Fitch to Rate CSAIL 2015-C-1 Commercial Mortgage Trust Pass-Through Ctfs; Presale Issued
Fitch expects to rate the transaction and assign Rating Outlooks as follows:
--\$43,251,000 class A-1 'AAAsf'; Outlook Stable;
--\$56,329,000 class A-2 'AAAsf'; Outlook Stable;
--\$270,000,000 class A-3 'AAAsf'; Outlook Stable;
--\$405,275,000 class A-4 'AAAsf'; Outlook Stable;
--\$74,606,000 class A-SB 'AAAsf'; Outlook Stable;
--\$934,407,000a class X-A 'AAAsf'; Outlook Stable;
--\$66,743,000a class X-B 'AA-sf'; Outlook Stable;
--\$84,946,000 class A-S 'AAAsf'; Outlook Stable;
--\$66,743,000 class B 'AA-sf'; Outlook Stable;
--\$53,091,000 class C 'A-sf'; Outlook Stable;
--\$53,091,000ab class X-C 'A-sf'; Outlook Stable;
--\$62,192,000ab class X-D 'BBB-sf'; Outlook Stable;
--\$24,270,000ab class X-E 'BBsf'; Outlook Stable;
--\$15,168,000ab class X-F 'Bsf'; Outlook Stable;
--\$62,192,000b class D 'BBB-sf'; Outlook Stable;
--\$24,270,000b class E 'BBsf'; Outlook Stable;
--\$15,168,000b class F 'Bsf'; Outlook Stable.
(a) Notional amount and interest-only.
(b) Privately placed and pursuant to Rule 144A.
The expected ratings are based on information provided by the issuer as of March 2, 2015. Fitch does not expect to rate the \$57,645,215 class NR and X-NR certificates.
The certificates represent the beneficial ownership interest in the trust, primary assets of which are 82 loans secured by 114 commercial properties having an aggregate principal balance of approximately \$1.21 billion, as of the cutoff date. The loans were contributed to the trust by Column Financial, Inc., MC-Five Mile Commercial Mortgage Finance LLC, The Bancorp Bank, and BSPCC Lender L.L.C.
Fitch reviewed a comprehensive sample of the transaction's collateral, including site inspections on 65.8% of the properties by balance, cash flow analysis of 77.3%, and asset summary reviews on 80.5% of the pool.
KEY RATING DRIVERS
High Fitch Leverage: The pool's Fitch DSCR and LTV are 1.21x and 110.4%, respectively. This represents higher leverage than other recent Fitch-rated fixed-rate multiborrower transactions. The 2014 average Fitch DSCR was 1.19x and the average Fitch LTV was 106.2%. Fitch has rated three fixed-rate multiborrower transactions in 2015 with an average Fitch DSCR and LTV of 1.22x and 107.7%, respectively.
High New York Concentration: The largest state concentration is New York (24.4%), with the three largest loans secured by properties located in New York City. The next largest state concentrations are California (15.0%) and Texas (13.1%).
Property Type Concentration: The pool has an above-average concentration of hotel properties at 23.9%, including the largest loan in the pool. The largest property type in the pool is retail (25.6%), followed by hotel, and multifamily (23.1%). Overall, the property types are more diverse, as recent transactions have typically had property concentrations above 30%.
For this transaction, Fitch's net cash flow (NCF) was 12.9% below the most recent net operating income (NOI; for properties for which a recent 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 could result in potential rating actions on the certificates. Fitch evaluated the sensitivity of the ratings assigned to CSAIL 2015-C1 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 '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 on pages 10 - 11.
The master servicer will be KeyBank National Association rated 'CMS1' by Fitch. The special servicer will be C-II Asset Management LLC rated 'CSS1-' by Fitch.