Fitch to Rate MSBAM 2013-C13 Commercial Mortgage Pass-Through Certificates;
NEW YORK -- November 19, 2013
Link to Fitch Ratings' Report: Morgan Stanley Bank of America Merrill Lynch
Trust, Series 2013-C13 (US CMBS)
Fitch Ratings has issued a presale report on Morgan Stanley Bank of America
Merrill Lynch Trust, series 2013-C13 commercial mortgage trust pass-through
Fitch expects to rate the transaction and assign Outlooks as follows:
--$50,600,000 class A-1 'AAAsf'; Outlook Stable;
--$97,200,000 class A-2 'AAAsf'; Outlook Stable;
--$77,200,000 class A-SB 'AAAsf'; Outlook Stable;
--$200,000,000 class A-3 'AAAsf'; Outlook Stable;
--$287,623,000 class A-4 'AAAsf'; Outlook Stable;
--$790,249,000* class X-A 'AAAsf'; Outlook Stable;
--$57,264,000*b class X-B 'AA-sf'; Outlook Stable;
--$77,626,000a class A-S 'AAAsf'; Outlook Stable;
--$57,264,000a class B 'AA-sf'; Outlook Stable;
--$180,702,000a class PST 'A-sf'; Outlook Stable;
--$45,812,000a class C 'A-sf'; Outlook Stable;
--$49,629,000b class D 'BBB-sf'; Outlook Stable;
--$13,998,000b class E 'BB+sf'; Outlook Stable;
--$11,453,000b class F 'BB-sf'; Outlook Stable;
--$10,180,000b class G 'B-sf'; Outlook Stable.
(*) Notional amount and interest only.
(a) Class A-S, class B and class C certificates may be exchanged for class PST
Certificates, and class PST Certificates may be exchanged for class A-S, class
B and class C certificates.
(b) Privately placed pursuant to Rule 144A.
The expected ratings are based on information provided by the issuer as of
November 16, 2013. Fitch does not expect to rate the $39,449,646 class H or
the interest-only class X-C.
The certificates represent the beneficial ownership in the trust, primary
assets of which are 64 loans secured by 78 commercial properties having an
aggregate principal balance of approximately $1.018 billion as of the cutoff
date. The loans were contributed to the trust by Morgan Stanley Mortgage
Capital Holdings LLC; Bank of America, National Association; and CIBC Inc.
Fitch reviewed a comprehensive sample of the transaction's collateral,
including site inspections on 71.9% of the properties by balance, cash flow
analysis of 80.4%, and asset summary reviews on 80.4% of the pool.
KEY RATING DRIVERS
Fitch Leverage: The Fitch stressed DSCR and LTV of 1.17x and 105.1%, represent
increased leverage as compared to recent Fitch-rated conduit transactions in
2013. Fitch-rated deals that closed in first-half 2013 had average Fitch DSCR
and LTV of 1.36x and 99.8%, respectively. The MSBAM 2013-C12 transaction
(rated by Fitch) had a Fitch DSCR and LTV of 1.19x and 103.2%, respectively.
Retail Concentration: Retail properties represent the largest concentration at
55.4% of the pool, including eight of the top 15 loans. This is higher than
the 2012 average retail concentration of 35.9%. However, three of the retail
properties in the top 10 (Stonestown Galleria, The Mall at Chestnut Hill, and
428-430 N. Rodeo Drive), totaling 27.4% of the pool, are high-quality
properties in strong locations.
Collateral Quality: Three of the largest 10 loans (18.3% of the pool) received
property quality grades of 'A-' or 'A'. In total, six of the top 10 loans
received property quality grades of 'B+' or better.
For this transaction, Fitch's net cash flow (NCF) was 13.4% below the most
recent reported net operating income (NOI) (for properties that 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 severity on defaulted loans and could result in potential
rating actions on the certificates. Fitch evaluated the sensitivity of the
ratings assigned to MSBAM 2013-C13 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.
The master servicer will be Wells Fargo Bank, National Association, rated
'CMS1-' by Fitch. The special servicer will be Rialto Capital Advisors, LLC,
rated 'CSS2-' by Fitch.
The presale report is available at 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions
--Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions
--Global Structured Finance Rating Criteria (June 6, 2012)
--Criteria for Special-Purpose Vehicles in Structured Finance Transactions
(May 30, 2012)
--U.S. Commercial Mortgage Servicer Rating Criteria (February 18, 2011)
--U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria
(December 18, 2012)
--Counterparty Criteria for Structured Finance and Covered Bonds (May 30,
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ON THE FITCH WEBSITE.
Natalie Ulloa, +1 212-908-9166
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
Abigail Kagan, +1 212-908-0516
Eric Rothfeld, +1 212-908-0761
Sandro Scenga, +1 212-908-0278
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