DBRS Confirms All Classes of Wells Fargo Commercial Mortgage Trust 2015-LC20

DBRS Limited (DBRS) confirmed the ratings on the Commercial Mortgage Pass-Through Certificates, Series 2015-LC20 issued by Wells Fargo Commercial Mortgage Trust 2015-LC20 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 X-B at A (sf)
-- Class C at A (low) (sf)
-- Class PEX at A (low) (sf)
-- Class D at BBB (low) (sf)
-- Class X-E at BB (sf)
-- Class E at BB (low) (sf)
-- Class X-F at B (sf)
-- Class F at B (low) (sf)

All trends are Stable.

The rating confirmations reflect the overall performance of the transaction, which has remained stable since issuance. The collateral consists of 68 fixed-rate loans secured by 122 commercial properties and as of the February 2018 remittance there has been a collateral reduction of 1.8% since issuance. Loans representing 26.7% of the current pool balance are reporting YE2017 figures while 73.3% are reporting YE2016 figures. According to the YE2016 financials, the pool reported a weighted-average (WA) debt service coverage ratio (DSCR) and WA debt yield of 1.72 times (x) and 9.6%, respectively. The WA DBRS Term DSCR and WA DBRS Debt Yield at issuance were 1.45x and 8.1%, respectively. The largest 15 loans in the pool represent 56.3% of the current pool balance and reported a WA YE2016 DSCR of 1.66x, representing a WA net cash flow (NCF) growth of 14.6% over the DBRS issuance NCF figures.

As of the February 2018 remittance, there are three loans on the servicer’s watchlist, representing 3.7% of the current pool balance. The largest of these loans, Prospectus ID#17 – Riverstone Apartments, which represents 1.8% of the current pool balance, was flagged for deferred maintenance. The other two loans are being monitored for occupancy-related cash flow declines or upcoming rollover; DBRS assumed a stressed scenario for both loans to increase the probability of default in the analysis for this review. For additional information, please see the DBRS Loan Commentary for this loan in the DBRS Viewpoint platform.

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.

As part of this review, DBRS has provided updated analysis and in-depth commentary in the DBRS Viewpoint platform for the following loans in the transaction:

-- 3 Columbus Circle
-- University of Delware Hotel Portfolio
-- DS Service Portfolio
-- 18th Street Atrium
-- Hampton Inn & Suites - Miami Airport
-- Shop City Shopping Center
-- Wildhorse Marketplace

For complimentary access to this content, please register for the DBRS Viewpoint platform at www.viewpoint.dbrs.com. The platform includes issuer and servicer data for the entire commercial mortgage-backed security universe, as well as deal and loan-level commentary for all DBRS rated transactions.

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 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.