DBRS Morningstar Confirms All Ratings of BANK 2019-BNK22

DBRS Limited (DBRS Morningstar) confirmed its ratings on the Commercial Mortgage Pass-Through Certificates, Series 2019-BNK22 issued by BANK 2019-BNK22 as follows:

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class A-3 at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class A-SB at AAA (sf)
-- Class A-S at AAA (sf)
-- Class B at AAA (sf)
-- Class C at AA (sf)
-- Class D at A (sf)
-- Class E at BBB (high) (sf)
-- Class F at BBB (low) (sf)
-- Class G at BB (sf)
-- Class H at B (high) (sf)
-- Class X-A at AAA (sf)
-- Class X-B at AA (high) (sf)
-- Class X-D at A (low) (sf)
-- Class X-F at BBB (sf)
-- Class X-G at BB (high) (sf)
-- Class X-H at BB (low) (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction since issuance. At issuance, the transaction consisted of 58 fixed-rate loans secured by 131 commercial and multifamily properties at a trust balance of $1.2 billion. According to the October 2020 remittance, all loans remain from issuance remain in the pool and there has been negligible amortization to date. The weighted-average (WA) WA loan-to-value ratio (LTV) of the pool at issuance was 52.9%, and the pool is scheduled to amortize down to a WA LTV of 51.5% at maturity. The transaction is concentrated by property type as eight loans, representing 36.8% of the current trust balance, are secured by office collateral while the second largest concentration is represented by five loans secured by self-storage collateral, representing 13.9% of the current trust balance.

There is one loan, The Blvd (Prospectus ID#23; 1.2% of the current trust balance), in special servicing. Secured by a three-story retail property along the Myrtle Beach Boardwalk in South Carolina, this loan was transferred to the special servicer in April 2020 as a result of the effects of the Coronavirus Disease (COVID-19) pandemic on the property’s operations. Per the latest information available, the loan is past due for the September 2020 debt service payment and the servicer is continuing to analyze the borrower’s relief request. Additionally per a recent article from “Myrtle Beach Online,” the property is at the center of a lawsuit as the current sponsor is claiming that the previous sponsor failed to fully disclose tenant operations and lease terms, leading to the current sponsor overvaluing the property when purchasing it. DBRS Morningstar analyzed the loan with an elevated probability of default (PoD) to reflect the increased risk.

Eight loans, representing 16.9% of the current trust balance, are on the servicer’s watchlist. The second largest loan, 230 Park Avenue South (Prospectus ID#2; 9.2% of the current trust balance), was added to the watchlist in October 2020 given the loan’s low DSCR. The loan’s low cash flow was attributed to a free rent period for the subject’s largest tenant Discovery Communications (96.7% of NRA); however, this was expected as the loan was structured with an upfront rent concession reserve of $24.8 million. Five loans, representing 10.9% of the current trust balance, are on the watchlist for deferred maintenance issues.

At issuance, DBRS Morningstar shadow-rated three loans, representing 26.2% of the current trust balance, investment grade that included Park Tower at Transbay (Prospectus ID#1; 9.6% of the current trust balance), 230 Park Avenue South, and Midtown Center (Prospectus ID#3; 7.4% of the current trust balance). DBRS Morningstar confirmed the shadow ratings of Park Tower at Transbay and 230 Park Avenue South at AAA (sf) and BBB (low) (sf), respectively, given both properties exhibiting low leverage and investment grade tenancy. The shadow rating for Midtown Center was confirmed at AA (sf) given the asset’s high quality, excellent location, and sponsor strength.

ESG CONSIDERATIONS

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-D, X-F, X-G, and X-H 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 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:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is the North American CMBS Surveillance Methodology (March 6, 2020), 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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