Morningstar DBRS Confirms Credit Ratings on All Classes of BWAY Commercial Mortgage Securities Trust 2013-1515

DBRS Limited (Morningstar DBRS) confirmed its credit ratings on the Commercial Mortgage Pass-Through Certificates, Series 2013-1515 issued by BWAY Commercial Mortgage Securities Trust 2013-1515 as follows:

-- Class A1 at AAA (sf)
-- Class A2 at AAA (sf)
-- Class X-A at AAA (sf)
-- Class B at AA (high) (sf)
-- Class C at AA (low) (sf)
-- Class D at A (sf)
-- Class X-B at A (sf)
-- Class E at A (low) (sf)
-- Class F at BBB (sf)
-- Class G at BBB (low) (sf)

All trends are Stable.

The credit rating confirmations reflect the overall stable performance of the underlying collateral, which remains in line with Morningstar DBRS' expectations since its previous credit rating action in April 2024. The property remains 100% occupied, the majority of which is leased by Paramount, an investment-grade tenant, on a lease through 2031. Despite the consistent performance, the loan was transferred to special servicing in October 2024 because of imminent monetary default and was modified shortly thereafter to extend its maturity date for one year to March 2026. In its analysis for this review, Morningstar DBRS maintained its loan-to-value ratio (LTV) sizing, the results of which support the credit rating confirmations.

The transaction is collateralized by a $739.1 million loan secured by the fee interest in a Class A, 1.7 million-square-foot office tower in the heart of Times Square, within the Midtown Manhattan submarket of New York City, and is sponsored by SL Green. The property serves as Paramount's (86.5% of net rentable area, lease expires June 2031) headquarters and remains 100% occupied as of the September 2024 rent roll. In August 2024, Paramount announced that it would cut 15% of its U.S. workforce, including several hundred employees at the subject. While Paramount's appetite for office space may be diminished, notably its lease is not structured with a termination option.

The loan transferred to special servicing in October 2024 after the borrower indicated it would not be able to refinance the loan at its March 2025 maturity date. A loan modification was executed in November 2024, which extended the maturity date one year to March 2026 and allows for two additional, one-year extension options provided certain debt yield hurdles are met and scheduled principal curtailments are made. As a condition to the modification, the borrower provided an additional $20.0 million of cash equity and a full cash sweep was implemented. According to the trailing 12-month ended September 30, 2024, financials, the loan reported a net cash flow (NCF) of $88.3 million, in line with YE2023 figures and surpassing the Morningstar DBRS NCF of $80.5 million derived in April 2024. According to servicer commentary, excess cash of approximately $20.0 million is expected to be trapped by March 2025.

In the analysis for this review, Morningstar DBRS maintained its value calculation for the subject, applying a 10.0% haircut to the YE2023 NCF with a capitalization rate of 7.25%, resulting in a Morningstar DBRS value of $1.1 billion (LTV of 66.7%). To further test the durability of the current credit ratings, Morningstar DBRS applied a conservative 20.0% stress to the YE2023 NCF. The LTV-sizing benchmarks resulting from that stressed analysis continued to support the credit rating confirmations. Morningstar DBRS maintained positive qualitative adjustments to the LTV-sizing benchmarks totaling 4.0%, which included a 2.0% adjustment for cash flow volatility given the long-term lease with an investment-grade rated tenant, a 1.0% adjustment for property quality, and a 1.0% adjustment for market fundamentals as the Midtown West submarket reports a Q3 2024 vacancy rate of 12.9% according to Reis.

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/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 Factors in Credit Ratings (August 13, 2024), https://dbrs.morningstar.com/research/437781.

Classes X-A and X-B are interest-only (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 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 (December 13, 2024), https://dbrs.morningstar.com/research/444617.

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 ratings were initiated at the request of the rated entity.

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

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

These are solicited credit ratings.

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the credit rating process.

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 Single-Asset/Single-Borrower Ratings Methodology (December 13, 2024) https://dbrs.morningstar.com/research/444612
-- Morningstar DBRS North American Commercial Real Estate Property Analysis Criteria (September 19, 2024) https://dbrs.morningstar.com/research/439702
-- Legal Criteria for U.S. Structured Finance (December 3, 2024) https://dbrs.morningstar.com/research/444064
-- North American Commercial Mortgage Servicer Rankings (August 23, 2024) https://dbrs.morningstar.com/research/438283

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.