (DBRS) has today assigned provisional ratings to the following classes of Commercial Mortgage Pass-Through Certificates, Series 2015-PC1 (the Certificates), to be issued by COMM 2015-PC1 Mortgage Trust. The trends are Stable.

-- 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 A-5 at AAA (sf)
-- Class X-A at AAA (sf)
-- Class X-B at AAA (sf)
-- Class X-C at AAA (sf)
-- Class X-D at AAA (sf)
-- Class X-E at AAA (sf)
-- Class X-F at AAA (sf)
-- Class A-M 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 (low) (sf)
-- Class F at B (low) (sf)

Classes X-B, X-C, X-D, X-E, X-F, E, F and G will be privately placed.

The X-A, X-B, X-C, X-D, X-E and X-F balances are notional. DBRS ratings on interest-only (IO) certificates address the likelihood of receiving interest based on the notional amount outstanding. DBRS considers the IO certificate’s position within the transaction payment waterfall when determining the appropriate rating.

The collateral consists of 80 fixed-rate loans secured by 147 commercial and multifamily properties, with a transaction balance of $1,462,938,586. The pool exhibits a DBRS weighted-average term debt service coverage ratio (DSCR) and debt yield of 1.51 times (x) and 8.6%, respectively, based on the whole loan balances. The DBRS sample included 36 loans, representing 69.9% of the pool. Of the sampled loans, five loans, comprising 20.6% of the pool, were given Above Average property quality. Higher-quality properties are more likely to retain existing tenants/guests and more easily attract new tenants/guests, resulting in more stable performance. In total, properties representing 19.3% of the pool are located in urban markets with increased liquidity, a concentration that is relatively in line with other recent transactions rated by DBRS. Overall, the pool is relatively diverse based on loan size, with a concentration profile equivalent to that of a pool of 36 equal-sized loans. Increased pool diversity helps to insulate the higher-rated classes from event risk.

The transaction has a high concentration of full-term and partial-IO loans, representing 73.8% of the total pool. However, the pool will amortize down by 12.1% during the life of the transaction, which is generally in line with recent conduits rated by DBRS. Additionally, 35 loans, representing 55.7% of the pool, have Refi DSCRs below 1.00x. Eighteen of these loans, representing 33.6% of the pool, have DBRS Refi DSCRs of less than 0.90x. While such metrics indicate elevated refinance risk, the DBRS Refi DSCRs are based on a weighted-average stressed refinance constant of 9.81%, which implies an interest rate of 9.25%, amortizing on a 30-year schedule. This represents a significant stress of 4.8% over the weighted-average contractual interest rate of the loans in the pool. Additionally, 93.7% of the loans with low DBRS Refi DSCRs are located in urban or suburban markets.

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 North American CMBS Rating Methodology, which can be found on our website under Methodologies.

With regard to due diligence services, DBRS was provided with the Form ABS Due Diligence-15E (Form-15E) which contains the description of the information that the third party reviewed in conducting the due diligence services and a summary of the findings and conclusions. While DBRS did not require due diligence services outlined in Form-15E, DBRS did use the Data File outlined in the Independent Accountant’s Report in its analysis to determine the ratings.