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Morningstar Credit Ratings Assigns Preliminary Ratings for WFLD 2014-MONT Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2014-MONT (WFLD 2014-MONT)

NEW YORK, Aug. 6, 2014 /PRNewswire/ -- Morningstar Credit Ratings, LLC today assigned preliminary ratings for the commercial mortgage-backed securities (CMBS) transaction WFLD 2014-MONT Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2014-MONT (WFLD 2014-MONT). The preliminary ratings are based on information known to Morningstar as of Aug. 6, 2014.

PRELIMINARY RATINGS (AS OF AUG. 6, 2014)

Class

Balance/Notional Amt.

Preliminary Ratings

Morningstar DSCR

Morningstar BLTV

Morningstar ELTV

Credit Support Levels

Class A

$228,095,000

AAA

3.94x

47.19%

47.19%

34.83%

Class X-A

$228,095,000

AAA

N/A

N/A

N/A

N/A

Class X-B

$228,095,000

AAA

N/A

N/A

N/A

N/A

Class B

$50,688,000

AA

3.22x

57.67%

57.67%

20.35%

Class C

$38,016,000

A

2.84x

65.53%

65.53%

9.49%

Class D

$33,201,000

BBB

2.57x

72.40%

72.40%

0.00%

The key characteristics of the mortgage loan collateral supporting WFLD 2014-MONT are:

  • A single fixed-rate, interest-only, mortgage loan with an initial 10-year term. The original principal balance of the mortgage loan, which is collateral for the trust, is $350.0 million. The mortgage loan is secured by the borrower's fee simple interest in Westfield Montgomery Mall, a two-story, enclosed super-regional mall in Bethesda, Md.;
  • Westfield Montgomery Mall is anchored by Nordstrom, Macy's, Macy's Home Store, Sears, and a 16-screen ArcLight Cinema, which is currently under construction;
  • The total area of Westfield Montgomery Mall is 1.3 million square feet. However, only 826,710 square feet are included in the collateral for the loan, as Macy's, Macy's Home Store, and Sears own their improvements; and
  • There is no subordinate debt included in the transaction.

Based on information provided on the arranger's website, Morningstar's analysis of the loan yielded the following Morningstar metrics:

  • A net cash flow (NCF) of $33.8 million, which is lower than the arranger's NCF by 5.09 percent;
  • The Morningstar debt service coverage ratio (DSCR) is 2.57x based on the actual loan interest rate of 3.77 percent;
  • Morningstar valued the property at $483.4 million using a weighted-average capitalization rate of 7.00 percent; and
  • The Morningstar value, which equates to $584.73 per square foot, is 28.91 percent lower than the appraised value of $680.0 million. The Morningstar value resulted in a weighted-average beginning loan/value (LTV) ratio of 72.40 percent.

For complete details about the preliminary ratings for this transaction, Morningstar's Presale Analysis Package, including the Presale Report and the Representations, Warranties, and Enforcement Mechanisms, is available under the Ratings Reports tab on https://ratingagency.morningstar.com. Information subsequently received could result in the assignment of final ratings that differ from the preliminary ratings.

About Morningstar Credit Ratings, LLC and Morningstar, Inc.

Morningstar Credit Ratings, LLC is a Nationally Recognized Statistical Rating Organization (NRSRO) that specializes in structured credit research and ratings and offers a wide array of services including new-issue ratings and analysis, operational risk assessments, surveillance services, data, and technology solutions.

Morningstar Credit Ratings, LLC is a subsidiary of Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research in North America, Europe, Australia, and Asia.

Morningstar, Inc. offers an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. Morningstar provides data on approximately 473,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 12 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $169 billion in assets under advisement and management as of June 30, 2014. The company has operations in 27 countries.

Morningstar, Inc. is not an NRSRO, and its credit ratings on corporate issuers are not NRSRO credit ratings.

©2014 Morningstar, Inc. All Rights Reserved.

MORN-R

Media Contact:

Nadine Youssef, +1 312-696-6601 or nadine.youssef@morningstar.com

SOURCE Morningstar, Inc.

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