OREANDA-NEWS. Fitch Ratings has issued a presale report on the Bank of America Merrill Lynch Commercial Mortgage Trust 2016-UBS10 commercial mortgage pass-through certificates. Fitch expects to rate the transaction and assign Rating Outlooks as follows:

--$31,300,000 class A-1 'AAAsf'; Outlook Stable;
--$135,900,000 class A-2 'AAAsf'; Outlook Stable;
--$49,500,000 class A-SB 'AAAsf'; Outlook Stable;
--$175,000,000 class A-3 'AAAsf'; Outlook Stable;
--$221,682,000 class A-4 'AAAsf'; Outlook Stable;
--$613,382,000b class X-A 'AAAsf'; Outlook Stable;
--$89,816,000b class X-B 'AA-sf'; Outlook Stable;
--$43,813,000 class A-S 'AAAsf'; Outlook Stable;
--$46,003,000 class B 'AA-sf'; Outlook Stable;
--$44,909,000 class C 'A-sf'; Outlook Stable;
--$51,480,000ab class X-D 'BBB-sf'; Outlook Stable;
--$21,906,000ab class X-E 'BBsf'; Outlook Stable;
--$10,954,000ab class X-F 'Bsf'; Outlook Stable;
--$51,480,000a class D 'BBB-sf'; Outlook Stable;
--$21,906,000a class E 'BBsf'; Outlook Stable;
--$10,954,000a class F 'Bsf'; Outlook Stable.

(a) Privately placed and pursuant to Rule 144A.
(b) Notional amount and interest-only.

The expected ratings are based on information provided by the issuer as of May 16, 2016. Fitch does not expect to rate the following classes:

--$18,620,000ab class X-G;
--$25,193,056ab class X-H;
--$18,620,000a class G;
--$25,193,056a class H.

The certificates represent the beneficial ownership interest in the trust, primary assets of which are 52 loans secured by 84 commercial properties having an aggregate principal balance of approximately $876.3 million as of the cutoff date. The loans were contributed to the trust by UBS Real Estate Securities Inc., Barclays Bank PLC, Morgan Stanley Mortgage Capital Holdings, LLC, and Bank of America, National Association.

Fitch reviewed a comprehensive sample of the transaction's collateral including site inspections on 79.6% of the properties by balance, cash flow analysis of 84.8%, and asset summary reviews on 100.0% of the pool.

KEY RATING DRIVERS

Higher Fitch Leverage: The transaction has higher leverage statistics than other recent Fitch-rated transactions. The Fitch debt service coverage ratio (DSCR) and loan to value (LTV) are 1.14x and 108.2%, respectively. This is worse than for other Fitch-rated fixed-rate multiborrower transactions; the year-to-date (YTD) 2016 average Fitch DSCR is 1.17x and the YTD 2016 average Fitch LTV is 107.9%.

High Concentration of Pari Passu Loans: Twelve loans representing 45.1% of the pool by balance are pari passu loans. Ten of the pari passu loans (35.5% of the pool) have their controlling notes securitized in other transactions. Two loans, In-Rel 8 (6.8% of the pool) and Grove City Premium Outlets (2.7% of the pool) have their controlling notes securitized in this transaction.

Less Concentrated Pool: The top 10 loans make up 51.5% of the pool, which is below the YTD 2016 average of 54.8% for other Fitch-rated fixed-rate multiborrower transactions. The pool's Loan Concentration Index (LCI) is 359 is below the YTD 2016 average of 415.

RATING SENSITIVITIES
For this transaction, Fitch's net cash flow (NCF) was 15.2% below the most recent year's net operating income (NOI) for properties for which a full-year 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 severities on defaulted loans and in potential rating actions on the certificates.

Fitch evaluated the sensitivity of the ratings assigned to BACM 2016-UBS10 certificates and found that the transaction displays 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 '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 'BBBsf' could result. The presale report includes a detailed explanation of additional stresses and sensitivities on pages 10-11.

DUE DILIGENCE USAGE

Fitch was provided with third-party due diligence information from KPMG LLP. The third-party due diligence information was provided on Form ABS Due Diligence-15E and focused on a comparison and re-computation of certain characteristics with respect to each of the mortgage loans. Fitch considered this information in its analysis and the findings did not have an impact on the analysis.