Morningstar DBRS Confirms Credit Ratings on All Classes of UBS-Barclays Commercial Mortgage Trust 2012-C4

DBRS Limited (Morningstar DBRS) confirmed its credit ratings on all classes of Commercial Mortgage Pass-Through Certificates, Series 2012-C4 issued by UBS-Barclays Commercial Mortgage Trust 2012-C4 as follows:

-- Class E at CCC (sf)
-- Class F at C (sf)

There are no trends as the CCC (sf) and C (sf) credit ratings categories generally do not carry trends in commercial mortgage-backed securities (CMBS).

Since the last credit rating action, one loan, Evergreen Plaza (Prospectus ID#12; formerly 24.4% of the pool), which was previously in special servicing, was disposed from the trust at no loss as of the January 2024 payment date. As of the November 2024 remittance, two nonperforming matured loans that are secured by real estate owned (REO) assets remain in the pool. Both loans have reported updated appraisal values, which are lower than their respective values that Morningstar DBRS considered at its last review and well below their values at issuance. With this review, Morningstar DBRS analyzed both loans with liquidation scenarios, resulting in losses that remain contained to the lowest-rated Class F certificate. In addition, interest shortfalls continue to accumulate, affecting both remaining rated classes. As of November 2024, interest shortfalls totaled $4.2 million, with approximately $18,000 contained to Class E. Given the expected credit deterioration from a liquidation scenario for both loans and the accumulating interest shortfalls, Morningstar DBRS maintained the CCC (sf) and C (sf) credit ratings on Classes E and F, respectively.

The Newgate Mall loan (Prospectus ID#6; 80.5% of the pool) is secured by the in-line space and two anchor spaces of a single-level regional mall in Ogden, Utah, and has been REO since April 2021. An updated appraisal, dated March 2024, valued the property at $21.8 million, down from the issuance appraised value of $83.0 million, reflecting an as-is loan-to-value ratio (LTV) of 225.1%. For this review, Morningstar DBRS applied a haircut to the most recent value and liquidated the loan, resulting in an implied loss exceeding $40.0 million and a loss severity in excess of 75.0%.

The Fashion Square loan (Prospectus ID#23; 19.5% of the pool) is secured by a mixed-use property in St. Louis, Missouri, consisting of 13,000 square feet (sf) of retail space, 75,000 sf of office space, and 72 multifamily units and has been REO since April 2023. The property was re-appraised in May 2024 at a value of $7.9 million, compared with the issuance value of $25 million, reflecting an as-is LTV of 170.0%. For this review, Morningstar DBRS applied a haircut to the most recent value and liquidated the loan, resulting in an implied loss exceeding $7.0 million and a loss severity in excess of 50.0%.

Morningstar DBRS' credit ratings on the applicable classes address the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. Where applicable, a description of these financial obligations can be found in the transactions' respective press releases at issuance.

Morningstar DBRS' long-term credit ratings provide opinions on risk of default. Morningstar DBRS considers risk of default to be the risk that an issuer will fail to satisfy the financial obligations in accordance with the terms under which a long-term obligation has been issued. The Morningstar DBRS short-term debt rating scale provides an opinion on the risk that an issuer will not meet its short-term financial obligations in a timely manner.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS  
There were no Environmental, Social, or Governance factors 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 Factors in Credit Ratings at (August 13, 2024), https://dbrs.morningstar.com/research/437781.

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 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 info-DBRS@morningstar.com.

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.

Morningstar DBRS notes that a sensitivity analysis was not performed for this review as the transaction is winding down, with only two loans remaining. In such cases, Morningstar DBRS credit ratings are typically based on a recoverability analysis.

Please note a sensitivity analysis is not performed for CMBS bonds rated CCC or lower. The Morningstar DBRS Long-Term Obligation 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)

Morningstar DBRS North American Commercial Real Estate Property Analysis Criteria (September 19, 2024), https://dbrs.morningstar.com/research/439702

North American Commercial Mortgage Servicer Rankings (August 23, 2024), https://dbrs.morningstar.com/research/438283

Legal Criteria for U.S. Structured Finance (October 28, 2024), https://dbrs.morningstar.com/research/441840

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 https://dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.