DBRS Morningstar Confirms All Classes of Exantas Capital Corp. 2020-RSO8, Ltd.

DBRS, Inc. (DBRS Morningstar) confirmed the ratings on all classes of notes issued by Exantas Capital Corp. 2020-RSO8, Ltd. (the Issuer) as follows:

-- Class A Notes at AAA (sf)
-- Class A-S Notes at AAA (sf)
-- Class B Notes at AA (low) (sf)
-- Class C Notes at A (low) (sf)
-- Class D Notes at BBB (high) (sf)
-- Class E Notes at BBB (low) (sf)
-- Class F Notes at BB (low) (sf)
-- Class G Notes at B (low) (sf)

All trends are Stable.

The ratings confirmations reflect the overall stable performance of the transaction since issuance in March 2020. To date, four loans have been repaid in full, resulting in collateral reduction of 9.0%. As of the January 2021 remittance, the transaction consisted of 28 loans secured by 31 transitional properties, totaling $464.1 million. The bulk of the contributed loans are secured by cash flowing assets that are in a period of transition with plans to stabilize and improve the asset value.

Of the outstanding collateral, 24 loans were structured with future funding, available to the individual borrowers to fund capital improvements and leasing costs to aid in property stabilization. Through January 2021, future funding has been advanced for 16 loans, with those amounts purchased by the Issuer and contributed to the trust, totaling $11.0 million. There is approximately $21.7 million in total available future funding proceeds that has yet to be released to borrowers.

DBRS Morningstar reviewed the Q3 2020 asset status report provided by the collateral manager to analyze the current performance of the collateral and each borrower’s progress in achieving its stated business plan at loan closing. Overall, the properties in the pool are reporting positive progress in towards the respective stabilization goals with improvements in operating cash flow driven by improvement in rental rates and occupancy gains. The collateral is concentrated by property type as there are 19 loans (72.9% of the current pool balance) secured by multifamily properties and five loans (17.6% of the current pool balance) secured by office properties. There are no loans secured by retail properties and only one loan (3.0% of the current pool balance) secured by a hotel property. As of January 2021 reporting, all loans remain current and there is only one loan on the servicer’s watchlist: the lone hotel loan, Hampton Inn Plymouth Meeting (Prospectus ID#16). This loan received a 90-day forbearance from June 2020 through August 2020; however, according to the collateral manager, the borrower has not complied with terms of the forbearance agreement and corrective action options are currently being evaluated.

ESG CONSIDERATIONS
A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/373262.

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#5 – Legacy Bank Plaza (5.5% of the pool)
-- Prospectus ID#16 – Hampton Inn Plymouth Meeting (3.0% 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 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.

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. 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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