DBRS Confirms All Classes of Morgan Stanley Bank of America Merrill Lynch Trust 2014-C19

DBRS, Inc. (DBRS) confirmed the ratings for all classes of Commercial Mortgage Pass-Through Certificates, Series 2014-C19 issued by Morgan Stanley Bank of America Merrill Lynch Trust 2014-C19 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-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 X-C at A (sf)
-- Class C at A (low) (sf)
-- Class PST at A (low) (sf)
-- Class X-D at BBB (sf)
-- Class D at BBB (low) (sf)
-- Class X-E at BB (sf)
-- Class E at BB (low) (sf)
-- Class X-F at B (sf)
-- Class F at B (low) (sf)

All trends are Stable. DBRS does not rate the first loss piece, Class G

The rating confirmations reflect the overall stable performance of the transaction. As of the November 2018 remittance, 76 of the original 77 loans remain in the pool with an aggregate principal balance of $1.43 billion, representing a collateral reduction of 2.7% since issuance as a result of the unscheduled repayment of one loan and scheduled loan amortization. The transaction benefits from defeasance, as five loans (including the largest), representing 11.1% of the current pool balance, are secured by defeasance collateral.

Excluding defeasance collateral, all loans reported YE2017 financials, while 66 loans (79.5% of the pool) have reported patial-year 2018 financials. Based on the most recent year-end financial reporting, the transaction had a weighted-average (WA) debt service coverage ratio (DSCR) and WA Debt Yield of 1.71 times (x) and 9.5%, respectively, compared with the DBRS WA Term DSCR and WA Debt Yield of 1.55x and 8.6%, respectively. The largest loans continue to exhibit stable performance, as excluding defeansance collateral, the Top 15 loans reported these figures at 1.52x and 7.6%, respectively, which remains unchanged from the previous year.

As of the November 2018 remittance, there are two loans in special servicing and 12 loans on the servicer’s watchlist, representing 2.3% and 20.8% of the current pool balance, respectively. The Oriental Plaza and Villa Marina Portfolio loan (Prospectus ID#18) transferred to special servicing in August 2018, as the loan became delinquent during the prolonged clean up and repair process as the properties are located in Puerto Rico and suffered severe damage as a result of Hurricane Maria. The 333 Northbelt Houston loan (Prospectus ID#24) transferred to the Special Servicer in September 2018, after the borrower did not comply with the cash sweep provision, which was triggered after the trailing six-month DSCR fell below 1.25x. The office property is located in the Northbelt submarket of Houston, which has been particularly hit hard by the decline in the regional oil and gas sector with vacancy rates above 30.0%. The loan remains current at this time.

The two largest loans on the servicer’s watchlist, TKG Retail Portfolio (Prospectus ID#3) and the One & Only Ocean Club (Prospectus ID#8), have been incorrectly flagged for tax payments in arrears and will be removed, according to the servicer. The other loans are being monitored for large tenant vacancies, upcoming tenant rollover, deferred maintenance or declines in financial performance.

At issuance DBRS shadow-rated the 300 North Lasalle loan (Prospectus ID#2) as investment grade. DBRS confirmed that the performance of the loan remains consistent with investment grade loan characteristics.

Classes X-A, X-B, X-C, X-D, X-E and X-F 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:
-- Prospectus ID#2 – 300 North LaSalle (8.9% of pool)
-- Prospectus ID#9 – PacStar Retail Portfolio (3.5% of pool)
-- Prospectus ID#11 – Allendale Corporate Center (2.4% of pool)
-- Prospectus ID#18 – Oriental Plaza and Villa Marina Portfolio (1.5% of pool)
-- Prospectus ID#24 – 333 Northbelt Houston (0.9% of 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 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 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.