OREANDA-NEWS. Fitch Ratings has issued a presale report on the Morgan Stanley Bank of America Merrill Lynch Trust 2016-C29 Commercial Mortgage Trust pass-through certificates. Fitch expects to rate the transaction and assign Rating Outlooks as follows:

--$29,800,000 class A-1 'AAAsf'; Outlook Stable;
--$39,500,000 class A-2 'AAAsf'; Outlook Stable;
--$58,500,000 class A-SB 'AAAsf'; Outlook Stable;
--$190,000,000 class A-3 'AAAsf'; Outlook Stable;
--$248,821,000 class A-4 'AAAsf'; Outlook Stable;
--$566,621,000b class X-A 'AAAsf'; Outlook Stable;
--$97,136,000b class X-B 'AA-sf'; Outlook Stable;
--$54,639,000 class A-S 'AAAsf'; Outlook Stable;
--$42,497,000 class B 'AA-sf'; Outlook Stable;
--$35,413,000 class C 'A-sf'; Outlook Stable;
--$42,797,000ab class X-D 'BBB-sf'; Outlook Stable;
--$22,260,000ab class X-E 'BB-sf'; Outlook Stable;
--$8,095,000a class X-F 'B-sf'; Outlook Stable;
--$42,497,000a class D 'BBB-sf'; Outlook Stable;
--$22,260,000a class E 'BB-sf'; Outlook Stable;
--$8,095,000a class F 'B-sf'; 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 April 18, 2016. Fitch does not expect to rate the following classes:

--$17,201,000 class X-G;
--$20,236,885 class X-H;
--$17,201,000 class G;
--$20,236,885 class H.

The certificates represent the beneficial ownership interest in the trust, primary assets of which are 69 loans secured by 106 commercial properties having an aggregate principal balance of approximately $809.5 million as of the cut-off date. The loans were contributed to the trust by Morgan Stanley Mortgage Capital Holdings LLC, Bank of America, National Association, KeyBank, National Association, and Starwood Mortgage Funding III LLC.

Fitch reviewed a comprehensive sample of the transaction's collateral including site inspections on 72.5% of the properties by balance, cash flow analysis of 69.9%, and asset summary reviews on 100% of the pool.

KEY RATING DRIVERS

High Fitch Conduit Leverage: This transaction has a Fitch DSCR and LTV of 1.15x and 107.8%, respectively. Excluding the credit opinion loan, Penn Square Mall (5.8% of the pool), the Fitch DSCR and LTV are 1.12x and 111%. The YTD 2016 and 2015 Fitch DSCR were 1.17x and 1.18x, respectively and 108% and 109.3%, respectively.

Lower Pool Concentration: The top 10 loans comprise 41.1% of the pool, which is lower than the recent averages of 49.3% and 50.5% for 2015 and 2014, respectively. Additionally, the loan concentration index (LCI) index is 265, less than the 2015 average of 367.

Investment Grade Credit Opinion Loan: One loan, Penn Square Mall (5.8% of the pool), has an investment-grade credit opinion of 'A' on a stand-alone basis. Excluding this loan, the conduit has a Fitch stressed DSCR and LTV of 1.12x and 111%, respectively.

RATING SENSITIVITIES
For this transaction, Fitch's net cash flow (NCF) was 14.5% 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 MSBAM 2016-C29 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 'BBB+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 on pages 11-12.