Fitch expects to rate the transaction and assign Outlooks as follows:
a Notional amount and interest only.
b Class A-
c Privately placed pursuant to Rule 144A.
The expected ratings are based on information provided by the issuer as of
The certificates represent the beneficial ownership in the trust, primary assets of which are 76 loans secured by 110 commercial properties having an aggregate principal balance of approximately
Fitch reviewed a comprehensive sample of the transaction's collateral, including site inspections on 72.2% of the properties by balance, cash flow analysis of 73%, and asset summary reviews on 83.5% of the pool.
KEY RATINGS DRIVERS
High Leverage: The pool's Fitch DSCR and LTV of 1.25x and 105.4%, respectively, are higher than the first-quarter 2014 averages of 1.18x and 104.7%, respectively.
High Concentration of Full and Partial Interest-Only Loans: Nine loans (24.7%) are subject to full-term interest-only payments, and 31 loans (40.6%) are subject to partial interest-only payments. These figures are higher than those for Fitch-rated transactions in 1Q'14, which had average full term and partial interest-only loans of 15.8% and 37.6%, respectively.
Collateral Quality: 42.2% of the pool, including five of the largest 10 loans, received property quality grades of 'B+' or better. Higher property quality grades result in a lower probability of loss in Fitch's multiborrower conduit model.
For this transaction, Fitch's net cash flow (NCF) was 16.1% below the most recent reported net operating income (NOI) (for properties that NOI was provided, excluding properties that were stabilizing during this 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 MSBAM 2014-C16 certificates and found that the transaction displays average sensitivity to further declines in NCF. In a scenario in which NCF declined a further 10% from Fitch's NCF, a downgrade of the junior 'AAAsf' certificates to 'AA-sf' could result. In a scenario in which NCF declined a further 20% from Fitch's NCF, a downgrade of the junior 'AAAsf' certificates to 'A-sf' 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 'BBB-sf' could result. The presale report includes a detailed explanation of additional stresses and sensitivities.
For a detailed description of Fitch's rating analysis, please see the report titled '
The presale report is available at 'www.fitchratings.com'. For more information about Fitch's comprehensive subscription service FitchResearch, which includes all presale reports, surveillance, and credit reports on more than 20 asset classes, contact product sales at +1-212-908-0800 or at 'firstname.lastname@example.org'.
The master servicer will be
The presale report is available at 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'.
--Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions (
--Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions (
--Global Structured Finance Rating Criteria (
--Criteria for Special-Purpose Vehicles in Structured Finance Transactions (
--Rating Criteria for U.S. Commercial Mortgage Servicers (
--U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria (
--Counterparty Criteria for Structured Finance and Covered Bonds (
Source: Fitch Ratings
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