DBRS Confirms All Classes of Hunt Commercial Real Estate Notes 2017-FL1 Ltd.

DBRS Limited (DBRS) confirmed the following classes of the secured floating-rate notes (the Notes) issued by Hunt Commercial Real Estate Notes 2017-FL1, Ltd. as follows:

-- Class A at AAA (sf)
-- Class A-S at AAA (sf)
-- Class B at AA (low) (sf)
-- Class C at A (low) (sf)
-- Class D at BBB (low) (sf)
-- Class E at B (low) (sf)

All trends are Stable.

The rating confirmations reflect the performance of the transaction, which remains in line with DBRS’s expectations at issuance. At issuance, the pool consisted of 23 interest-only floating-rate loans secured by 36 transitional properties totaling $279.4 million, excluding the $15.5 million of future funding and additional ramp-up commitment. The total Target Mortgage Asset Balance is $349.2 million. As of the July 2018 remittance, the pool consisted of 22 interest-only floating rate loans with 14 of the original loans remaining, representing a total aggregate principal balance of $311.2 million. Currently, eight loans have future funding participation of $15.6 million remaining. The loans are secured by cash flowing assets, most of which are in a period of transition with plans to stabilize and improve the asset value.

The transaction features a reinvestment period through February 2020, whereby the issuer can substitute collateral in the pool subject to Eligibility Criteria, including Rating Agency Conditions, by DBRS. The transaction pays sequentially following the reinvestment period. Since issuance, nine loans have been paid off and seven loans (36.8% of the current trust balance) have been contributed to the pool during the reinvestment period. Most loans have an initial term of two or three years, with extension options generally available, subject to loan document criteria. Five loans, representing 20.6% of the current trust balance, have maturities in 2018.

The pool is concentrated by loan size, as the largest 15 loans represent 82.6% of the current trust balance. The pool is also concentrated by property type as the majority of the loans are secured by multifamily properties and only four loans, representing 10.9% of the current trust balance, are secured by office or retail properties. Per the most recent financials available, the pool had a weighted-average debt yield of 7.2%, based on fully funded whole-loan amounts.

All ratings will be subject to ongoing surveillance, which could result in ratings being upgraded, downgraded, placed under review, confirmed or discontinued by DBRS.

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:

-- Tampa 652 Portfolio
-- Strategic Texas Portfolio

For complimentary access to this content, please register for the DBRS Viewpoint platform at www.viewpoint.dbrs.com. The platform includes loan level-data for the entire CMBS 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.

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.

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the rating process.

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