Fitch Ratings has issued a presale report to Deutsche Bank Securities, Inc.'s COMM 2014-UBS6 Mortgage Trust Commercial Pass-Through Certificates.
Fitch expects to rate the transaction and assign Rating Outlooks as follows:
--$57,028,000 class A-1 'AAAsf'; Outlook Stable;
--$102,973,000 class A-2 'AAAsf'; Outlook Stable;
--$22,897,000 class A-3 'AAAsf'; Outlook Stable;
--$97,350,000 class A-SB 'AAAsf'; Outlook Stable;
--$275,000,000 class A-4 'AAAsf'; Outlook Stable;
--$337,653,000 class A-5 'AAAsf'; Outlook Stable;
--$990,164,000* class X-A 'AAAsf'; Outlook Stable;
--$97,263,000b class A-M 'AAAsf'; Outlook Stable;
--$57,400,000b class B 'AA-sf'; Outlook Stable;
--$220,037,000b class PEZ 'A-sf'; Outlook Stable;
--$65,374,000b class C 'A-sf'; Outlook Stable;
--$122,774,000*a class X-B 'A-sf'; Outlook Stable;
--$60,589,000*a class X-C 'BBB-sf'; Outlook Stable;
--$33,484,000*a class X-D 'BB-sf'; Outlook Stable;
--$60,589,000a class D 'BBB-sf'; Outlook Stable;
--$12,756,000a class E 'BB+sf'; Outlook Stable;
--$20,728,000a class F 'BB-sf'; Outlook Stable.
Notional amount and interest-only.
a Privately placed pursuant to Rule 144A.
b class A-M, B and C certificates may be exchanged for class PEZ certificates; and class PEZ certificates may be exchanged for class A-M, B and C certificates.
The expected ratings are based on information provided by the issuer as of Nov. 13, 2014. Fitch does not expect to rate the $68,562,796 interest-only class X-E, $28,701,000 class G, or the $39,861,796 class H.
The certificates represent the beneficial ownership in the trust, primary assets of which are 89 loans secured by 267 commercial properties having an aggregate principal balance of approximately $1.3 billion as of the cutoff date. The loans were contributed to the trust by UBS Real Estate Securities Inc., German American Capital Corporation, Jefferies LoanCore LLC, Cantor Commercial Real Estate Lending, L.P., KeyBank, N.A., and Pillar Funding LLC.
Fitch reviewed a comprehensive sample of the transaction's collateral, including site inspections on 64.4% of the properties by balance, cash flow analysis of 76.2%, and asset summary reviews on 76.2% of the pool.
KEY RATING DRIVERS
Fitch Leverage: This transaction has slightly lower leverage than other recent Fitch-rated fixed-rate deals. The pool's Fitch DSCR of 1.23x is higher than the average of the first three quarters of 2014 Fitch DSCR of 1.19x, and the pool's Fitch LTV of 105.9% is in line with the average of the first three quarters of 2014 Fitch LTV of 105.6%.
Low Pool Concentration: The pool is less concentrated compared to recently rated deals, with the top 10 loan exposures representing 37.4% of the total pool balance, which is below the average of the first three quarters of 2014 top 10 concentration of 52.5%. Additionally, 11 loans representing 27.1% of the total pool balance are secured by multiple assets.
Non-Traditional Properties: The fourth largest loan in the pool (3.7% of the pool by balance) is secured by a portfolio of convenience stores and gas stations. Additionally, two loans totaling 0.7% of the pool are secured by airport parking lots. Fitch applied higher asset volatility scores and additional severity stresses to the non-traditional properties.
RATING SENSITIVITIES
For this transaction, Fitch's net cash flow (NCF) was 20.2% below the most recent NOI (for properties that a recent NOI was provided, excluding properties that were stabilizing during this period). Unanticipated further declines in property-level NCF could result in higher defaults and loss severities on defaulted loans, and could result in potential rating actions on the certificates. Fitch evaluated the sensitivity of the ratings assigned to COMM 2014-UBS6 certificates and found that the transaction displays average sensitivity to further declines in NCF. In a scenario in which NCF declined a further 20% from Fitch's NCF, a downgrade of the junior 'AAAsf' certificates to 'A-sf' could result. In a more severe scenario, in which NCF declined a further 30% from Fitch's NCF, a downgrade of the junior 'AAAsf' certificates to 'BBB-sf' could result. The presale report includes a detailed explanation of additional stresses and sensitivities on pages 89 90.
The master servicers will be KeyBank, N.A., rated 'CMS1' by Fitch. The special servicers will be Midland Loan Services, Inc., rated 'CSS1' by Fitch.
The presale report is available at 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions' (June 2014);
--'Global Structured Finance Rating Criteria' (May 2014);
--'Rating Criteria for U.S. Commercial Mortgage Servicers' (August 2014);
--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (December 2013);
--'Environmental Site Assessments and Environmental Insurance in U.S. CMBS Transactions' (December 2009).
Applicable Criteria and Related Research: COMM 2014-UBS6 Mortgage Trust (US CMBS)
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=814568
Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748778
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389
Rating Criteria for U.S. Commercial Mortgage Servicers
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=735382
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724961
Environmental Site Assessments and Environmental Insurance in U.S. CMBS Transactions
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=491138
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=926035
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Fitch Ratings
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Abigail Kagan
Analyst
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Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10004
or
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Derek Shimeck
Analyst
+1 312-368-3192
or
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or
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