Morningstar DBRS Downgrades and Then Discontinues Eight Credit Ratings on Four Transactions

DBRS Limited (Morningstar DBRS) downgraded the credit ratings on eight classes across four transactions as follows:

Wells Fargo Commercial Mortgage Trust 2014-LC16 (WFCM 2014-LC16)
-- Class D to D (sf) from C (sf)
-- Class E to D (sf) from C (sf)
-- Class F to D (sf) from C (sf)

WFRBS Commercial Mortgage Trust 2014-C20 (WFRBS 2014-C20)
-- Class D to D (sf) from C (sf)
-- Class E to D (sf) from C (sf)
-- Class F to D (sf) from C (sf)

JPMCC Commercial Mortgage Securities Trust 2015-JP1 (JPMCC 2015-JP1)
-- Class G to D (sf) from CCC (sf)

COMM 2014-UBS2 Mortgage Trust (COMM 2014-UBS2)
-- Class F to D (sf) from C (sf)

In addition, Morningstar DBRS simultaneously discontinued and withdrew the credit ratings on the above-mentioned classes.

The credit ratings downgrade and discontinuation were due to a loss to the respective trusts that was reflected with the March 2023 remittances. The WFCM 2014-LC16 transaction incurred a loss of $74.7 million, wiping out Classes E, F, and G (the latter is nonrated) and eroding $38.5 million of Class D. The WFRBS 2014-C20 transaction incurred a loss of $80.9 million, wiping out Classes E, F, and G (the latter is nonrated) and eroding $19.1 million of Class D. These losses were tied to the liquidation of Woodbridge Center (Prospectus ID#1), a pari passu loan with pieces secured in both transactions. The total loss amount of $155.7 million was lower than Morningstar DBRS' expectation of $205.7 million at the last review.

The JPMCC 2015-JP1 transaction incurred a loss of $8.5 million, wiping out the nonrated Class HR and approximately $333,000 of Class G. This loss was tied to the liquidation of two loans, Franklin Ridge - 9910 Building (Prospectus ID#13) and Franklin Ridge - 9920 Building (Prospectus ID#14). The aggregate loss was above Morningstar DBRS' expectation of $5.0 million at last review.

The COMM 2014-UBS2 transaction incurred a loss of $15.5 million, wiping out the nonrated Class G and eroding $4.5 million of Class F. No loans were liquidated, but it appears that the loss may be tied to "other interest loss" as noted in the March 2023 remittance. Morningstar DBRS has requested clarification from the servicer, and a response is currently pending. Morningstar DBRS will continue to monitor for developments.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS   
There were no Environmental/Social/Governance factor(s) that had a significant or relevant effect on the credit analysis.

A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at (January 23, 2024), https://dbrs.morningstar.com/research/427030.

All credit ratings are subject to surveillance, which could result in credit ratings being upgraded, downgraded, placed under review, confirmed, or discontinued by Morningstar DBRS.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is the North American CMBS Surveillance Methodology (March 1, 2024), https://dbrs.morningstar.com/research/428798.

Other methodologies referenced in this transaction are listed at the end of this press release.

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 credit rating was initiated at the request of the rated entity.

The rated entity or its related entities did participate in the credit rating process for this credit rating action.

Morningstar DBRS had access to the accounts, management, and other relevant internal documents of the rated entity or its related entities in connection with this credit rating action.

This is a solicited credit rating.

Please note a sensitivity analysis is not performed for CMBS bonds rated CCC or lower. The Morningstar DBRS Long-Term Obligations Rating Scale definition indicates that credit 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.

DBRS Limited
DBRS Tower, 181 University Avenue, Suite 700
Toronto, ON M5H 3M7 Canada
Tel. +1 416 593-5577

The credit rating methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.

-- North American CMBS Multi-Borrower Rating Methodology (March 1, 2024)/North American CMBS Insight Model v 1.2.0.0 https://dbrs.morningstar.com/research/428797
-- Rating North American CMBS Interest-Only Certificates (December 13, 2023), https://dbrs.morningstar.com/research/425261
-- DBRS Morningstar North American Commercial Real Estate Property Analysis Criteria (September 22, 2023), https://dbrs.morningstar.com/research/420982
-- North American Commercial Mortgage Servicer Rankings (August 23, 2023), https://dbrs.morningstar.com/research/419592
-- Legal Criteria for U.S. Structured Finance (December 7, 2023), https://dbrs.morningstar.com/research/425081

A description of how Morningstar DBRS analyzes structured finance transactions and how the methodologies are collectively applied can be found at: https://dbrs.morningstar.com/research/417279.

For more information on this credit or on this industry, visit dbrs.morningstar.com or contact us at [email protected].