Fitch Affirms COMM 2014-UBS6; Revises Outlook to Negative

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has affirmed 17 classes of COMM 2014-UBS6 pass-through certificates, which were issued by Deutsche Bank Securities, Inc. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The affirmations are due to overall stable performance. The stable performance reflects no material changes to pool metrics since issuance, therefore, the original rating analysis was considered in affirming the transaction.

As of the March 2016 distribution date, the pool has paid down 8%, to $1.27 billion from $1.28 billion at issuance. There are 10 loans (17.9%) on the master servicer's watch list, mostly due to occupancy declines, deferred maintenance, and a fire at one of the properties. Of the loans on the watch list, three loans (6.9%) are considered Fitch Loans of Concern, including the one specially serviced loan (0.7%).

The largest Fitch Loan of Concern is the University Village loan (3.1% of pool balance) which is secured by a 1,164 bed student housing property in Tuscaloosa, AL, less than two miles from the University of Alabama campus. As of the third quarter 2015 (3Q15), occupancy declined to 57.7% from 98.8% at 2Q15 primarily as a result of tenant evictions. Upon acquisition of the property at issuance, the sponsor has substantially upgraded property amenities and instituted stronger tenant screening processes. The sponsor remains committed to the property and projects stabilization of the property by the 2017/2018 school year. At issuance, Fitch noted a significant number of deliveries during 2015 which may have impacted the property.

The second largest Fitch Loan of Concern is the 811 Wilshire loan (3.1% of pool balance) which is secured by a 336,190 square foot office building located in downtown Los Angeles, CA. This property experienced an explosion leading to a fire and flooding in its basement. The building was deemed unsafe for occupancy on Aug. 20, 2015; however, all tenants resumed occupancy on Sept. 25, 2015. The property maintains comprehensive property insurance including business interruption coverage. Performance has declined as a result of expenses which appear related to the explosion at the property. Fitch continues to monitor performance and restabilization of the property which is likely, given the resumed tenant occupancy and insurance coverage.

The specially serviced loan is the Black Gold Suites Hotel Portfolio (0.7% of pool balance) which is secured by two unflagged hotel properties totaling 189 rooms in Tioga and Stanley, ND. The loan transferred to special servicing in January 2016 due to imminent monetary default. Both hotels are located on the Bakken Formation and reflect exposure to the energy industry. Performance of the portfolio has declined with significant declines in occupancy and average daily rates as of February 2016. Two hotels totaling 169 keys opened in the Tioga market, in which Black Gold Suites Tioga was previously the only hotel option. An additional 89-key hotel opened in the Stanley market as well in which Black Gold Suites only major competition was previously a 77-key hotel. The sponsor is currently in negotiations with the special servicer for a short-term forbearance agreement under the presumption that oil prices will recover. The loan was 30 days delinquent as of the March 2016 distribution date.

Last month Fitch traveled to the Bakken region and visited the portfolio, spending time in both Tioga and Stanley. At the time of the visit, the subject hotels as well as competing properties showed little signs of activity. It is noted that this is not peak season for oil production, and while demand may increase during warmer months, Fitch anticipates performance will remain below expectations if oil prices remain at their current levels.

RATING SENSITIVITIES

The Rating Outlook on class F has been revised to Negative as a result of the negative impact from additional stressed analysis on both the specially serviced loan and two Fitch loans of concern. Sustained underperformance may warrant a downgrade; conversely the Rating Outlook may be revised to Stable should asset level performance revert to levels seen at issuance. Rating Outlooks on A-1 through E remain Stable due to the overall stable performance of the pool. Downgrades are possible with significant performance decline. Upgrades, while not likely in the near term, are possible with increased credit enhancement and overall improved pool performance.

DUE DILIGENCE USAGE

No third-party due diligence was provided or reviewed in relation to this rating action.

Fitch affirms and revises the Rating Outlook on the following class:

--$20.7 million class F at 'BB-sf', Outlook to Negative from Stable.

Fitch affirms the following classes as indicated:

--$47 million class A-1 at 'AAAsf', Outlook Stable;

--$103 million class A-2 at 'AAAsf', Outlook Stable;

--$22.9 million class A-3 at 'AAAsf', Outlook Stable;

--$97.4 million class A-SB at 'AAAsf', Outlook Stable;

--$275 million class A-4 at 'AAAsf', Outlook Stable;

--$337.7 million class A-5 at 'AAAsf', Outlook Stable;

--$97.3 million class A-M at 'AAAsf', Outlook Stable;

--$57.4 million class B at 'AA-sf', Outlook Stable;

--$220 million class PEZ at 'A-sf', Outlook Stable;

--$65.4 million class C at 'A-sf', Outlook Stable;

--$60.6 million class D at 'BBB-sf', Outlook Stable;

--$12.8 million class E at 'BB+sf', Outlook Stable;

--Interest-Only class X-A at 'AAAsf'; Outlook Stable;

--Interest-Only class X-B at 'A-sf'; Outlook Stable;

--Interest-Only class X-C at 'BBB-sf'; Outlook Stable;

--Interest-Only class X-D at 'BB-sf'; Outlook Stable.

Fitch does not rate classes G, H, or X-E.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

Criteria for Rating Caps and Limitations in Global Structured Finance Transactions (pub. 28 May 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748781

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

U.S. and Canadian Fixed-Rate Multiborrower CMBS Surveillance and U.S. Re-REMIC Criteria (pub. 13 Nov 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=873395

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1002440

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1002440

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160413006520/en/

Fitch Ratings
Primary Analyst
Rob Buckley
Analyst
+1-312-368-5447
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Committee Chairperson
Mary MacNeill
Managing Director
+1-212-908-0785
or
Media Relations:
Sandro Scenga, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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