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

DBRS, Inc. (DBRS Morningstar) upgraded the ratings on the following classes of Asset-Backed Notes issued by Selkirk 2013-2 (the Trust):

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

DBRS Morningstar also confirmed the rating of the following class:

-- Class D at AAA (sf)

All trends are Stable. Additionally, Classes B and C have been discontinued as both classes have been repaid in full.

The rating upgrades reflect the increased credit support to the bonds as a result of scheduled loan amortization and successful loan repayment as three loans have successfully paid out of the Trust in the last 12 months. Additionally, the remaining loans in the Trust continue to exhibit stable performance. As of the October 2019 remittance, there has been a collateral reduction of 90.1% since issuance and 9.0% in the last year. There are nine loans remaining out of the original 40. The pool is concentrated as the five largest loans represent 92.5% of the current pool balance. Additionally, four loans (65.0% of the current pool balance) are secured by retail properties.

The remaining loans in the pool continue to exhibit stable performance with a weighted-average (WA) YE2018 debt service coverage ratio (DSCR) of 1.88 times (x) compared with the YE2017 WA DSCR of 1.97x. Additionally, the pool benefits from low leverage financing, as the pool has a WA loan-to-value ratio of 44.8%, according to issuance-appraised values. Three loans, representing 4.1% of the current pool balance, are scheduled to mature in 2020. Based on YE2018 cash flows, these loans have a WA exit debt yield of 28.9%.

As of the October 2019 remittance, there are no loans in special servicing and no loans on the servicer’s watchlist.

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

DBRS Morningstar provides updated analysis and in-depth commentary in the DBRS Viewpoint platform for the following loans in the transaction:

-- Prospectus ID#10 – 1875 Broadway (26.2% of pool)
-- Prospectus ID#16 – Oak Hollow Square (19.7% of pool)
-- Prospectus ID#17 – MVG-8 Industrial Portfolio (19.3% 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 most outstanding CMBS transactions (including non-DBRS Morningstar rated), as well as loan-level and transaction-level commentary for most DBRS Morningstar-rated and -monitored 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 www.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 Morningstar Global Structured Finance Related Methodologies document, which can be found on www.dbrs.com in the Commentary tab under Regulatory Affairs. 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 Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

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