DBRS Confirms Ratings on Morgan Stanley Bank of America Merrill Lynch Trust 2013-C7

DBRS Limited (DBRS) has today confirmed the ratings on all classes of Commercial Mortgage Pass-Through Certificates, Series 2013-C7 issued by Morgan Stanley Bank of America Merrill Lynch Trust 2013-C7 as follows:

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

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

The rating confirmations reflect the overall stable performance of the transaction. At issuance, this transaction consisted of 64 loans secured by 123 properties for a total trust balance of approximately $1.40 billion. As at the December 2016 remittance report, the trust balance was $1.25 billion, representing collateral reduction of 9.8% from scheduled amortization and loan repayment, as 59 of the original 64 loans remain in the pool. In the past year, four loans, representing 2.5% of the pool at issuance, have been repaid in full ahead of their respective scheduled maturity dates.

Loans representing 98.1% of the current pool balance are reporting YE2015 figures with a weighted-average (WA) debt service coverage ratio (DSCR) and a WA debt yield of 1.8 times (x) and 11.0%, respectively. The WA net cash flow growth for the top 15 loans reporting YE2015 figures was 6.2% over the DBRS UW figures, with a WA DSCR of 1.90x, as compared with the WA DBRS UW DSCR of 1.77x. In addition, the WA occupancy for the largest 15 loans in the pool is healthy at 89.8%.

As at the December 2016 remittance report, there are four loans, representing 7.2% of the pool, on the servicer’s watchlist, and one loan, representing 1.3% of the pool, in special servicing. Three of the four loans on the watchlist report healthy DSCR figures and are being monitored for minor deferred maintenance issues or low occupancy rates; however, occupancy has since increased. The remaining loan on the watchlist is being monitored for reporting a low annualized Q1 2016 DSCR.

DBRS maintains an investment-grade shadow rating on two loans in the pool, Valley West Mall (Prospectus ID #7; 3.7% of the current pool balance) and Sunvalley Shopping Center (Prospectus ID #17; 1.8% of the current pool balance). DBRS has today confirmed that the performance of these loans remains consistent with investment-grade loan characteristics.

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 in to DBRS CMBS IReports at www.ireports.dbrs.com.

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.