DBRS Confirms All Classes of WFRBS Commercial Mortgage Trust 2012-C10

DBRS Limited (DBRS) confirmed the ratings on the following classes of Commercial Mortgage Pass-Through Certificates, Series 2012-C10 issued by WFRBS Commercial Mortgage Trust 2012-C10:

-- Class A-3 at AAA (sf)
-- Class A-FL at AAA (sf)
-- Class A-FX at AAA (sf)
-- Class A-SB at AAA (sf)
-- Class A-S 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 D at BBB (low) (sf)
-- Class E at BB (sf)
-- Class F at B (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction since issuance. This transaction closed in October 2012 with a trust balance of $1.3 billion and 85 loans secured by 122 properties. As of the September 2018 remittance, 73 loans remain in the pool with a current trust balance of $1.1 billion, representing a collateral reduction of 15.9% due to loan repayment and scheduled loan amortization. Based on the most recent reporting, the pool is reporting a weighted-average (WA) debt-service coverage ratio (DSCR) and debt yield of 1.93 times (x) and 11.9%, respectively, compared with the year-end 2016 WA DSCR and debt yield of 2.00x and 12.5%, respectively. Based on the most recent reporting, the top 15 loans reported a WA DSCR and debt yield of 2.06x and 11.5%, respectively.

This transaction is concentrated by property type as nine loans (38.2% of the pool) in the top 15 are secured by retail properties, specifically by regional malls (five loans, representing 28.3% of the pool), which are located in secondary markets. Based on the most recently reported figures for the individual properties, the regional malls reported WA sales per square foot of $338 and a WA net cash flow decline of 4.3% from 2016 to 2017. There are ten loans (13.4% of the pool) on the servicer’s watchlist, including two loans in the top 15. The pool does benefit from property location as approximately 80.9% of the pool is secured by properties in urban or suburban markets and six loans (2.9% of the pool) are fully defeased.

Classes X-A and X-B are interest-only (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.

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, including all five loans secured by regional malls within the top 15:

-- Concord Mills (Prospectus ID#2, 8.4% of the pool)
-- Dayton Mall (Prospectus ID#3, 6.3% of the pool)
-- Rogue Valley Mall (Prospectus ID#5, 4.2% of the pool)
-- Animas Valley Mall (Prospectus ID#6, 1.8% of the pool)
-- Bricktown Square Shopping Center (Prospectus ID#8, 2.7% of the pool)
-- Towne Mall (Prospectus ID#12, 1.8% of the pool)
-- Philadelphia Industrial Portfolio (Prospectus ID#31, 1.0% of the pool)

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 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 North American CMBS 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.

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