DBRS Confirms Ratings on Bear Stearns Commercial Mortgage Securities Trust 2007-PWR18

DBRS Limited (DBRS) has today confirmed the ratings on all classes of Commercial Mortgage Pass-Through Certificates, Series 2007-PWR18 issued by Bear Stearns Commercial Mortgage Securities Trust, Series 2007-PWR18 as follows:

-- Class A-1A at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class X-1 at AAA (sf)
-- Class A-M at AA (low) (sf)
-- Class AM-A at AA (low) (sf)
-- Class AJ-A at CCC (sf)
-- Class A-J at CCC (sf)
-- Class B at CCC (sf)
-- Class C at C (sf)
-- Class D at C (sf)

All trends are Stable, with the exception of Class AJ-A through Class D, which have ratings that do not carry trends.

The rating confirmations reflect the current performance of the transaction. As of the January 2017 remittance report, the transaction has experienced collateral reduction of 48.5% since issuance, from loan amortization, successful loan repayment, principal recovered from liquidated loans and realized losses from defaulted loans. Since January 2016, six loans have left the trust, reducing the collateral by 5.4%. There are currently 129 loans remaining in the pool out of the original 185 loans.

There are 14 loans, representing 10.8% of the current pool balance, including one in the Top 15, that are fully defeased. Throughout 2017, 128 loans, representing 99.7% of the pool, are scheduled to mature. Excluding defeasance collateral, these loans are reporting a weighted-average (WA) DBRS Refi debt service coverage ratio (DSCR) of 1.31 times (x), a WA DSCR of 1.25x and a WA exit debt yield of 10.1%, based on YE2015 reporting.

As of the January 2017 remittance report, there are 45 loans, representing 34.3% of the current pool balance, on the servicer’s watchlist. A large majority of these loans are on the watchlist solely for upcoming maturities. In addition, there are no loans in special servicing, but there is one loan, representing 0.6% of the pool, that is 30 days delinquent. This loan reported YE2015 DSCR of 0.99x.

DBRS has removed the investment-grade shadow ratings on two loans in the pool, Aviata Apartments (Prospectus ID #17; 2.1% of the current pool balance) and Westridge Square Shopping Center (Prospectus ID #33; 1.7% of current pool balance), due to a lack of 2016 financial reporting.

The ratings assigned to Classes A-M through Class A-J materially deviate from the higher ratings implied by the Large Pool Multi-borrower Parameters. DBRS considers this to be a methodology deviation when there is a rating differential of three or more notches between the assigned rating and the rating implied by the Large Pool Multi-borrower Parameters; in this case, the assigned ratings reflect the uncertain loan-level event risk given the upcoming maturities.

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 (January 2017) 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.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.