DBRS Morningstar Confirms All Classes of A10 Permanent Asset Financing 2017-II, LLC

DBRS Limited (DBRS Morningstar) confirmed its ratings on the following classes of A10 Permanent Asset Financing 2017-II, LLC (the Issuer):

-- Class A Notes at AAA (sf)
-- Class B Notes at A (low) (sf)
-- Class C Notes at BBB (low) (sf)

All trends are Stable.

To confirm the ratings, DBRS Morningstar analyzed the loans contributed to date and constructed a worst-case pool based on concentration limits and eligibility requirements as defined in the trust indenture relating to the minimum subordination requirements. As of the March 2020 remittance, the trust had 39 loans contributed to date with an aggregate principal balance of approximately $297.2 million. In conjunction with investor approval, the Issuer can contribute additional collateral up to an aggregate balance of $400.0 million with the funding date expiring at YE2020. DBRS Morningstar’s ratings contemplate timely payments of distributable interest and ultimate payment of principal by the legal final maturity in June 2051.

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.

DBRS Morningstar materially deviated from its principal methodology when determining the rating assigned to Class B as the quantitative results suggest a higher rating. DBRS Morningstar considers a material deviation to be a rating differential of three or more notches between the assigned rating and the rating implied by the quantitative results that is a substantial component of a rating methodology. The deviation is warranted given the structural features outweigh the quantitative output as the transaction is in its initial funding period.

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 notes that the above press release was amended on April 28, 2020, to clarify the material deviation to Class B. The change was minor and would not impact the understanding of the reader.

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 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 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.

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@dbrsmorningstar.com.

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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