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

NEW YORK, Aug. 12, 2014 /PRNewswire/ -- Morningstar Credit Ratings, LLC today assigned preliminary ratings for the commercial mortgage-backed securities (CMBS) transaction BBCMS Trust 2014-BXO, Commercial Mortgage Pass-Through Certificates, Series 2014-BXO (BBCMS 2014-BXO). The preliminary ratings are based on information known to Morningstar as of Aug. 12, 2014.

PRELIMINARY RATINGS (AS OF AUG. 12, 2014)

Class

Balance/ Notional Amt.

Preliminary Ratings

Morningstar DSCR

Morningstar BLTV

Morningstar ELTV

Credit Support Levels

Class A

$146,400,000

AAA

3.08x

42.75%

42.75%

58.76%

Class X

$146,400,000

TBD

TBD

N/A

N/A

N/A

Class B

$55,700,000

NR

N/A

N/A

N/A

N/A

Class C

$28,870,000

NR

N/A

N/A

N/A

N/A

Class D

$35,420,000

NR

N/A

N/A

N/A

N/A

Class E

$48,120,000

NR

N/A

N/A

N/A

N/A

Class F

$40,490,000

NR

N/A

N/A

N/A

N/A

NR – Not Rated

The key characteristics of the mortgage loan collateral supporting BBCMS 2014-BXO are:

  • A single floating-rate, interest-only, commercial mortgage loan with an initial two-year term and subject to three one-year extension options. The mortgage loan is secured by the borrower's fee simple interest in a cross-collateralized portfolio of nine office properties;
  • The properties in the portfolio aggregate 1.8 million square feet and are located in six distinct markets in California, Virginia, Florida, and Colorado;
  • The principal balance of the mortgage loan, which is collateral for the trust, is $355.0 million; and
  • There is subordinate debt included in the transaction of $45.0 million of mezzanine financing.

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 $27.4 million, which is lower than the arranger's NCF by 9.4 percent;
  • The Morningstar debt service coverage ratio (DSCR) is 1.27x based on the actual loan interest rate of 6.1 percent;
  • Morningstar valued the portfolio at $342.4 million using a weighted-average capitalization rate of 8.0 percent; and
  • The Morningstar value is 35.1 percent lower than the appraised value of $527.8 million. The Morningstar value resulted in a weighted-average beginning loan/value (LTV) ratio of 103.7 percent.

For complete details about the preliminary ratings for this transaction, Morningstar's Transaction 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:
Michelle Weiss, +1 267-960-6014 or [email protected]

SOURCE Morningstar, Inc.

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