DBRS Morningstar Confirms All Classes of Wells Fargo Commercial Mortgage Trust 2015-C27

DBRS Limited (DBRS Morningstar) confirmed the ratings of Commercial Mortgage Pass-Through Certificates, Series 2015-C27 issued by Wells Fargo Commercial Mortgage Trust 2015-C27 as follows:

-- Class A-4 at AAA (sf)
-- Class A-5 at AAA (sf)
-- Class A-S at AAA (sf)
-- Class A-SB at AAA (sf)
-- Class X-A at AAA (sf)
-- Class B at AA (sf)
-- Class C at A (low) (sf)
-- Class PEX at A (low) (sf)
-- Class X-B 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.

The rating confirmations reflect the overall stable performance of the transaction, which has had a collateral reduction of 12.6% since issuance, with 84 out of the original 95 loans remaining in the pool as of the February 2020 remittance report. Six loans, including one loan in the Top 15, are fully defeased, representing 4.9% of the pool.

Loans representing 67.3% and 95.1% of the current pool balance reported partial-year 2019 and YE2018 financials, respectively. Collectively, the loans reporting YE2018 financials have a weighted-average (WA) debt service coverage ratio (DSCR) and debt yield of 1.77 times (x) and 10.8%, respectively. The largest 15 loans reported YE2018 financials, with a WA DSCR and debt yield of 1.79x and 10.6%, respectively, representing a WA cash flow improvement of 15.0% over the DBRS Morningstar net cash flow figures derived at issuance.

The pool is concentrated with loans secured by hospitality properties, as 19 loans, representing 24.5% of the pool, are secured by hotel properties, including four in the Top 15 in Marriott Greensboro (Prospectus ID#4, 4.4% of the pool); Maxwell Hotel (Prospectus ID#8, 3.1% of the pool); Residence Inn Tampa Westshore Airport (Prospectus ID#11, 2.5% of the pool), and Residence Inn Charlotte Southpark (Prospectus ID#14, 2.2% of the pool). The larger loans in particular have performed quite well, but given the ongoing impact to the hotel industry amid the Coronavirus Disease (COVID-19) outbreak and the resulting halt in personal and business travel around the world, DBRS Morningstar will be closely monitoring for developments. As updated information with regard to specific impacts to the hotels in this and other pools is received, updated loan commentary will be provided on the DBRS Viewpoint platform, for which information has been provided, below.

As of the February 2020 remittance, there were two loans, representing 0.9% of the pool, in special servicing, and 16 loans, representing 16.8% of the pool, are on the servicer’s watchlist. Three loans on the servicer’s watchlist, representing 2.4% of the pool, are being monitored for deferred maintenance, while the remainder generally showed performance declines. As applicable, DBRS Morningstar applied a liquidation scenario for the loans in special servicing based on the most recent appraised values and a probability of default multiplier for loans on the watchlist (and others) exhibiting increased risks from issuance in the analysis for this review.

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.

Classes X-A, X-B, 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 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#3 – 312 Elm (4.9% of the pool) – DBRS Morningstar Hotlist
-- Prospectus ID#49 – Fairfield Inn & Suites - Cincinnati (0.6% 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 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.

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 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 [email protected].

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 [email protected].

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