DBRS Confirms All Classes of Morgan Stanley Capital I Trust 2017-H1

DBRS Limited (DBRS) confirmed all classes of the Commercial Mortgage Pass-Through Certificates, Series 2017-H1 issued by Morgan Stanley Capital I Trust 2017-H1 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 (high) (sf)
-- Class X-B at AA (low) (sf)
-- Class C at A (high) (sf)
-- Class X-D at A (sf)
-- Class D at A (low) (sf)
-- Class E-RR at BBB (sf)
-- Class F-RR at BBB (low) (sf)
-- Class G-RR at BB (low) (sf)
-- Class H-RR at B (low) (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction, which has generally remained in line with DBRS’s expectations since issuance. This transaction closed in May 2017, with a trust balance of $1,090 million, composed of 58 fixed-rate loans secured by 89 commercial properties. As of the May 2018 remittance, the pool has an aggregate balance of $1,085.0 million, with a collateral reduction of 0.5% since issuance due to scheduled loan amortization, with all loans remaining in the pool. There are 14 loans (36.0% of the pool balance), including six of the top 10 loans, that were structured with full interest-only (IO) payment terms at issuance. In addition, 19 loans (32.1% of the pool) were structured with partial IO periods at issuance, with a remaining partial IO term ranging from five months to 48 months.

Of the 58 loans in the pool, 40 loans (59.3% of the pool) reported year-end 2017 financials and based on those figures, the weighted-average (WA) debt service coverage ratio (DSCR) and debt yield was 1.61 times (x) and 9.3%, respectively. At issuance, the WA DBRS Term DSCR and WA DBRS Debt Yield for the pool was 1.59x and 8.9%, respectively.

As of the April 2018 remittance, there were no loans on the servicer’s watchlist and no loans in special servicing.

Classes X-A, X-B and X-D are IO certificates that reference a single rated tranche or multiple rated tranches. The IO rating mirrors the lowest-rated applicable reference obligation 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.

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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.

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