Fitch Affirms UBS-Barclays Commercial Mortgage Trust 2012-C4
OREANDA-NEWS. Fitch Ratings has affirmed all classes of UBS-Barclays Commercial Mortgage Trust 2012-C4 commercial mortgage pass-through certificates series 2012-C4. A detailed list of rating actions follows at the end of this release.
KEY RATING DRIVERS
The affirmations are based on overall stable performance of the underlying collateral pool. As of the November 2015 remittance, the pool's aggregate principal balance has been paid down by 3.2% to $1.428 billion from $1.456 billion at issuance.
Fourteen of the Top 15 loans (93.3% of the pool) reported full-year 2014 financials. The pool's overall net operating income has been relatively stable with a 5.6% increase since issuance for reporting loans. Eleven loans are currently on the servicer watchlist (10.7%); however, the majority of issues are related to minor deferred maintenance. As such, only two (3.6%) of the watchlist loans are a Fitch loan of concern related to occupancy and performance issues.
The largest Fitch loan of concern is Evergreen Plaza (1.9%), which is secured by a 121,199 square foot (sf) shopping center in Staten Island, NY. The tenant base includes Pathmark [a subsidiary of The Great Atlantic & Pacific Tea Company (A&P)], Capital One N.A., and Joe's of Avenue U, along with other tenants. The property is currently on the watchlist due to A&P filing for chapter 11 bankruptcy recently. Servicer notes indicate that Pathmark will continue to operate the grocery store during the Chapter 11 proceeding and that a sale of select sites is in process with no change to the lease term or rates.
The second Fitch loan of concern (1.7%) is secured by the 70-00 Austin Street, an 80,878 sf anchored retail center located in Forest Hills, NY. The property's occupancy has been 100% since issuance with the debt coverage ratio above 1.5x over that period time. Barnes and Noble anchors the subject and holds a fourth space that consists of 27% of the net rentable area (NRA) with a lease expiration date of January 2016. The latest servicer commentary stated that Barnes and Noble had not renewed their lease and that the sponsor will begin the process of finding a replacement tenant shortly. The loan is structured with a cashflow sweep to mitigate the exit risk of Barnes and Noble. Fitch will monitor the situation for progress in securing a new tenant and backfilling the space.
The largest loan of the pool (9.79%) is secured by Marcourt Net Lease Hotel Portfolio, a portfolio of select-service hotels diversified across nine states. The individual properties have a net lease agreement with Marriott International, which is responsible for the maintenance and operation for each asset until the lease expiration date of January 2023. The hotels are located near major national and international airports and several locations have radius restrictions limiting future Courtyard properties from opening in close proximity to the collateral.
All classes maintain their Stable Outlooks. Due to continued stable performance, Fitch does not foresee positive ratings migration unless a positive economic event or significant principal pay down occurs. Negative ratings migration is possible if the portfolio-level metrics deteriorate or any loans have significant performance deterioration or occupancy issues.
DUE DILIGENCE USAGE
No third-party due diligence was provided or reviewed in relation to this rating action.
Fitch has affirmed the following classes:
UBS-Barclays Commercial Mortgage Pass-Through Certificates Series 2012-C4
--$37.6 million class A-1 at 'AAAsf'; Outlook Stable;
--$73.3 million class A-2 at 'AAAsf'; Outlook Stable;
--$132 million class A-3 at 'AAAsf'; Outlook Stable;
--$150 million class A-4 at 'AAAsf'; Outlook Stable;
--$476 million class A-5 at 'AAAsf'; Outlook Stable;
--$104 million class A-AB 'AAAsf'; Outlook Stable;
--$145.6 million class A-S at 'AAAsf'; Outlook Stable;
--$1.138 billion* class X-A at 'AAAsf'; Outlook Stable;
--$134.7 million* class X-B at 'A-sf'; Outlook Stable;
--$69.2 million class B at 'AA-sf'; Outlook Stable;
--$65.5 million class C at 'A-sf'; Outlook Stable;
--$61.9 million class D at 'BBB-sf'; Outlook Stable;
--$25.5 million class E at 'BBsf'; Outlook Stable;
--$18.2 million class F at 'Bsf'; Outlook Stable.
*Notional amount and interest only
Fitch does not rate the $51 million class G.