DBRS Morningstar Confirms Ratings on All Classes of BANK 2020-BNK26

DBRS Limited (DBRS Morningstar) confirmed the ratings on all classes of the Commercial Mortgage Pass-Through Certificates, Series 2020-BNK26 issued by BANK 2020-BNK26 as follows:

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class A-3 at AAA (sf)
-- Class A-3-1 at AAA (sf)
-- Class A-3-2 at AAA (sf)
-- Class A-3-X1 at AAA (sf)
-- Class A-3-X2 at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class A-4-1 at AAA (sf)
-- Class A-4-2 at AAA (sf)
-- Class A-4-X1 at AAA (sf)
-- Class A-4-X2 at AAA (sf)
-- Class X-A at AAA (sf)
-- Class A-S at AAA (sf)
-- Class A-S-1 at AAA (sf)
-- Class A-S-2 at AAA (sf)
-- Class A-S-X1 at AAA (sf)
-- Class A-S-X2 at AAA (sf)
-- Class A-SB at AAA (sf)
-- Class B at AA (high) (sf)
-- Class X-B A (high) (sf)
-- Class C at A (sf)
-- Class X-D at BBB (high) (sf)
-- Class D at BBB (high) (sf)
-- Class E at BBB (sf)
-- Class X-F at BBB (low) (sf)
-- Class F at BB (high) (sf)
-- Class X-G at BB (low) (sf)
-- Class G at B (high) (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction since issuance. As of the February 2021 remittance, there has been a negligible collateral reduction, with all 75 original loans remaining in the pool. The pool is fairly concentrated by property type with 37.4% of the pool secured by office properties and 20.9% of the pool secured by retail properties. Also, 4.3% of the current pool balance is secured by co-operative properties, which benefit from very low leverage profiles.

According to the February 2021 remittance, there is one loan in special servicing, Forsyth Multifamily Portfolio (Prospectus ID#20; 1.6% of the pool), which transferred to special servicing in December 2020. That loan is secured by a portfolio of three mixed-use buildings (multifamily with ground floor retail) in New York City that have been negatively affected by the Coronavirus Disease (COVID-19) pandemic. The servicer reported that a relief request submitted by the borrower is under review and, as of the February 2021 remittance, the loan was reported 90+ days delinquent as the loan was most recently paid in October 2020. For additional information on this loan, please see the DBRS Morningstar loan commentary on the DBRS Viewpoint platform.

There are 14 loans on the servicer’s watchlist, representing 13.3% of the current pool balance. The watchlisted loans are being monitored for cash management provisions that have been triggered by recent performance events, low debt service coverage ratios (DSCRs), and/or occupancy issues generally caused by disruptions related to the coronavirus pandemic.

The largest watchlist loan is the AD1 Hotel Portfolio loan (Prospectus ID#7; 4.0% of the current pool balance), which is secured by a portfolio of six lodging properties. The properties are located in suburban and tertiary markets across Connecticut, Georgia, and Florida. The loan was added to watchlist in May 2020 because of decline in performance driven by the coronavirus pandemic. As of Q2 2020, the DSCR was 1.09 times (x), with portfolio occupancy reported at 54.5%. These figures compare with the DBRS Morningstar DSCR and occupancy figures at issuance of 1.47x and 72.1%, respectively. The loan has been reported as late as 90 days delinquent within the last year, with the January and February 2021 reporting periods showing the loan less than 30 days delinquent. The servicer’s commentary does not indicate that a formal relief request has been made by the borrower to date. For additional information, please see the DBRS Morningstar loan commentary on the DBRS Viewpoint platform.

At issuance, DBRS Morningstar shadow-rated five loans, representing 23.1% of the current pool balance, as investment grade. These loans include Bravern Office Commons (Prospectus ID#2; 6.3% of the pool), 560 Mission Street (Prospectus ID#3; 5.9% of the pool), 55 Hudson Yards (Prospectus ID#6; 4.7% of the pool), 1633 Broadway (Prospectus ID#8; 3.3% of the pool), and Bellagio Hotel and Casino (Prospectus ID#9; 2.9% of the pool). With this review, DBRS Morningstar confirms that the performance of these loans remains consistent with investment-grade loan characteristics.

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.

Classes X-A, X-B, X-D, X-F, and X-G are 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#7 – AD1 Hotel Portfolio (4.0% of the pool)
-- Prospectus ID#20 – Forsyth Multifamily Portfolio (1.6% 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:
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 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.

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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