DBRS Confirms All Classes of WFRBS Commercial Mortgage Trust 2014-C21

DBRS Limited (DBRS) confirmed the ratings on the Commercial Mortgage Pass-Through Certificates, Series 2014-C21 issued by WFRBS Commercial Mortgage Trust 2014-C21 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-5 at AAA (sf)
-- Class A-S at AAA (sf)
-- Class A-SB at AAA (sf)
-- Class A-SBFL at AAA (sf)
-- Class A-SBFX at AAA (sf)
-- Class X-A at AAA (sf)
-- Class B at AA (low) (sf)
-- Class C at A (low) (sf)
-- Class PEX at A (low) (sf)
-- Class X-B at BBB (sf)
-- Class D at BBB (low) (sf)
-- Class X-C at BB (high) (sf)
-- Class E at BB (sf)
-- Class X-D at B (high) (sf)
-- Class F at B (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction since issuance. The collateral consists of 122 fixed-rate loans secured by 146 commercial and multifamily properties. As of the July 2017 remittance, there has been a collateral reduction of 2.5% as a result of scheduled loan amortization, with all loans remaining in the pool and a current trust balance of $1,387.3 million. Loans representing 83.5% of the current pool balance reported YE2016 cash flow figures. The portfolio reported a weighted-average (WA) debt service coverage ratio (DSCR) and WA debt yield of 1.80 times (x) and 10.5%, respectively, compared with the DBRS WA DSCR and WA debt yield of 1.66x and 9.6%, respectively, at issuance. The largest 15 loans in the pool reported a WA DSCR and debt yield of 1.73x and 9.5%, respectively, reflective of a WA net cash flow growth of 6.8% over the DBRS issuance figures.

As of the July 2017 remittance, there were 24 loans, representing 21.9% of the current pool balance, on the servicer’s watchlist. The watchlist is concentrated in the top 15, with five loans representing 16.2% of the watchlist. Three of these loans in the top 15 are performing and being monitored for non-performance-related issues. Two loans, representing 1.7% of the pool balance, are currently in special servicing. The larger of those two loans, Prospectus ID #19, Best Western Premier Hotel Napa (1.3% of the pool) is in special servicing because the borrower terminated the franchise agreement with Best Western and has been operating the hotel as an independent hotel without servicer consent.

The ratings assigned to Class C and the exchangeable Class PEX 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 because the sustainability of loan performance trends was not demonstrated.

DBRS has provided updated loan-level commentary and analysis for the specially serviced loans, 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 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 methodology is 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.