DBRS Confirms All Classes of Wells Fargo Commercial Mortgage Trust 2015-NXS3

DBRS, Inc. (DBRS) confirmed all classes of Commercial Mortgage Pass-Through Certificates, Series 2015-NXS3 (the Certificates) issued by Wells Fargo Commercial Mortgage Trust 2015-NXS3 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-SB at AAA (sf)
-- Class A-S 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 D at BBB (low) (sf)
-- Class X-D at BBB (low) (sf)
-- Class X-E at BB (sf)
-- Class E at BB (low) (sf)
-- Class X-FG at B (high) (sf)
-- Class F at B (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction. At issuance, the collateral consisted of 56 loans secured by 59 properties with an issuance trust balance of $814.5 million. According to the August 2017 remittance, the pool has experienced a collateral reduction of 1.0% since issuance as a result of scheduled loan amortization, with all loans remaining in the pool. There are 40 loans, representing 91.2% of the current pool balance, that have reported YE2016 financials. These loans reported a weighted-average (WA) debt service coverage ratio (DSCR) and WA debt yield of 1.83 times (x) and 10.5%, respectively, compared with the DBRS WA Term DSCR and Debt Yield of 1.69x and 9.2%, respectively. Fourteen of the largest loans reported a WA DSCR and debt yield of 2.06x and 11.4%, respectively, reflecting a 16.9% WA improvement over the DBRS NCF figures derived at issuance.

As of the August 2017 remittance, there were eight loans, representing 6.6% of the pool balance, on the servicer’s watchlist. There are no loans in special servicing. For the most part, the loans on the servicer’s watchlist are being monitored for issues including late financial reporting, deferred maintenance and tenant rollover. DBRS did not find any significant concerns at this time with any of the loans on the watchlist.

At issuance, DBRS shadow-rated two loans, the 11 Madison Avenue loan (Prospectus ID#6, 4.3% of the pool balance) and the Parking Spot LAX loan (Prospectus ID#15, 1.9% of the pool balance), investment grade. DBRS has today confirmed that the performance of these two loans remains consistent with investment-grade characteristics.

DBRS has provided updated loan-level commentary and analysis for larger and/or pivotal watchlisted loans in the transaction, as well as the Top 15 loans, 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.

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.