DBRS Confirms All Classes of Citigroup Commercial Mortgage Trust 2016-C2

DBRS Limited (DBRS) confirmed the ratings on the Commercial Mortgage Pass-Through Certificates, Series 2016-C2 issued by Citigroup Commercial Mortgage Trust 2016-C2 (CGCMT 2016-C2) 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-AB at AAA (sf)
-- Class A-S at AAA (sf)
-- Class X-A at AAA (sf)
-- Class B at AA (sf)
-- Class X-B at A (high) (sf)
-- Class C at A (sf)
-- Class D at BBB (sf)
-- Class X-D at BBB (sf)
-- Class E-1 at BB (high) (sf)
-- Class E at BB (sf)
-- Class E-2 at BB (sf)
-- Class F-1 at BB (low) (sf)
-- Class EF at B (high) (sf)
-- Class F at B (high) (sf)
-- Class F-2 at B (high) (sf)
-- Class G-1 at B (sf)
-- Class EFG at B (low) (sf)
-- Class G at B (low) (sf)
-- Class G-2 at B (low) (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction. The collateral consists of 44 fixed-rate loans secured by 53 commercial properties. As of the August 2017 remittance, there has been a collateral reduction of 0.5% as a result of scheduled loan amortization. Eleven loans, representing 32.3% of the pool, including four of the largest ten loans, are structured with full-term interest-only (IO) payments. An additional 11 loans, representing 34.9% of the pool, have partial IO periods ranging from 12 to 60 months. As of the August 2017 remittance, thirty-eight loans, representing 81.6% of the current pool balance, reported YE2016 cash flow figures. These loans reported a weighted-average (WA) debt service coverage ratio (DSCR) and WA debt yield of 2.35 times (x) and 11.1%, respectively, compared with the DBRS WA Term DSCR and WA debt yield for the whole transaction of 1.72x and 9.3%, respectively, at issuance. The largest 15 loans in the pool reported a WA DSCR and debt yield of 2.05x and 9.1%, respectively.

As of the August 2017 remittance, there are no loans on the servicer’s watchlist.

At issuance, DBRS shadow-rated the Vertex Pharmaceuticals HQ loan (Prospectus ID#1, 9.9% of the pool balance) as investment grade. DBRS has today confirmed that the performance of this loan remains consistent with investment-grade characteristics.

DBRS has provided updated loan-level commentary and analysis 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.

The principal methodology is CMBS North American Surveillance, which can be found on dbrs.com under Methodologies.

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

The rated entity or its related entities did participate in the rating process. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities.

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