DBRS Discontinues Two Classes and Confirms Five Classes of RAIT 2016-FL6 Trust

DBRS Limited (DBRS) discontinued the ratings on the Floating Rate Notes, Class A and Floating Rate Notes, Class A-S issued by RAIT 2016-FL6 Trust (the Trust), as these classes were repaid with the June 2018 and September 2018 remittances, respectively. DBRS also removed the ratings of the remaining classes of Floating Rate Notes (the Notes) from Under Review with Negative Implications, where they were placed on March 12, 2018. In addition, DBRS confirmed the ratings on the following classes of Notes issued by the Trust:

-- Class B at AA (low) (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 current performance of the remaining collateral in the Trust, which consists of eight loans secured by transitional commercial real estate properties in a period of stabilizing. As of the October 2018 remittance, trust collateral reduction was 70.6%, as 15 loans had repaid since issuance. Based on updated reporting provided by RAIT Financial Trust (RAIT or the Company; a non-rated entity) in its capacity as servicer, DBRS confirmed that the majority of the remaining loan sponsors are successfully executing their respective business plans. In addition to positively trending property performance, DBRS was provided with a redemption notice from RAIT in its capacity as issuer on November 2, 2018, at the request of the Class G noteholder. The expected redemption date is December 17, 2018, at which point, the Trust will be collapsed.

The classes were previously placed Under Review with Negative Implications due to concerns over the servicing of all RAIT transactions, as RAIT, parent of the issuer, mortgage loan seller and servicer/special servicer, advancing agent and trust administrator, was experiencing financial troubles this past year. The uncertainty surrounding the direction of the Company and the concerns regarding RAIT’s capabilities as servicer to ensure the underlying loans are performing in line with their respective business plans were cited by DBRS. DBRS met with the servicing team and senior management on several occasions, and based on the meetings, the servicing and asset management teams in place appeared to be sufficient to service its commercial real estate collateralized loan obligation transactions.

The ratings assigned to Classes C and D are different than that implied by the analysis within the DBRS North American Direct Sizing Hurdles. However, the Trust is expected to be collapsed in December 2018 with the redemption of the Notes.

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

Notes:
The principal methodology is North American CMBS Surveillance Methodology, which can be found on dbrs.com under Methodologies & Criteria. 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.