News Column

Fitch Assigns Final Ratings to Citigroup Commercial Mortgage Trust 2014-GC21 Comm'l Mtg P-T Certs

May 22, 2014

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has assigned the following ratings and Rating Outlooks to Citigroup Commercial Mortgage Trust 2014-GC21 commercial mortgage pass-through certificates.

--$52,329,000 class A-1 'AAAsf'; Outlook Stable;

--$63,220,000 class A-2 'AAAsf'; Outlook Stable;

--$9,600,000 class A-3 'AAAsf'; Outlook Stable;

--$240,000,000 class A-4 'AAAsf'; Outlook Stable;

--$291,371,000 class A-5 'AAAsf'; Outlook Stable;

--$71,630,000 class A-AB 'AAAsf'; Outlook Stable;

--$786,663,000* class X-A 'AAAsf'; Outlook Stable;

--$115,723,000* class X-B 'AA-sf'; Outlook Stable;

--$58,513,000b class A-S 'AAAsf'; Outlook Stable;

--$70,214,000b class B 'AA-sf'; Outlook Stable;

--$174,236,000b class PEZ 'A-sf'; Outlook Stable;

--$45,509,000b class C 'A-sf'; Outlook Stable;

--$24,705,000*a class X-C 'BBsf'; Outlook Stable;

--$50,711,000a class D 'BBB-sf'; Outlook Stable;

--$24,705,000a class E 'BBsf'; Outlook Stable;

--$13,003,000a class F 'Bsf'; Outlook Stable.

(*) Notional amount and interest-only.

(a) Privately placed pursuant to Rule 144A.

(b) The class A-S, class B and class C certificates may be exchanged for class PEZ certificates, and class PEZ certificates may be exchanged for the class A-S, class B and class C certificates.

Fitch does not rate the $62,413,547*a class X-D, and the $49,410,547a class G certificates.

The certificates represent the beneficial ownership in the trust, primary assets of which are 70 loans secured by 111 commercial properties having an aggregate principal balance of approximately $1.04 billion as of the cutoff date. The loans were contributed to the trust by Citigroup Global Markets Realty Corp.; Goldman Sachs Mortgage Company; GS Commercial Real Estate LP; MC-Five Mile Commercial Mortgage Finance LLC; Redwood Commercial Mortgage Corporation; Cantor Commercial Real Estate Lending, L.P.; and RAIT Funding, LLC.

Fitch reviewed a comprehensive sample of the transaction's collateral, including site inspections on 78.8% of the properties by balance, cash flow analysis of 82.4%, and asset summary reviews of 86% of the pool.

KEY RATING DRIVERS

High Fitch Leverage: The pool's Fitch debt service coverage ratio (DSCR) and loan to value (LTV) are 1.12x and 109.1%, respectively, which are worse than the 2013 and 2012 averages of 1.29x and 101.6%, and 1.24x and 97.2%, respectively.

Limited Lodging Exposure: The pool's hotel concentration of 4.9% is lower than the 2013 average hotel concentration of 14.7%. There are no hotel properties within the top 25 loans. Hotels have a higher probability of default in Fitch's multiborrower model.

Property Type Diversity: The pool is more diverse by property type than recent transactions with the largest property type in the pool being retail properties at 29.8%, followed by multifamily at 20.4%, office at 12.8% and independent living at 9.9% of the pool. No other property type comprises more than 7.8% of the pool.

Limited Amortization: The pool is scheduled to amortize by 12.8% of the initial pool balance prior to maturity. The pool's concentration of partial interest loans (31.8%), which includes four of the 10 largest loans, is slightly lower than the 2013 average (34%). However, the pool's concentration of full-term interest-only loans (20%), including two of the 10 largest loans, is higher than the 2013 average (17.1%).

RATING SENSITIVITIES

For this transaction, Fitch's net cash flow (NCF) was 4.4% below the most recent net operating income (NOI) (for properties for which historical NOI was provided, excluding properties that were stabilizing during the most recent reporting period). Unanticipated further declines in property-level NCF could result in higher defaults and loss severity on defaulted loans, and could result in potential rating actions on the certificates. Fitch evaluated the sensitivity of the ratings assigned to CGCMT 2014-GC21 certificates and found that the transaction displays slightly above-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 'Asf' 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 'BBBsf' could result. The presale report includes a detailed explanation of additional stresses and sensitivities on pages 81-82.

The master servicer will be Wells Fargo Bank, National Association, rated 'CMS1-' by Fitch. The special servicer will be LNR Partners, LLC, LLC 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' (August 2013);

--'Global Structured Finance Rating Criteria' (May 2013);

--'Rating Criteria for U.S. Commercial Mortgage Servicers' (February 2014);

--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (December 2013);

--'Counterparty Criteria for Structured Finance and Covered Bonds' (May 2013).

Applicable Criteria and Related Research:

Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=715757

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748821

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

Counterparty Criteria for Structured Finance and Covered Bonds

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=831370

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.



Fitch Ratings

Primary Analyst

Brian Vorderbrueggen

Director

+1 212-908-9102

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

Secondary Analyst

Robert Ritter

Analyst

+1 212-908-0328

or

Committee Chairperson

Eric Rothfeld

Managing Director

+1 212-908-0761

or

Media Relations, New York

Sandro Scenga, +1 212-908-0278,

sandro.scenga@fitchratings.com

Source: Fitch Ratings


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