DBRS Morningstar Publishes Updated North American SASB Ratings Methodology and European CMBS Rating and Surveillance Methodology, Archives Two Credit Tenant Lease Appendixes

DBRS Morningstar published two updated commercial mortgage-backed securities (CMBS) methodologies as follows:

-- “North American Single-Asset/Single-Borrower Ratings Methodology” (October 19, 2023); and
-- “European CMBS Rating and Surveillance Methodology” (October 19, 2023).

The updates supersede the following previous versions:

-- “North American Single-Asset/Single-Borrower Ratings Methodology” (February 23, 2023); and
-- “European CMBS Rating and Surveillance Methodology” (December 14, 2022).

Previously, DBRS Morningstar finalized its “Global Methodology for Rating Credit Tenant Leases” (the Credit Tenant Lease (CTL) Methodology) on October 11, 2023. The CTL Methodology supersedes the following appendixes to the methodologies published on the dates below:

-- “North American Single-Asset/Single-Borrower Ratings Methodology” (Appendix B—Credit Tenant Leases (CTLs)), published on February 23, 2023.
-- “European CMBS Rating and Surveillance Methodology” (Appendix G: Credit Tenant Leases), published on December 14, 2022.

Existing and new CTL transactions are now subject to the CTL Methodology and accordingly, DBRS Morningstar has subsequently archived these two appendices with the finalization of the CTL Methodology.

The updates are effective as of October 19, 2023. Certain CTL transactions have been placed Under Review with Developing Implications. These are CTL transactions where the rated notes do not fully amortize during the corresponding lease terms for the credit tenant(s) (a single-asset/single-borrower quasi-CTL transaction). The credit ratings were placed Under Review with Developing Implications until a full review can be completed in the upcoming months.

Notes:
The DBRS Morningstar Sovereign group releases baseline macroeconomic scenarios for rated sovereigns. DBRS Morningstar analysis considered impacts consistent with the baseline scenarios as set forth in the following report: https://www.dbrsmorningstar.com/research/384482.

DBRS Morningstar methodologies are publicly available on its website www.dbrsmorningstar.com under Methodologies & Criteria.

For more information on this methodology or on this industry, visit www.dbrsmorningstar.com or contact us at [email protected]