Press Release

DBRS Morningstar Confirms Ratings on MSBAM 2015-C27, Removes Nine Classes from Under Review with Negative Implications

CMBS
November 24, 2020

DBRS, Inc. (DBRS Morningstar) confirmed the ratings of the Commercial Mortgage Pass-Through Certificates, Series 2015-C27 issued by Morgan Stanley Bank of America Merrill Lynch Trust 2015-C27 as follows:

-- 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 X-A at AAA (sf)
-- Class X-B at AAA (sf)
-- Class B at AA (low) (sf)
-- Class C at A (low) (sf)
-- Class X-D at BBB (high) (sf)
-- Class D at BBB (sf)
-- Class X-E at BBB (sf)
-- Class E at BBB (low) (sf)
-- Class X-F at BB (high) (sf)
-- Class F at BB (sf)
-- Class G at B (sf)
-- Class X-GH at B (sf)
-- Class H at B (low) (sf)

Classes D, E, F, G, H, X-D, X-E, X-F, and X-GH were removed from Under Review with Negative Implications, where they were placed on August 6, 2020. These nine classes have Negative trends. All other trends are Stable.

The Negative trends reflect the continued performance challenges for the underlying collateral, much of which have been driven by the impacts of the Coronavirus Disease (COVID-19) global pandemic. As the October 2020 remittance, loans representing 12.7% of the pool are in special servicing. DBRS Morningstar also notes that the pool has a high concentration of hospitality properties, representing 17.4%. The hospitality properties have been the most severely affected by the initial effects of the coronavirus pandemic and, as such, the high concentration suggests increased risks for the pool, particularly at the lower rating categories, since issuance.

The transaction is concentrated by property type as 16 loans, representing 21.6% of the current trust balance, are secured by retail assets whereas six loans, representing 17.4% of the current trust balance, are secured by hotel assets. Multifamily collateral makes up the second-largest concentration, representing 13 loans and 20.7% of the current trust balance. According to the November 2020 remittance, there are four loans, representing 12.9% of the current trust balance, in special servicing including three loans secured by hotel assets: Crowne Plaza – Hollywood (Prospectus ID#2; 7.3% of the current trust balance), Fairfield Inn & Suites Kansas City (Prospectus ID#25; 1.0% of the current trust balance), and La Quinta Russellville (Prospectus ID#35; 0.7% of the current trust balance). The Crowne Plaza – Hollywood is secured by a 311-room full-service hotel property in Hollywood, Florida, and was transferred to special servicing in April 2020 given the ongoing effects of the coronavirus pandemic. DBRS Morningstar notes that a loan modification has not been agreed upon and the subject recently received an updated appraisal which reported a June 2020 value of $65.8 million (a -26.1% variance from the issuance value of $89.0 million), implying a current loan-to-value ratio of 84.0%. DBRS Morningstar believes that while the subject is not immune to the short-term stressors from the pandemic, the property’s long-term outlook could be more positive than other lodging properties given the subject’s desirable location and anticipated demand for drive-to leisure. Given that short-term demand remains suppressed, DBRS Morningstar analyzed the loan with an elevated probability of default.

As of the October 2020 remittance, 53 of the original 55 loans remain in the pool, representing a collateral reduction of 9.3% since issuance. Three loans, representing 1.2% of the current pool balance, are fully defeased. Additionally, there are 12 loans, representing 43.4% of the current trust balance, on the servicer’s watchlist per the October 2020 remittance. These loans are being monitored for a variety of reasons including low debt service coverage ratio (DSCR), occupancy, and deferred maintenance issues; however, the primary reason for many of the more recent transfers is for hospitality properties with a low DSCR stemming from disruptions related to the coronavirus pandemic. Based on the YE2019 financials, the pool reported a weighted-average DSCR of 1.55 times (x) compared with the issuer’s issuance DSCR of 1.60x.

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-E, X-F, and X-GH 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#2–Crowne Plaza – Hollywood (7.3% of the pool)
-- Prospectus ID#8–1 Emerson Lane (3.9% 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:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is 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.

For more information regarding the structured finance rating approach and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/359905.

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.

Generally, the conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. DBRS Morningstar’s outlooks and ratings are monitored.

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

DBRS, Inc.
22 West Washington Street
Chicago, IL 60602 USA
Tel. +1 312 696-6293

Ratings

  • Date IssuedDebt RatedRatingTrendActionAttributesi
    24-Nov-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class A-2AAA (sf)StbConfirmed
    US
    24-Nov-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class A-3AAA (sf)StbConfirmed
    US
    24-Nov-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class A-4AAA (sf)StbConfirmed
    US
    24-Nov-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class A-SAAA (sf)StbConfirmed
    US
    24-Nov-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class A-SBAAA (sf)StbConfirmed
    US
    24-Nov-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class X-AAAA (sf)StbConfirmed
    US
    24-Nov-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class X-BAAA (sf)StbConfirmed
    US
    24-Nov-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class BAA (low) (sf)StbConfirmed
    US
    24-Nov-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class CA (low) (sf)StbConfirmed
    US
    24-Nov-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class X-DBBB (high) (sf)NegConfirmed
    US
    24-Nov-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class DBBB (sf)NegConfirmed
    US
    24-Nov-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class X-EBBB (sf)NegConfirmed
    US
    24-Nov-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class EBBB (low) (sf)NegConfirmed
    US
    24-Nov-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class X-FBB (high) (sf)NegConfirmed
    US
    24-Nov-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class FBB (sf)NegConfirmed
    US
    24-Nov-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class GB (sf)NegConfirmed
    US
    24-Nov-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class X-GHB (sf)NegConfirmed
    US
    24-Nov-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class HB (low) (sf)NegConfirmed
    US
    More
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Morgan Stanley Bank of America Merrill Lynch Trust 2015-C27
  • US = Lead Analyst based in USA
  • CA = Lead Analyst based in Canada
  • EU = Lead Analyst based in EU
  • UK = Lead Analyst based in UK
  • E = EU endorsed
  • U = UK endorsed
  • Unsolicited Participating With Access
  • Unsolicited Participating Without Access
  • Unsolicited Non-participating

ALL MORNINGSTAR DBRS RATINGS ARE SUBJECT TO DISCLAIMERS AND CERTAIN LIMITATIONS. PLEASE READ THESE DISCLAIMERS AND LIMITATIONS AND ADDITIONAL INFORMATION REGARDING MORNINGSTAR DBRS RATINGS, INCLUDING DEFINITIONS, POLICIES, RATING SCALES AND METHODOLOGIES.

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