DBRS Morningstar Upgrades Six Classes of Real Estate Asset Liquidity Trust, Series 2014-1

DBRS, Inc. (DBRS Morningstar) upgraded six classes of Commercial Mortgage Pass-Through Certificates Series 2014-1 issued by Real Estate Asset Liquidity Trust, 2014-1 as follows:

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

In addition, DBRS Morningstar has confirmed the rating on the remaining class in the transaction as listed below:

-- Class A at AAA (sf)

All trends are Stable.

The rating upgrades reflect the significantly increased credit support for the transaction because recent successful loan repayments have resulted in a collateral reduction of 54.9% since issuance. As of the February 2020 remittance, 15 of the original 34 loans remained in the pool. All loans are reporting YE2018 financials, except the second-largest loan, 1015 Golf Links Road (Prospectus ID#2; 13.7% of the pool balance), which most recently reported YE2016 financials. Based on the YE2018 reporting, the weighted average (WA) debt service coverage ratio (DSCR) and debt yield for reporting loans was 1.63 times and 11.8%, respectively, representing a 23.6% net cash flow (NCF) growth over the DBRS Morningstar NCFs derived at issuance. The 1015 Golf Links Road loan is on the watchlist because the borrower has not submitted updated financial reports for the last two year-end cycles. The loan is secured by a retail property in Ancaster, Ontario, and has been current throughout the term with a 50% recourse guarantee to the sponsor.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework and its methodologies can be found at: https://www.dbrsmorningstar.com/research/357792.

Class X is an interest-only (IO) certificate that references 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 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#1 – Skyline Industrial Montreal (20.0% of the pool)
-- Prospectus ID#2 – 1015 Golf Links Road (13.7% of the pool)

For complimentary access to this content, please register for the DBRS Viewpoint platform at www.viewpoint.dbrsmorningstar.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:
The principal methodology is the North American CMBS Surveillance Methodology, which can be found on www.dbrsmorningstar.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.dbrsmorningstar.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.

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/357883.

For more information regarding structured finance rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/358308.

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.

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the rating process. Please note a sensitivity analysis is not performed for CMBS bonds rated CCC or lower. The DBRS Morningstar long-term rating scale definition indicates that ratings of CCC or lower are assigned when the bond is highly likely to default or default is imminent, thereby prevailing over a sensitivity analysis.

For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com.

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