DBRS Upgrades Four Classes of Asset-Backed Notes Issued by Selkirk 2013-2

DBRS Limited (DBRS) upgraded the ratings on the following classes of Asset-Backed Notes (the Notes) issued by Selkirk 2013-2 as follows:

-- Class D to AAA (sf) from AA (sf)
-- Class E to AA (sf) from A (sf)
-- Class F to AA (low) (sf) from BBB (high) (sf)
-- Class G to A (low) (sf) from BBB (low) (sf)

DBRS also discontinued the rating on Class A2 as it has been fully repaid.

DBRS also changed the trends on Class F and Class G to Positive from Stable. All other classes remain Stable.

DBRS also confirmed the ratings on the following classes of Notes:

-- Class B at AAA (sf)
-- Class C at AAA (sf)

The rating upgrades and trend change on Classes F and G reflect the increased credit support to the bonds as a result of four loan repayments in the last 12 months, as well as the overall strong performance of the remaining collateral. As of the November 2018 remittance, there has been a collateral reduction of 81.1% since issuance and 25.1% in the last year. There are 12 loans remaining out of the original 40. The pool is concentrated as the largest and five largest loans compose 30.8% and 76.6% of the pool, respectively. Additionally, six loans (69.2% of the pool) are secured by retail properties.

The remaining loans in the pool continue to exhibit stable performance with a weighted-average (WA) year-end (YE) 2017 debt-service coverage ratio (DSCR) of 1.97 times (x), compared with the YE2016 WA DSCR of 1.99x and DBRS issuance WA Term DSCR of 1.55x derived at issuance, reflecting an overall cash flow growth of 22.9% since origination. Two loans are maturing in the next 12 months representing 11.5% of the current pool balance. These loans have a WA exit debt yield of 40.5% based on YE2017 cash flows.

Per the November 2018 remittance, there are no loans in special servicing and no loans on the servicer’s watchlist.

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#4 - Shadowood Square (30.8% of the pool balance)
-- Prospectus ID#21 - Addison Mall (8.5% of the pool balance)

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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 & 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.