DBRS Confirms Morgan Stanley Bank of America Merrill Lynch Trust 2014-C14

DBRS Limited (DBRS) confirmed the ratings on all classes of the Commercial Mortgage Pass-Through Certificates, Series 2014-C14 issued by Morgan Stanley Bank of America Merrill Lynch Trust 2014-C14 as follows:

-- 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 X-B at AA (high) (sf)
-- Class B at AA (sf)
-- Class C at A (low) (sf)
-- Class PST at A (low) (sf)
-- Class D at BBB (low) (sf)
-- Class E at BB (high) (sf)
-- Class F at BB (sf)
-- Class X-C at BB (low) (sf)
-- Class G at B (high) (sf)

All trends are Stable.

The Class A-S, Class B and Class C certificates may be exchanged for the Class PST certificates (and vice versa).

The rating confirmations reflect the overall stable performance of the transaction since issuance. As of the September 2018 remittance, 54 of the original 58 loans remain in the pool with an aggregate principal balance of $1.4 billion, representing a collateral reduction of 7.4% since issuance. There are two loans that are fully defeased, representing 2.7% of the current pool balance. Loans representing 96.1% of the pool reported year-end 2017 financials. These loans reported a weighted-average (WA) debt service coverage ratio (DSCR) and debt yield of 1.85 times (x) and 11.5%, respectively. Based on the servicer’s most recent reporting, the 15 largest loans reported a WA net cash flow growth of 4.4% over the DBRS issuance figures, with a WA DSCR and debt yield of 1.88x and 11.2%, respectively.

As of the September 2018 remittance report, there are eight loans on the servicer’s watchlist, representing 8.7% of the current pool balance and two loans in special servicing, representing 4.4% of the current pool balance. The majority of the loans on the watchlist are being monitored for performance-related reasons driven by cash flow declines. The largest loan in special servicing, The Aspen Heights – Columbia loan (3.7% of the current pool balance) is secured by a student housing property in Columbia, Missouri, home to the University of Missouri. The loan was previously on the servicer’s watchlist and transferred to special servicing in November 2017, due to imminent default. The subject continues to struggle year over year due to declining occupancy and rental rates as a result of declines in enrollment at the University of Missouri and successive years of new supply in the market. For additional information on this loan, please see the loan commentary on the DBRS Viewpoint platform, for which information has been provided below.

At issuance, DBRS shadow-rated the JW Marriott and Fairfield Inn & Suites loan (Prospectus ID#5, 5.5% of the current pool balance) and the Courtyard Isla Verde Beach Resort loan (Prospectus ID#19; 2.0% of the current pool balance) as investment grade. DBRS confirmed that the performance of these loans remains consistent with investment-grade loan characteristics. The Courtyard Isla Verde Beach Resort loan is secured by a hotel property in Puerto Rico, which was affected by Hurricanes Irma and Maria. The property remains open as it did not suffer major damage as a result of either storm, with repairs anticipated to be completed by December 2018. This loan also has upcoming maturity in February 2019. For additional information on this loan, please see the loan commentary on the DBRS Viewpoint platform.

Classes X-A, X-B and X-C 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:

-- JW Marriott and Fairfield Inn & Suites
-- Aspen Heights – Columbia
-- Stonestown Galleria
-- Round Rock Crossing
-- Courtyard Isla Verde Beach Resort
-- Pence Building

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 Methodology, 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.