DBRS Confirms Ratings on JPMBB Commercial Mortgage Securities Trust 2014-C26

DBRS Limited (DBRS) confirmed the Commercial Mortgage Pass-Through Certificates, Series 2014-C26 (the Certificates), issued by JPMBB Commercial Mortgage Securities Trust 2014-C26 (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-SB at AAA (sf)
-- Class A-S at AAA (sf)
-- Class X-A at AAA (sf)
-- Class X-B at AA (high) (sf)
-- Class B at AA (sf)
-- Class X-C at AA (low) (sf)
-- Class C at A (high) (sf)
-- Class EC at A (high) (sf)
-- Class X-D at BBB (sf)
-- Class D at BBB (low) (sf)
-- Class X-E at BB (high) (sf)
-- Class E at BB (sf)
-- Class X-F at B (high) (sf)
-- Class F at B (sf)

The rating confirmations reflect the overall stable performance of the transaction. At issuance, the collateral consisted of 69 fixed-rate loans secured by 93 commercial properties. As of the October 2017 remittance, 68 loans remained in the pool with an aggregate principal balance of $1.41 billion, representing a collateral reduction of 2.4% since issuance as a result of the unscheduled repayment of one loan and scheduled loan amortization. There are currently 14 loans (27.9% of the pool) with remaining interest-only (IO) periods, ranging from one to 26 months, while five loans (12.2% of the pool) are structured with full IO terms. One loan (1.3% of the pool) is secured by collateral that has been fully defeased. To date, 42 loans (76.3% of the pool) have reported partial-year 2017 financials, while 65 loans (98.3% of the pool) have reported YE2016 financials. Based on the most recent year-end financial reporting, the transaction had a weighted-average (WA) debt service coverage ratio (DSCR) and WA Debt Yield of 1.75x and 10.0%, respectively, compared with the DBRS WA Term DSCR and WA Debt Yield of 1.49x and 8.4%, respectively.

The pool is concentrated by property type, as 22 loans, representing 46.6% of the pool, are secured by office properties, while 11 loans (16.4% of the pool) are secured by hotel properties. By loan size, the pool is relatively diverse, as the top 15 loans only represent 51.2% of the pool. Based on the most recent cash flows available, the top 15 loans reported a WA DSCR of 1.97x, compared with the WA DBRS Term DSCR of 1.50x, reflective of 34.3% net cash flow growth over the DBRS issuance figures.

As of the October 2017 remittance, there are five loans (3.3% of the pool) on the servicer watchlist. The largest four loans (3.1% of the pool) were flagged due to performance-related reasons, while the smallest loan (0.2% of the pool) was flagged due to what appears to be an unresponsive borrower.

Classes X-A, X-B, X-C, X-D, X-E and XF are IO certificates that reference a single rated tranche or multiple rated tranches. The IO rating mirrors the lowest-rated reference tranche adjusted upward by one notch if senior in the waterfall.

All ratings will be subject to ongoing surveillance, which could result in ratings being upgraded, downgraded, placed under review, confirmed or discontinued by DBRS.

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 where updated performance information from issuance was available, in the DBRS Viewpoint 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 Viewpoint at viewpoint.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. For a list of the Structured Finance related methodologies that may be used during the rating process, please see the DBRS Global Structured Finance Related Methodologies document on www.dbrs.com. Please note that not every related methodology listed under a principal Structured Finance asset class methodology may be used to rate or monitor an individual structured finance or debt obligation.

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

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