Fitch Assigns Final Ratings to CSAIL 2016-C5 Commercial Mortgage Trust Pass-Through Certificates
--\\$28,557,000 class A-1 'AAAsf'; Outlook Stable;
--\\$121,570,000 class A-2 'AAAsf'; Outlook Stable;
--\\$19,780,000 class A-3 'AAAsf'; Outlook Stable;
--\\$170,000,000 class A-4 'AAAsf'; Outlook Stable;
--\\$267,448,000 class A-5 'AAAsf'; Outlook Stable;
--\\$48,139,000 class A-SB 'AAAsf'; Outlook Stable;
--\\$67,891,000 class A-S 'AAAsf'; Outlook Stable;
--\\$723,385,000b class X-A 'AAAsf'; Outlook Stable;
--\\$51,503,000 class B 'AA-sf'; Outlook Stable;
--\\$51,503,000b class X-B 'AA-sf'; Outlook Stable;
--\\$42,139,000 class C 'A-sf'; Outlook Stable;
--\\$46,821,000a class D 'BBB-sf'; Outlook Stable;
--\\$46,821,000ab class X-D 'BBB-sf'; Outlook Stable;
--\\$23,410,000a class E 'BB-sf'; Outlook Stable;
--\\$23,410,000ab class X-E 'BB-sf'; Outlook Stable;
--\\$9,365,000a class F 'B-sf'; Outlook Stable;
--\\$9,365,000ab class X-F 'B-sf'; Outlook Stable.
(a) Privately placed and pursuant to Rule 144A.
(b) Notional amount and interest-only.
The ratings are based on information provided by the issuer as of Feb. 8, 2016. Fitch does not rate the \\$39,797,933 class NR and class X-NR certificates.
The certificates represent the beneficial ownership interest in the trust, primary assets of which are 59 loans secured by 241 commercial properties having an aggregate principal balance of approximately \\$936.4 million as of the cutoff date. The loans were contributed to the trust by Column Financial, Inc., Rialto Mortgage Finance, LLC, The Bank of New York Mellon, Silverpeak Real Estate Finance LLC, and Jeffries LoanCore LLC.
Fitch reviewed a comprehensive sample of the transaction's collateral including site inspections on 70.9% of the properties by balance, cash flow analysis of 79.7%, and asset summary reviews on 79.7% of the pool.
KEY RATING DRIVERS
Additional Debt: There are five loans representing 21.8% of the pool with subordinate debt. This is higher than the 2014 average of 10.4% and the 2015 average of 9.1% for similar Fitch-rated fixed-rate multiborrower transactions.
Investment Grade Credit Opinion Loan: The largest loan in the pool, GLP Portfolio Pool A (9.3%), received a credit opinion of 'Asf' on a stand-alone basis. The loan is secured by 114 industrial properties across nine states in 11 markets. The sponsor is Global Logistics Properties, Ltd, which is currently rated 'BBB+' by Fitch.
Fitch Leverage: The pool has a Fitch DSCR of 1.19x, which is above the 2015 average DSCR of 1.18x, and a Fitch LTV of 106.1%, which is below the 2015 average LTV of 109.3%.
Property Type Concentration: The pool's largest concentration by property type is multifamily at 25.8%, followed by industrial properties at 21.5%. Hotels make up 21.2% of the pool. The industrial concentration is above the 2015 average of 4.2%. Additionally, the hotel concentration is above the 2015 average of 17% for other Fitch-rated fixed-rate multiborrower transactions.
Pool Concentration: The pool has a higher loan concentration index compared to other recent Fitch-rated fixed-rate multiborrower transactions. The top 10 loans represent 53.3% of the pool, which is higher than the 2015 average top 10 concentration of 49.3%. The pool's loan concentration index (LCI) of 414 is higher than the 2015 average LCI of 367.
Low Mortgage Coupons: The pool's weighted average mortgage coupon is 4.55%, well below historical averages, but higher than the 2015 average of 4.45%. Fitch accounted for increased refinance risk in a higher interest rate environment by analyzing sensitivity to increased interest rates.
Amortization: Five loans representing 27.5% of the pool are interest-only, which is higher than the 2015 average of 23.3% for other Fitch-rated multiborrower transactions. There are 32 loans, representing 49.6% of the pool, that are partial interest-only. Based on the scheduled balance at maturity, the pool is expected to pay down by 8.8%.
For this transaction, Fitch's net cash flow (NCF) was 12.1% 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 CSAIL 2015-C5 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 'BBB-sf' 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 due diligence information from KPMG LLP. The due diligence focused on a comparison and re-computation of certain characteristics with respect to each of the 59 mortgage loans. Fitch considered this information in its analysis and the findings did not have an impact on our analysis.