DBRS Confirms Ratings on MSBAM Commercial Mortgage Securities Trust 2014-C19

DBRS Limited (DBRS) confirmed the ratings for all classes of Commercial Mortgage Pass-Through Certificates, Series 2014-C19 issued by Morgan Stanley Bank of America Merrill Lynch Trust 2014-C19 as follows:

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class A-3 at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class A-S at AAA (sf)
-- Class A-SB at AAA (sf)
-- Class X-A at AAA (sf)
-- Class X-B at AA (high) (sf)
-- Class B at AA (sf)
-- Class X-C at A (sf)
-- Class C at A (low) (sf)
-- Class PST at A (low) (sf)
-- Class X-D at BBB (sf)
-- Class D at BBB (low) (sf)
-- Class X-E at BB (sf)
-- Class E at BB (low) (sf)
-- Class X-F at B (sf)
-- Class F at B (low) (sf)

All trends are Stable. DBRS does not rate the first loss piece, Class G.

The rating confirmations reflect the overall stable performance of the transactions. At issuance, the collateral consisted of 77 fixed-rate loans secured by 114 commercial properties. As of the November 2017 remittance, 76 loans remained in the pool with an aggregate principal balance of $1.44 billion, representing a collateral reduction of 1.9% since issuance as a result of the unscheduled repayment of one loan and scheduled loan amortization. There are currently ten loans (25.6% of the pool) with remaining interest-only (IO) periods, ranging from one to 36 months, while seven loans (20.8% of the pool) are structured with full IO terms. Two loans (0.8% of the pool) are secured by collateral that was fully defeased. To date, 69 loans (96.7% of the pool) reported partial-year 2017 financials, while 73 loans (98.8% of the pool) reported YE2016 financials. Based on the most recent year-end financial reporting, the transaction had a weighted-average (WA) debt service coverage ratio (DSCR) and WA Debt Yield of 1.74 times (x) and 9.7%, respectively, compared with the DBRS WA Term DSCR and WA Debt Yield of 1.58x and 8.6%, respectively.

The pool is concentrated by property type, as 16 loans, representing 34.9% of the pool, are secured by office properties, while 26 loans (24.6% of the pool) are secured by retail properties, 9 loans (17.1% of the pool) are secured by multifamily properties and 17 loans (16.4% of the pool) are secured by hotel properties. By loan size, the pool is also concentrated, as the top 15 loans represent 64.8% of the pool. Based on the most recent cash flows available, the top 15 loans reported a WA DSCR of 1.87x, compared with the WA DBRS Term DSCR of 1.61x, which is reflective of the 17.2% net cash flow growth over the DBRS issuance figures.

As of the November 2017 remittance, there are eight loans (10.7% of the pool) on the servicer watchlist. The largest loan on the watchlist, the One&Only Ocean Club (Prospectus ID#8, 3.8% of the pool), has been on the watchlist since November 2015. According to the servicer, the loan is on the watchlist for delinquent property taxes. The servicer is monitoring the situation. The third largest loan on the servicer’s watchlist has been flagged because of damage sustained during the recent hurricane season; business interruption proceeds are being processed. Of the remaining six loans, two loans (3.6% of the net rentable area (NRA)) were flagged because of the near-term tenant rollover, three loans (1.3% of the NRA) were flagged because of performance declines (all three loans are secured by hotel properties) and one loan (0.6% of the pool) was flagged because of deferred maintenance.

Classes X-A, X-B, X-C, X-D, X-E and X-F are IO certificates that reference a single rated tranche or multiple rated tranches. The IO ratings mirror the lowest-rated reference tranche adjusted upward by one notch if senior in the waterfall.

All ratings will be subject to ongoing surveillance, which could result in ratings being upgraded, downgraded, placed under review, confirmed or discontinued by DBRS.

DBRS has provided updated loan-level commentary and analysis for larger and/or pivotal watchlisted loans in the transaction, as well as the top 15 loans where updated performance information from issuance was available, in the DBRS Viewpoint platform. Registration is free. To view these and future loan-level updates provided as part of DBRS’s ongoing surveillance for this transaction, please register or log into DBRS Viewpoint at viewpoint.dbrs.com.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is CMBS North American Surveillance, which can be found on dbrs.com under Methodologies. For a list of the Structured Finance-related methodologies that may be used during the rating process, please see the DBRS Global Structured Finance Related Methodologies document on www.dbrs.com. Please note that not every related methodology listed under a principal Structured Finance asset class methodology may be used to rate or monitor an individual structured finance or debt obligation.

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.com.

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

The rated entity or its related entities did participate initially in the rating process for this rating action. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.