DBRS Confirms Ratings on MSBAM Commercial Mortgage Securities Trust 2014-C15

DBRS Limited (DBRS) confirmed Commercial Mortgage Pass-Through Certificates, Series 2014-C15 (the Certificates), issued by Morgan Stanley Bank of America Merrill Lynch Trust 2014-C15 (the Trust) as follows:

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class A-SB at AAA (sf)
-- Class A-3 at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class X-A at AAA (sf)
-- Class A-S at AAA (sf)
-- Class X-B at AA (high) (sf)
-- Class B at AA (sf)
-- Class C at A (high) (sf)
-- Class PST at A (high) (sf)
-- Class D at BBB (sf)
-- Class E at BBB (low) (sf)
-- Class F at BB (sf)
-- Class G at BB (low) (sf)
-- Class X-C at B (sf)
-- Class H at B (low) (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction since issuance when the collateral consisted of 48 fixed-rate loans secured by 76 commercial properties. As of the January 2018 remittance, 47 loans remain in the pool with an aggregate principal balance of $1.03 billion, representing a collateral reduction of 4.3% since issuance as a result of the repayment of one loan and scheduled loan amortization. One loan, Campus Court (Prospectus ID#23, 1.0% of the original pool), was liquidated from the pool with no loss with the November 2017 remittance.

There are currently five loans (11.9% of the pool) with remaining interest-only (IO) periods, ranging from 12 to 26 months, while four loans (23.0% of the pool) were structured with full IO terms. Four loans (9.0% of the pool) are secured by collateral that was fully defeased. To date, 45 loans (73.5% of the pool) reported partial-year 2017 financials, while 43 loans (96.0% of the pool) 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 2.15 times (x) and 13.3%, respectively, compared with the WA DBRS Term DSCR and WA DBRS Debt Yield of 1.75x and 10.4%, respectively.

The pool is concentrated by property type, as 14 loans representing 27.0% of the pool, are secured by retail properties, five loans (22.5% of the pool) are secured by hotel properties, four loans (19.3% of the pool) are secured by office properties and 11 loans (16.4% of the pool) are secured by multifamily properties. By loan size, the pool is also concentrated, as the Top 15 loans represent 77.0% of the pool. Excluding defeasance, the Top 15 loans (based on most recent financials) reported a WA DSCR of 2.29x, compared with the WA DBRS Term DSCR of 1.90x, representing net cash flow growth of 23.1% over the DBRS figures.

As of the January 2018 remittance, there are five loans (3.2% of the pool) on the servicer’s watchlist. Two loans (1.7% of the pool) were placed on the servicer’s watchlist with the January 2018 remittance and, to date, have no comments available. Based on the most recent financials, these two loans had a WA DSCR of 1.70x, compared with the WA DBRS Term DSCR of 1.16x. Of the remaining three loans on the watchlist, two loans (0.9% of the pool) were flagged because of performance-related reasons, while one loan (0.5% of the pool) was flagged because of deferred maintenance.

At issuance, DBRS assigned an investment-grade shadow rating on both the Arundel Mills & Marketplace (Prospectus ID#1, 14.2% of the pool) and the JW Marriott and Fairfield Inn & Suites (Prospectus ID#7, 4.7% of the pool) loans. DBRS confirms with this review that the performance of both loans remains consistent with investment-grade loan characteristics.

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

The ratings assigned to Classes F, G and H 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 given the sustainability of loan performance trends not demonstrated.

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 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 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.

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.

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 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.