DBRS Confirms Ratings on Wells Fargo Commercial Mortgage Trust 2014-LC18

DBRS Limited (DBRS) has today confirmed the ratings on the following classes of Commercial Mortgage Pass-Through Certificates, Series 2014-LC18, issued by Wells Fargo Commercial Mortgage Trust 2014-LC18 as follows:

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class A-3 at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class A-5 at AAA (sf)
-- Class A-SB at AAA (sf)
-- Class A-S at AAA (sf)
-- Class X-A at AAA (sf)
-- Class X-B at AAA (sf)
-- Class X-E at AAA (sf)
-- Class X-F at AAA (sf)
-- Class X-G at AAA (sf)
-- Class B at AA (low) (sf)
-- Class C at A (low) (sf)
-- Class PEX at A (low) (sf)
-- Class D at BBB (low) (sf)
-- Class E at BB (low) (sf)
-- Class F at B (low) (sf)

All trends are Stable. The Class PEX certificates are exchangeable with Class A-S, Class B and Class C certificates (and vice versa). Classes X-E, X-F, X-G, D, E, F and G have been privately placed pursuant to Rule 144A.

The rating confirmations reflect the overall stable performance of the transaction, which has remained in line with DBRS’s expectations since issuance in December 2014. The collateral consists of 99 loans secured by 117 properties and as of the November 2016 remittance, there has been a collateral reduction of 1.6% since issuance as a result of scheduled amortization. All of the original loans remain in the pool. The weighted-average (WA) net cash flow growth for the top 15 loans reporting YE2015 figures was 19.0% over the DBRS UW figures, with a WA DSCR of 2.02 times (x), as compared to the WA DBRS UW DSCR of 1.70x.

As of the November 2016 remittance report, there are no loans in special servicing and seven loans, representing 3.1% of the pool, on the servicer’s watchlist. Five of those loans, representing 1.9% of the pool, are on the watchlist for deferred maintenance; however, none of the issues noted appear to suggest a material impact on the overall condition of the property or operations in general. The remainder of loans, representing 1.2% of the pool, are on the watchlist for reporting a low trailing 12 months June 2016 DSCR, or for upcoming tenant rollover. DBRS has requested information from the servicer regarding the status of these loans and will monitor closely for developments.

DBRS has provided updated loan level commentary and analysis for larger and/or pivotal watchlisted loans, as well as for the largest 15 loans in the pool, in the DBRS CMBS IReports platform. To view these and future loan level updates provided as part of DBRS’s ongoing surveillance for this transaction, please log into DBRS CMBS IReports at www.ireports.dbrs.com.

The ratings assigned to Classes B, C, E, F and PEX materially deviate from the higher ratings implied by the quantitative results. DBRS considers a material deviation to be a rating differential of three or more notches between the assigned rating and the rating implied by the quantitative results that is a substantial component of a rating methodology. The deviations are warranted due to the sustainability of loan performance trends not demonstrated.

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

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are 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.

The applicable methodologies are North American CMBS Rating Methodology (March 2016) and CMBS North American Surveillance (December 2016), which can be found on our website under Methodologies.

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