Morningstar DBRS Changes Trends on Two Classes of Morgan Stanley Bank of America Merrill Lynch Trust 2014-C18 to Stable From Negative, Confirms All Credit Ratings

DBRS, Inc. (Morningstar DBRS) confirmed credit ratings on the following classes of Commercial Mortgage Pass-Through Certificates, Series 2014-C18 issued by Morgan Stanley Bank of America Merrill Lynch Trust 2014-C18 as follows:

-- Class X-B at BBB (low) (sf)
-- Class D at BB (high) (sf)
-- Class E at CCC (sf)
-- Class F at C (sf)

Additionally, Morningstar DBRS changed the trends on Class X-B and Class D to Stable from Negative. Class E and Class F do not carry a trend as these classes have credit ratings that typically do not carry trends in commercial mortgage-backed securities (CMBS) credit ratings.

The credit rating confirmations and Stable trends reflect the loss expectations through the repayment and/or disposition of the three remaining loans in the pool. The original deal balance of $1.03 billion was reduced to just under $51.0 million as of the March 2025 remittance, with two of the three remaining loans past their respective 2024 maturity dates and in special servicing and the performing loan, backed by a retail property in Fairfax, VA (Prospectus ID #9, Turnpike Shopping Center, 53.1% of the pool), scheduled to mature in July 2026. Both specially serviced loans are backed by office property types in San Francisco (Prospectus ID #16, 25 Taylor, 33.2% of the pool) and the Washington, D.C. suburb of Chantilly, VA (Prospectus ID #31, Lafayette Center, 13.7% of the pool). In the liquidation scenarios for both loans, a 30.0% haircut was applied to the 2024 appraised values, with a loss severity of 79.0% for the 25 Taylor loan and a loss severity of 48% for the Lafayette Centre loan.

Total projected liquidated losses of $16.7 million would erode the remainder of the unrated Class G certificate and most of the Class F certificate, supporting the C (sf) credit rating for that class. The implied reduction in credit support, as well as the long-term history of outstanding interest shortfalls through the Class E certificate, supported the credit rating confirmations for Class D and Class E. Although Morningstar DBRS expects the Class D will be fully repaid, the unknown resolution timeline for the two specially serviced loans was also considered as part of the credit rating confirmation for that class, as the servicer could decide to withhold interest payments across the capital stack if property values further deteriorate or other risks become elevated through the remainder of the life of the deal. The trends for Class X-B and Class D were changed to Stable as interest shortfalls are expected to remain contained to the Class E certificate for the next 12 months.

The largest remaining loan in the pool, Turnpike Shopping Center, benefits from a stable occupancy and cash flow history for the collateral retail property, which is well located within a densely populated suburban area. The largest tenants are all national brands and include Ross Dress for Less, PetSmart and Dollar Tree. None of the top three tenants are scheduled to expire until three years past the loan maturity, in 2029. As of the YE2024 financials, the servicer reported net cash flow (NCF) of $2.9 million, compared with the Issuer's NCF figure of $2.6 million. The property's occupancy rate was reported at 95.0% for the period, up from a low of 86.0% reported for YE2021. The debt service coverage ratio (DSCR) at YE2024 was healthy, at 1.46 times (x), compared with 1.40x at YE2023 and the Issuer's DSCR of 1.27x. Given the tenant composition, favorable location, and generally stable operating performance over the last several years, Morningstar DBRS expects the loan will repay at or near the scheduled 2026 maturity date.

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 (August 13, 2024): https://dbrs.morningstar.com/research/437781.

Class X-B is an interest-only (IO) certificate that references 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 (February 28, 2025): https://dbrs.morningstar.com/research/448963

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

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.

For more information on Morningstar DBRS' policy regarding the solicitation status of credit ratings, please refer to the Credit Ratings Global Policy, which can be found in the Morningstar DBRS Understanding Ratings section of the website: https://dbrs.morningstar.com/understanding-ratings.

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the credit rating process. 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, Inc.
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Chicago, IL 60602 USA
Tel. +1 312 332-3429

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 (April 9, 2025)/North American CMBS Insight Model v 1.3.0.0:
https://dbrs.morningstar.com/research/451739
-- 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

For more information on this credit or on this industry, visit https://dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.