Fitch Affirms WFRBS 2012-C7

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed all classes of Wells Fargo Bank, N.A.'s WFRBS 2012-C7 pass-through certificates. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The affirmations are due to the overall stable pool performance since issuance. As of the March 2016 distribution date, the pool's aggregate principal balance has been reduced by 6.3% to $998.4 million from $1.104 billion at issuance. Five loans are on the servicer watch list (5.6% of the pool), two loans (1.4%) are in special servicing, and one loan (3.4%) is defeased.

The largest contributor to expected losses is the Pathmark Staten Island loan (1.1%) which is secured by a 64,117 square foot (sf) retail property which was fully occupied by Pathmark. Pathmark filed for protection under Chapter 11 of the Bankruptcy Code in July 2015. This store subsequently closed in November 2015 and the loan transferred to special servicing in late February for imminent monetary default. The loan is 60 days past due for its January 2016 payment.

The largest loan in the pool is Northridge Fashion Center (14.3%), which is collateralized by 643,564 sf of a 1.52 million sf regional mall located in Northridge, CA. The property is shadow anchored by JC Penney, Macy's, Macy's Men's & Home, and Sears. The property was 96.7% occupied as of year-end 2015, compared to 88.7% at underwriting. The servicer reported year-end 2015 debt service coverage ratio (DSCR) was 1.69x, compared to 1.46x at underwriting. Notably, one of the larger tenants at the property, Sports Authority, filed for protection under Chapter 11 of the Bankruptcy Code earlier this month. Fitch will continue to monitor this asset related to the Sports Authority exposure.

The second largest loan in the pool is Town Center at Cobb (12.2%), which is secured by 559,940 sf of a 1.28 million sf regional mall located in Kennesaw, GA. Collateral anchors are Belk and JC Penney (partial space of 31,026 sf). Other non-collateral anchors include JC Penney, Macy's, Macy's Furniture, and Sears. The property was 83.3% occupied with a servicer reported DSCR of 2.57x as of year-end 2015, compared to 91.3% and 1.59x, respectively, as of year-end 2012. Fitch will continue to monitor this loan given the decline in occupancy and unfavorable sales trends.

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.

DUE DILIGENCE USAGE

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

Fitch affirms the following classes as indicated:

--$119.5 million class A-1 notes at 'AAAsf'; Outlook Stable;

--$418 million class A-2 notes at 'AAAsf'; Outlook Stable;

--$165.3 million class A-FL notes at 'AAAsf'; Outlook Stable;

--$0 class A-FX notes at 'AAAsf'; Outlook Stable;

--$82.8 million class A-S notes at 'AAAsf'; Outlook Stable;

--Interest-only class X-A at 'AAA'; Outlook Stable;

--$58 million class B notes at 'AAsf'; Outlook Stable;

--$41.4 million class C notes at 'Asf'; Outlook Stable;

--$27.6 million class D notes at 'BBB+sf'; Outlook Stable;

--$48.3 million class E notes at 'BBB-sf'; Outlook Stable;

--$19.3 million class F notes at 'BBsf'; Outlook Stable;

--$19.3 million class G notes at 'Bsf'; Outlook Stable.

Fitch does not rate the class H certificates, or the interest-only class X-B. The aggregate balance of class A-FL may be adjusted as a result of the exchange of all or a portion of the class A-FL certificates for the non-offered class A-FX certificates.

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

Applicable Criteria

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=1001826

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1001826

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/20160331006396/en/

Fitch Ratings
Primary Analyst
David Ro
Director
+1-312-368-3132
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, New York, +1 212-908-0278
Email: [email protected]

Source: Fitch Ratings

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