DBRS Confirms Ratings of WFRBS Commercial Mortgage Trust 2014-C25

DBRS Limited (DBRS) confirmed the ratings for all classes of Commercial Mortgage Pass-Through Certificates, Series 2014-C25 issued by WFRBS Commercial Mortgage Trust 2014-C25 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-5 at AAA (sf)
-- Class A-S at AAA (sf)
-- Class A-SB 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 X-B at BBB (sf)
-- Class D at BBB (low) (sf)
-- Class X-C at BB (high) (sf)
-- Class E at BB (sf)
-- Class X-D at B (high) (sf)
-- Class F at B (sf)

All trends are Stable. Up to the full certificate balance of the Class A-S, Class B and Class C certificates may be exchanged for the Class PEX certificates and vice versa.

The rating confirmations reflect the overall stable performance of the transaction. At issuance, the collateral consisted of 59 loans secured by 73 properties, with a trust balance of $875.7 million. As of the November 2017 remittance, there has been collateral reduction of 1.4% since issuance as a result of scheduled loan amortization. In addition, two loans representing 1.8% of the pool have been fully defeased. As of the year-end 2016 financials, the pool reported a weighted-average (WA) debt service coverage ratio (DSCR) and debt yield of 1.87 times (x) and 8.83%, respectively, with loans representing 96.1% of the pool reporting. At issuance, the WA DBRS Term DSCR and WA DBRS Debt Yield for those loans were 1.61x and 9.0%, respectively.

As of the November 2017 remittance, there were six loans representing 15.8% of the pool balance on the servicer’s watchlist. The largest loan on the watchlist is Prospectus ID #2, Colorado Mills (11.6% of the pool). That loan is secured by an outlet mall in Lakewood, Colorado, and is being monitored for significant damage to the property as a result of a hail storm that impacted the area in May 2017. The remaining loans on the watchlist are relatively small and/or are being monitored for non-performance related issues. There is one loan in special servicing, Prospectus ID #20, Elsinore Courtyard Apartments (1.4% of the pool). This loan was transferred to the special servicer after the sponsor was cited for numerous code violations at the property. In-depth analysis and extended commentary for the specially-serviced loan and noteworthy watchlist loans are available on the DBRS Viewpoint platform.

At issuance, DBRS shadow-rated one loan, Prospectus ID #1, St. Johns Town Center (11.6% of the pool balance) as investment grade, supported by the loan’s strong credit metrics, strong sponsorship strength and continued stable collateral performance. With this review, DBRS confirms that the characteristics of this loan remain consistent with the investment-grade shadow rating.

Classes X-A, X-B, X-C and X-D 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 the specially serviced loan 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.

The ratings assigned to Classes C, E and PEX 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 as the sustainability of loan performance trends have not yet been demonstrated.

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 in the rating process for this rating action. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

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