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Fitch Assigns Final Ratings to DBCCRE 2014-ARCP Mortgage Trust Comm'l Mtge P-T Ctfs Series 2014-ARCP

February 4, 2014

Fitch Ratings has assigned the following ratings and Rating Outlooks to the DBCCRE 2014-ARCP Mortgage Trust Commercial Mortgage Pass-Through Certificates: -- $345,400,000 class A 'AAAsf'; Outlook Stable. The following classes are not rated: -- $417,390,000 * class X; -- $71,990,000 class B; -- $53,970,000 class C; -- $59,077,000 class D; -- $63,733,000 class E; -- $25,830,000 class F. * Notional and interest-only. The DBCCRE 2014- ARCP Mortgage Trust Commercial Mortgage Pass - Through Certificates represent the beneficial interest in a trust that holds a 10-year, fixed-rate, interest-only $620 million mortgage loan secured by the fee and leasehold interests in 82 office, retail, and industrial properties with a total of 7.2 million square feet (sf) located in 30 states and Puerto Rico . Proceeds from the loan were used to recapitalize the portfolio as the sponsor, American Realty Capital Properties, Inc. (ARCP), purchased all of the collateral assets within the last 18 months using cash equity and existing unsecured credit facilities. The certificates will follow a sequential-pay structure. KEY RATING DRIVERS Moderately Leveraged Transaction: The loan has a Fitch stressed debt service coverage ratio (DSCR) and loan to value (LTV) of 1.05x and 86.6 percent, respectively. The properties were all acquired by the sponsor over the past 18 months at a total acquisition cost of approximately $980.1 million (implying an all-in loan-to-cost ratio of 63.3 percent). Diverse and Granular Pool : The loan is secured by 82 commercial properties including 68 retail, nine office and five industrial assets. The properties are located in 30 states and Puerto Rico and are occupied by 24 distinct tenants in 14 different industries. No state represents more than 16.5 percent of total portfolio value and only three states represent more than 10 percent of the total portfolio value. Tenant Credit Quality: 66.3 percent of Fitch's total revenue is leased to tenants rated investment grade (BBB- or higher). An additional 20.8 percent of Fitch's total revenue is leased to tenants that are rated between B- and BB+. The remaining 12.9 percent of the portfolio is leased to nationally recognized tenants. Nonrated tenants include nationally recognized names such as Tractor Supply , Talbots, and Cracker Barrel. Experienced Sponsorship: The loan is sponsored by ARCP. ARCP purchased all of the portfolio assets within the last 18 months using equity and existing unsecured credit facilities. As of Sept. 30, 2013 , ARCP owned 1,219 properties leased to 183 tenants in 32 distinct industries. ARCP's portfolio is 100 percent occupied and the weighted average lease duration is 9.5 years. Investment grade tenants represented 41.1 percent of the company's rent roll. RATING SENSITIVITIES Fitch found that the pool could withstand a 64.2 percent decline in value (based on appraised values at issuance) and an approximately 55 percent decrease to the 2014 contractual cash flow prior to experiencing $1 of loss to the AAAsf rated class. Fitch evaluated the sensitivity of the ratings of class A (rated AAAsf by Fitch) and found that an 8 percent decline in Fitch net cash flow would result in a one-category downgrade, while a 35 percent decline would result in a downgrade to below investment grade. The Rating Sensitivity section in the presale report includes a detailed explanation of additional stresses and sensitivities. A detailed description of Fitch's rating analysis including key rating drivers, stresses, rating sensitivity, analysis, model, criteria application and data adequacy is available in Fitch's presale report dated Jan. 16 . Additional information is available at 'fitchratings.com '. Applicable Criteria and Related Research : --'Global Structured Finance Rating Criteria' (May 2013); --'Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions (September 2013); --Counterparty Criteria for Structured Finance Transactions and Covered Bonds (May 2013); --U.S. Commercial Mortgage Servicer Rating Criteria, (February 2011); --U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria (December 2013). Applicable Criteria and Related Research : DBCCRE 2014- ARCP Mortgage Trust - Appendix Applicable Criteria and Related Research : Global Structured Finance Rating Criteria http://fitchratings.com/creditdesk/reports/ report_frame.cfm?rpt_id=708661 Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions http://fitchratings.com/creditdesk/reports/ report_frame.cfm?rpt_id=718468 Counterparty Criteria for Structured Finance and Covered Bonds http://fitchratings.com/creditdesk/reports/ report_frame.cfm?rpt_id=707155 U.S. Commercial Mortgage Servicer Rating Criteria http://fitchratings.com/creditdesk/reports/ report_frame.cfm?rpt_id=584005 U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria http://fitchratings.com/creditdesk/reports/ report_frame.cfm?rpt_id=724961 Additional Disclosure Solicitation Status http://fitchratings.com/gws/en/disclosure/ solicitation?pr_id=818370 ((Comments on this story may be sent to newsdesk@closeupmedia.com ))


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