DBRS Upgrades Two Classes of COMM 2013-CCRE6 Mortgage Trust

DBRS Limited (DBRS) upgraded the ratings on the following classes of the Commercial Mortgage Pass-Through Certificates, Series 2013-CCRE6 issued by COMM 2013-CCRE6 Mortgage Trust:

-- Class D to BBB (sf) from BBB (low) (sf)
-- Class E to BB (high) (sf) from BB (sf)

DBRS also confirmed the ratings on the following classes:

-- Class A-2 at AAA (sf)
-- Class A-SB at AAA (sf)
-- Class A-3FL at AAA (sf)
-- Class A-3FX at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class A-M at AAA (sf)
-- Class X-A at AAA (sf)
-- Class B at AA (high) (sf)
-- Class X-B at AA (low) (sf)
-- Class C at A (high) (sf)
-- Class PEZ at A (high) (sf)
-- Class F at B (sf)

All trends are Stable, including Class D, which previously had a Positive trend.

The rating actions reflect the overall stable performance of the transaction and the increased credit support to the bonds as a result of the successful repayment of Class A-1 and significant paydown of Class A-2. At issuance, the pool consisted of 48 loans secured by 80 commercial and multifamily properties. As of the December 2017 remittance, there has been a collateral reduction of 25.3% as a result of scheduled loan amortization and the successful repayment of six loans within the pool. There are 41 loans, representing 99.3% of the pool balance, reporting YE2016 net cash flow; these loans reported a weighted-average (WA) debt service coverage ratio (DSCR) and WA debt yield of 2.36 times (x) and 12.7%, respectively, compared with a YE2015 WA DSCR and WA debt yield of 2.33x and 11.2%, respectively. The pool is concentrated, as the top 15 loans represent 82.4% of the current pool balance. However, the performance of these loans has been healthy overall. Based on YE2016 financials, these loans reported a WA DSCR and debt yield of 2.43x and 12.4%, respectively, reflecting a WA 13.8% improvement in cash flows over the DBRS cash flows derived at issuance and a 3.7% improvement in cash flows year over year. As of the December 2017 remittance, there are no loans with partial-term interest-only (IO) payments remaining, and three of the remaining loans, representing 27.8% of the current pool balance, were structured with full-term IO payments.

As of the December 2017 remittance, there are eight loans, representing 19.9% of the pool, on the servicer’s watchlist, including the largest loan in the pool. Two of these loans are being monitored for non-performance-related issues limited to deferred maintenance. The largest loan in the pool is being monitored for the upcoming lease expiration of the General Services Administration Department of State; however, because the tenant has since extended its lease through to January 2021, DBRS expects the loan will be removed from the watchlist in the near term. The Streets of Brentwood loan (Prospectus ID#12; 3.5% of the pool balance) is currently in special servicing for imminent maturity default after the loan matured on January 6, 2018. The loan reported a YE2016 DSCR of 2.82x and, based on those cash flows, a DBRS Refinance DSCR of 1.97x. The borrower is currently working with the special servicer on a resolution. For additional information on DBRS’s perspective on this loan, please see the loan commentary on the DBRS Viewpoint platform, for which information is listed below.

At issuance, DBRS shadow-rated the Federal Center Plaza loan (Prospectus ID#1; 11.6% of the current pool balance) investment grade. With this review, DBRS confirms that the performance of that loan remains consistent with investment-grade loan characteristics.

Classes X-A and X-B 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 the larger and/or pivotal watchlisted loans, including the specially serviced loan, in the transaction, as well as for the top 15 loans, in the DBRS Viewpoint platform. Registration and access to content 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 under Related Documents 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.