DBRS Confirms All Classes of Wells Fargo Commercial Mortgage Trust 2016-C33

DBRS Limited (DBRS) has today confirmed all classes of Commercial Mortgage Pass-Through Certificates, Series 2016-C33 issued by Wells Fargo Commercial Mortgage Trust 2016-C33 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-SB at AAA (sf)
-- Class A-S at AAA (sf)
-- Class X-A at AAA (sf)
-- Class B at AA (low) (sf)
-- Class X-B at A (sf)
-- Class C at A (low) (sf)
-- Class D at BBB (low) (sf)
-- Class X-D at BBB (low) (sf)
-- Class X-E at BB (sf)
-- Class E at BB (low) (sf)
-- Class X-F at B (sf)
-- Class F at B (low) (sf)

All trends are Stable. DBRS does not rate the first loss piece, Class G.

The rating confirmations reflect the overall performance of the pool’s underlying collateral since issuance. The collateral consists of 79 fixed-rate loans secured by 112 multifamily properties. As of the March 2017 remittance, the transaction has experienced collateral reduction of 0.7% since issuance as a result of scheduled loan amortization, with an aggregate outstanding principal balance of $707.5 million. According to the most recent reporting (YE2016 or annualized quarterly 2016 financial reporting), the transaction had a weighted-average (WA) debt service coverage ratio (DSCR) and WA debt yield of 1.89 times (x) and 13.3%, respectively. In comparison, the WA DBRS Term DSCR and the WA DBRS debt yield at issuance were 1.65x and 9.8%, respectively. The largest 15 loans in the pool have experienced a WA positive cash flow growth since issuance of 17.1% over the DBRS issuance figures.

There are currently four loans on the servicer’s watchlist, representing 1.8% of the pool balance: Candlewood Suites Fredericksburg (Prospectus ID#40; 0.7% of the pool balance) has been flagged for a below threshold DSCR as of Q3 2016; two low-leverage loans backed by co-op properties have been flagged for failing to report updated financials; and the smallest loan was flagged for a drop in occupancy.

DBRS has provided updated loan-level commentary and analysis for the largest 15 loans in the pool, as well as the Candlewood Suites Fredericksburg loan, 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 E, X-E, F and X-F differ from the higher rating implied by the Large Pool Multi-borrower Parameters. DBRS considers this difference to be a material deviation from the methodology, and in this case, the rating reflects 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 principal methodologies are North American CMBS Rating Methodology (January 2017) and CMBS North American Surveillance (December 2016), which can be found on dbrs.com 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.