DBRS Confirms All Classes of CSAIL 2016-C7 Commercial Mortgage Trust

DBRS, Inc. (DBRS) confirmed the ratings on the following classes of Commercial Mortgage Pass-Through Certificates, Series 2016-C7 issued by CSAIL 2016-C7 Commercial Mortgage Trust:

-- 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 B at AAA (sf)
-- Class X-A at AAA (sf)
-- Class X-B at AAA (sf)
-- Class C at AA (low) (sf)
-- Class D at BBB (high) (sf)
-- Class X-E at BBB (low) (sf)
-- Class E at BB (high) (sf)
-- Class X-F at BB (sf)
-- Class F at BB (low) (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction, which has remained generally in line with DBRS’s expectations since issuance. The collateral consists of 53 loans secured by 199 properties, and as of the October 2017 remittance, there has been a collateral reduction of 0.8% since issuance due to scheduled loan amortization. The weighted-average (WA) DBRS Term Debt-Service Coverage Ratio (DSCR) and WA DBRS Debt Yield for the pool at issuance were 1.54x and 8.7%, respectively. The largest 15 loans in the pool collectively represent 64.4% of the transaction balance, and based on the most recent financial reporting available, those loans have exhibited a WA net cash flow growth of 16.8% over the DBRS issuance figures with a WA DSCR and debt yield of 2.08x and 8.5%, respectively.

There is one loan in special servicing and five loans on the servicer’s watchlist, which represent 0.78% and 3.3% of the current pool balance, respectively; however, two watchlisted loans are flagged for outstanding deferred maintenance items while the remaining watchlisted loans are being monitored for either cash flow declines or tenant rollover risk. The loan in special servicing was transferred after the hotel franchisor issued a default letter to the borrower for missed franchise payments; however, the default letter has since been rescinded as the borrower is working with the special servicer and the franchisor to improve property performance and to correct the payments in arrears.

Classes X-A, X-B, X-E and X-F are interest-only (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 and specially serviced loans in the transaction, as well as the Top 15 loans, 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 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.

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