Fitch Affirms UBS-Barclays Commercial Mortgage Trust 2012-C4

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has affirmed all classes of UBS-Barclays Commercial Mortgage Trust 2012-C4 commercial mortgage pass-through certificates series 2012-C4. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The affirmations are based on overall stable performance since issuance. As of the October 2016 distribution date, the pool's aggregate principal balance has been reduced by 5.2% to $1.381 billion from $1.456 billion at issuance. Sixteen loans (14.8% of the pool) are currently on the servicer watchlist; however, nine of the loans have issues related to minor deferred maintenance but not considered Fitch loans of concern. Seven (8.6%) of the watchlist loans, which have occupancy and/or performance issues are Fitch loans of concern. Eight loans (2.9%) are fully defeased.

Stable Performance: Based on full-year 2015 financial statements, the pool's overall net operating income has been relatively stable with a 2.1% increase since last year's review and an 8.1% increase since issuance for reporting loans. All loans in the pool are current as of the October 2016 distribution and no loans are in special servicing.

Loan Diversity: The largest 10 loans account for 48.6% of the pool by balance. It was also noted at issuance that the loan concentration index (LCI) was lower than average for this transaction compared to the 2012 peer set.

Single Tenant Exposure: Two of the 10 largest assets, representing 13.1% of the pool, are occupied by a single tenant or present exposure in excess of 80% of the NRA to a single tenant, creating idiosyncratic risk to property performance.

Loan Amortization: Six loans, representing nearly 19% of the collateral balance, are full-term interest-only loans, above the 2012 average of 13%, and one loan (0.5%) has an anticipated repayment date (ARD). The pool is comprised of loans that have maturity dates in 2017 (5.1%), 2020 (9.6%), and 2022 (85.3%). This deal is expected to experience amortization of 13.4% between securitization and maturity.

Two top 10 properties had exposure to Sports Authority: Newgate Mall and Clifton Commons (8.1%). Both properties experienced vacancy after the tenant's bankruptcy liquidation. Both properties are considered strong retail centers within its submarket and the sponsors have begun negotiations with replacement tenants. Although Fitch projects short-term decreases in cashflow for each asset, long-term performance issues are not expected due to the sponsors' experience and strong historical asset operating performance.

RATING SENSITIVITIES

The Rating Outlooks on all classes remain Stable. Fitch does not foresee positive or negative ratings migration until a material economic or asset-level event changes the transaction's overall portfolio-level metrics.

USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10

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

Fitch has affirmed the following ratings:

UBS-Barclays Commercial Mortgage Pass-Through Certificates Series 2012-C4

--$8.6 million class A-1 at 'AAAsf'; Outlook Stable;

--$73.3 million class A-2 at 'AAAsf'; Outlook Stable;

--$132 million class A-3 at 'AAAsf'; Outlook Stable;

--$150 million class A-4 at 'AAAsf'; Outlook Stable;

--$476 million class A-5 at 'AAAsf'; Outlook Stable;

--$104 million class A-AB 'AAAsf'; Outlook Stable;

--$145.6 million class A-S at 'AAAsf'; Outlook Stable;

--$1.089 billion* class X-A at 'AAAsf'; Outlook Stable;

--$134.7 million* class X-B at 'A-sf'; Outlook Stable;

--$69.2 million class B at 'AA-sf'; Outlook Stable;

--$65.5 million class C at 'A-sf'; Outlook Stable;

--$61.9 million class D at 'BBB-sf'; Outlook Stable;

--$25.5 million class E at 'BBsf'; Outlook Stable;

--$18.2 million class F at 'Bsf'; Outlook Stable.

*Notional amount and interest only.

Fitch does not rate the $51 million class G.

Additional information is available at www.fitchratings.com

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 01 Sep 2016)

https://www.fitchratings.com/site/re/886006

Criteria for Rating Caps and Limitations in Global Structured Finance Transactions (pub. 16 Jun 2016)

https://www.fitchratings.com/site/re/882401

Global Structured Finance Rating Criteria (pub. 27 Jun 2016)

https://www.fitchratings.com/site/re/883130

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

https://www.fitchratings.com/site/re/873395

Related Research

UBS-Barclays Commercial Mortgage Trust 2012-C4 -- Appendix

https://www.fitchratings.com/site/re/699291

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1014293

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1014293

Endorsement Policy

https://www.fitchratings.com/regulatory

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Copyright © 2016 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch's factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch's ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed.

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Fitch Ratings
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Jay Bullie, CFA
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Fitch Ratings, Inc.
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Chicago, IL 60602
or
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or
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Email: [email protected]

Source: Fitch Ratings

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