SYS-CON MEDIA Authors: Roberto Medrano, Dmitriy Stepanov, Gilad Parann-Nissany, Sean Houghton, Glenn Rossman

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Morningstar Credit Ratings Assigns Preliminary Ratings for Wells Fargo Commercial Mortgage Trust 2014-TISH, Commercial Mortgage Pass-Through Certificates, Series 2014-TISH (WFCM 2014-TISH)

NEW YORK, March 17, 2014 /PRNewswire/ -- Morningstar Credit Ratings, LLC today assigned preliminary ratings for the commercial mortgage-backed securities (CMBS) transaction Wells Fargo Commercial Mortgage Trust 2014-TISH, Commercial Mortgage Pass-Through Certificates, Series 2014-TISH (WFCM 2014-TISH). The preliminary ratings are based on information known to Morningstar as of March 17, 2014.

Preliminary Ratings (as of March 17, 2014)

 

Class

Balance/

Notional Amt

Preliminary

Ratings

Morningstar Debt Yield

Morningstar BLTV

Morningstar ELTV

Credit Support Levels

Class A

$168,100,000

AAA

29.0%

28.5%

28.5%

38.335%

Class X-1

$272,600,000

AAA

N/A

N/A

N/A

N/A

Class X-2

$272,600,000

AAA

N/A

N/A

N/A

N/A

Class B

$59,940,000

AA

21.4%

38.6%

38.6%

16.346%

Class C

$44,560,000

A

17.9%

46.2%

46.2%

0.00%

Class WTS-1

$32,807,000

BBB

13.9%

56.8%

56.8%

N/A

Class WTS-2

$27,193,000

BB

12.1%

65.3%

65.3%

N/A

Class SCH-1

$26,124,000

BBB

15.7%

55.4%

55.4%

N/A

Class SCH-2

$22,276,000

BB+

13.7%

63.7%

63.7%

N/A

The key characteristics of the mortgage loan collateral supporting WFCM Trust 2014-TISH are:

  • Two non-cross-collateralized, non-cross defaulted two-year floating rate mortgage loans, each subject to three successive one-year extension options. The mortgage loans are secured by the borrower's leasehold interest in two full-service hotels, the Westin New York at Times Square and the Sheraton Chicago Hotel & Towers; and
  • The aggregate principal balance of the first mortgage loan, which is collateral for the trust, is $381.0 million.

Based on information provided on the arranger's website, Morningstar's analysis of the loans yielded the following Morningstar metrics:

  • An aggregate net cash flow (NCF) of approximately $48.8 million, which is lower than the arranger's NCF by 5.6 percent;
  • The loan provides for a weighted-average current debt service coverage ratio (DSCR) of 6.00x based upon the current interest rates and LIBOR. Based upon the Morningstar-stressed LIBOR rate of 3.0 percent, its DSCR is more conservative at 2.56x;
  • Morningstar valued the property using the direct capitalization method with its final aggregate value of approximately $590.2 million, calculated using a weighted-average capitalization rate of 8.26 percent; and
  • The Morningstar value, which equates to $282,785 per room, is 38.5 percent lower than the appraised property value of $960.0 million. The Morningstar valuation resulted in a weighted-average loan-to-value ratio (LTV) of 64.6 percent for the first mortgage loan.

For complete details about the preliminary ratings of this transaction, Morningstar's Pre-Sale analysis package, including the Pre-Sale Report and the Representations, Warranties, and Enforcement Mechanisms, is available under the "Ratings Reports" tab on https://ratingagency.morningstar.com. Information subsequently received could result in the assignment of final ratings that differ from the preliminary ratings.

About Morningstar Credit Ratings, LLC and Morningstar, Inc.
Morningstar Credit Ratings, LLC is a Nationally Recognized Statistical Rating Organization (NRSRO) that specializes in structured credit research and ratings, and offers a wide array of services including new-issue ratings and analysis, operational risk assessments, surveillance services, data, and technology solutions.

Morningstar Credit Ratings, LLC is a subsidiary of Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research in North America, Europe, Australia, and Asia.

Morningstar, Inc. offers an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. Morningstar provides data on approximately 446,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 10 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its registered investment advisor subsidiaries and had approximately $159 billion in assets under advisement and management as of Dec. 31, 2013. The company has operations in 27 countries.

Morningstar, Inc. is not an NRSRO and its credit ratings on corporate and municipal issuers are not NRSRO credit ratings.

©2014 Morningstar, Inc. All Rights Reserved.

MORN-R

Media Contacts:
Michelle Weiss, +1 267-960-6014 or [email protected]
Nadine Youssef, +1 312-696-6601 or [email protected]

SOURCE Morningstar, Inc.

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