DBRS Confirms Ratings on Wells Fargo Commercial Mortgage Trust 2016-C34

DBRS Limited (DBRS) has today confirmed the ratings on the following classes of Commercial Mortgage Pass-Through Certificates, Series 2016-C34 (the Certificates) issued by Wells Fargo Commercial Mortgage Trust 2016-C34.

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

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction, which has remained in line with DBRS’s expectations since issuance. The transaction consists of 68 fixed-rate loans secured by 92 commercial properties. As of the April 2017 remittance report, the trust balance was $698.8 million, representing collateral reduction of 0.6% from issuance as a result of scheduled amortization with all of the original loans remaining in the pool. As of the April 2017 remittance report, loans representing 69.5% of the pool are reporting YE2016 figures and loans representing 14.6% of the pool are reporting annualized Q3 2016 figures. Based on the most recent reporting for the underlying loans, the pool has a weighted-average (WA) debt service coverage ratio (DSCR) of 1.48 times (x), with a WA debt yield of 9.4%. These figures compare with the DBRS WA DSCR and DBRS WA debt yield at issuance of 1.35x and 8.5%, respectively.

As of the April 2017 remittance report, there are no loans in special servicing and there are five loans, representing 5.4% of the pool, including one in the top ten, on the servicer’s watchlist. Only one of these loans, Prospectus ID#8, Nolitan Hotel, representing 3.4% of the pool, is on the servicer’s watchlist for a performance decline since issuance, with the loan reporting a low YE2016 net cash flow figure.

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. Registration is free. To view these and future loan-level updates provided as part of DBRS’s ongoing surveillance for this transaction, please register or log into 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.

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

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.

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