DBRS Upgrades Four Classes of J.P. Morgan Chase Commercial Mortgage Securities Trust 2012-C8

DBRS Limited (DBRS) has today upgraded four classes of J.P. Morgan Chase Commercial Mortgage Securities Trust 2012-C8, as follows:

-- Class B to AAA (sf) from AA (high) (sf)
-- Class C to AA (low) (sf) from A (high) (sf)
-- Class EC to AA (low) (sf) from A (high) (sf)
-- Class D to A (low) (sf) from BBB (high) (sf)

In addition, DBRS has confirmed the remaining classes in the transaction, as listed below:

-- Class A-2 at AAA (sf)
-- Class A-3 at AAA (sf)
-- Class A-S at AAA (sf)
-- Class A-SB at AAA (sf)
-- Class X-A at AAA (sf)
-- Class E at BBB (low) (sf)
-- Class F at BB (sf)
-- Class X-B at B (high) (sf)
-- Class G at B (sf)

Class EC is exchangeable with Class A-S, Class B and Class C (and vice versa).

All trends are Stable.

The rating upgrades reflect the continued strong performance of the transaction, which has experienced collateral reduction of 22.5% since issuance, with 38 of the original 43 loans remaining in the pool as of the June 2017 remittance report. There is one loan, representing 2.8% of the pool that is scheduled to mature in the next 12 months. This loan reported an in-place amortizing debt service coverage ratio (DSCR) of 1.56 times (x) at YE2016, with a DBRS Refi DSCR of 1.32x.

Based on the reported figures for YE2016, the transaction benefits from a healthy in-place WA DSCR of 1.90x and debt yield of 12.3%, as compared with the issuance levels for the pool of 1.60x and 10.1%, respectively. The performance for the largest 15 loans has also been strong since issuance, with WA net cash flow growth of 22.3% over the DBRS issuance figures and a WA DSCR of 1.90x, as based on the YE2016 reporting.

As of the June 2017 remittance report, there are five loans, representing 10.9% of the pool, including two in the Top 15, that are on the servicer’s watchlist and one loan, representing 1.6% of the pool, in special servicing. None of the watchlisted loans are being monitored for significant credit concerns and the 2017 appraisal for the loan in special servicing implies value in the underlying collateral that is relatively favourable as compared with the Trust’s exposure as of June 2017.

The ratings assigned to the Class E, F and G notes 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 given the undemonstrated sustainability of loan performance trends.

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 Multi-borrower Rating Methodology (March 2017) and CMBS North American Surveillance (March 2017), 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.