DBRS Confirms Ratings for Taurus 2013 (GMF1) PLC

DBRS, Inc. (DBRS) has today confirmed the ratings on the following classes of Commercial Real Estate Loan Backed Floating-Rate Notes due 2024 issued by Taurus 2013 (GMF1) PLC:

-- Class A at AAA (sf)
-- Class B at AA (sf)
-- Class C at A (sf)
-- Class D at BBB (sf)
-- Class E at BBB (low) (sf)
-- Deferred Arrangement Certificates at A (sf)

All trends are Stable.

The transaction consists of two fixed-rate loans and two floating-rate loans, which as of the February 2015 quarterly reporting, had a total balance of EUR 1,042,211,788, representing a collateral reduction of 3.0% since issuance in May 2013. The loans are cross-collateralized and cross defaulted, and each has its own borrower and guarantor, all an affiliate of the sponsor, GAGFAH S.A. (GAGFAH).

As of YE2014, the collateral portfolio consisted of 36,717 residential units, 829 commercial units, 5,623 parking units and 1,982 other units, with the residential and commercial units comprising a total leasable area of 2,144,389 square metres. Since issuance, 859 residential units have been sold, 47 commercial units have been sold, 20 parking units have been sold and 14 other units have been added as collateral. The portfolio reported financial vacancy of 4.3%, down from 5.0% at YE2013. Financial performance remains stable as the portfolio reported YE2013 cash flow of EUR 93.19 million, an increase of 5.0% compared with YE2013 figures. The resulting YE2014 debt service coverage ratio was 1.99 times (x). The collateral was valued at EUR 1.74 billion at YE2014, a decrease of 2.6% compared with the YE2013 valuation, as a result of a decrease in total collateralized units.

The portfolio collateral is primarily located in Dresden, Germany, as over 98.0% of the residential and commercial units are within city limits. As of December 2014, these units accounted for over 98% of the portfolio’s total cold rent and had financial vacancy rates of 3.6% and 9.3%, respectively. GAGFAH is an experienced owner and manager of multifamily residential real estate in Germany and has a portfolio of approximately 185,000 residential units, with its largest concentration of units located in Dresden (approximately 37,000 units). It maintains one of its two regional offices and four customer centres in Dresden.

Notes:
All figures are in euros unless otherwise noted.

The applicable methodologies are European CMBS Rating Methodology, European CMBS Surveillance, Legal Criteria for European Structured Finance Transactions and Unified Interest Rate Model for European Securitisations, which can be found on our website under Methodologies.

This rating is endorsed by DBRS Rating Limited for use in the European Union.

The sources of information used for this rating include Situs Asset Management Limited. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

The last rating action on this transaction took place on May 19, 2014.

To assess the impact of changing the transaction parameters on the rating, DBRS considered the following stress scenarios as compared with the parameters used to determine the rating (the Base Case):

A decrease of 10% and 20% in the DBRS NCF, derived by looking at comparable properties, market rents, market occupancies in addition to expenses ratios, capital expenditures and re-tenanting costs, would lead to the following ratings in the transaction, as noted below for each class respectively:

Class A Notes Risk Sensitivity:
-- 10% decline in DBRS NCF, expected rating of Class A at AAA (sf)
-- 20% decline in DBRS NCF, expected rating of Class A at AA (high) (sf)

Class B Notes Risk Sensitivity:
-- 10% decline in DBRS NCF, expected rating of Class B at AA (sf)
-- 20% decline in DBRS NCF, expected rating of Class B at BBB (high) (sf)

Class C Notes Risk Sensitivity:
-- 10% decline in DBRS NCF, expected rating of Class C at BBB (sf)
-- 20% decline in DBRS NCF, expected rating of Class C at BB (high) (sf)

Class D Notes Risk Sensitivity:
-- 10% decline in DBRS NCF, expected rating of Class D at BBB (low) (sf)
-- 20% decline in DBRS NCF, expected rating of Class D at B (high) (sf)

Class E Notes Risk Sensitivity:
-- 10% decline in DBRS NCF, expected rating of Class E at BB (sf)
-- 20% decline in DBRS NCF, expected rating of Class E at B (sf)

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