DBRS Confirms All Classes of Morgan Stanley Bank of America Merrill Lynch Trust 2014-C18

DBRS Limited (DBRS) confirmed the ratings on the following classes of Commercial Mortgage Pass-Through Certificates, Series 2014-C18 issued by Morgan Stanley Bank of America Merrill Lynch Trust 2014-C18 (the Trust) 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-S at AAA (sf)
-- Class A-SB at AAA (sf)
-- Class X-A at AAA (sf)
-- Class X-B at BBB (sf)
-- Class X-C at B (sf)
-- Class B at AA (sf)
-- Class C at A (low) (sf)
-- Class PST at A (low) (sf)
-- Class D at BBB (low) (sf)
-- Class E at BB (low) (sf)
-- Class F at B (low) (sf)

DBRS does not rate Class G, the first-loss piece. The Class A-S, Class B, and Class C certificates may be exchanged for the Class PST certificates (and vice versa). All trends are Stable.

The rating confirmations reflect the pool’s overall stable performance. Since issuance, the pool has experienced collateral reduction of 2.6% as a result of scheduled amortization and the full repayment of one loan. There are 64 loans remaining of the original 65 loans in the pool at issuance. Based on the servicer’s analysis for the 96.8% of the pool that reported YE2016 figures, the transaction reported a weighted-average (WA) debt service coverage ratio (DSCR) of 1.75 times (x) and a WA debt yield of 10.1%. This compares with the YE2015 WA DSCR and debt yield of 1.75x and 10.0%, respectively. The largest 15 loans in the pool represent 65.6% of the current pool balance and reported a WA net cash flow growth of 15.7% over the DBRS issuance figures, with a WA DSCR of 1.72x and WA debt yield of 8.9%.

As of the July 2017 remittance, there was one loan in special servicing, representing 1.7% of the current pool balance, and six loans on the servicer’s watchlist, representing 5.0% of the current pool balance. The loan in special servicing, Prospectus ID #14, Value Place Williston (1.7% of the pool) is secured by a limited-service hotel located in Williston, North Dakota. The loan transferred to special servicing in October 2015 for payment default. The loans on the servicer’s watchlist reported WA DSCR of 1.42x and a WA debt yield of 9.4%.

At issuance, DBRS shadow-rated Prospectus ID#2 300 North LaSalle, representing 9.9% of the current pool balance, as investment grade. DBRS has today confirmed that the performance of this loan remains consistent with investment-grade loan characteristics.

The ratings assigned to Classes C and PST 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 sustainability of loan performance trends not yet demonstrated.

DBRS has provided updated loan-level commentary and analysis for larger and/or pivotal watchlisted loans and specially serviced loans in the transaction, as well as the Top 15 loans, in the DBRS commercial mortgage-backed securities (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 methodology is CMBS North American Surveillance (March 2017), which can be found on www.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.