Fitch Affirms MSBAM 2013-C8

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has affirmed 13 classes of Morgan Stanley Capital I, commercial mortgage pass-through certificates, series 2013-C8. A detailed list of actions follows at the end of this report.

KEY RATING DRIVERS

The affirmations are the result of stable performance of the pool since issuance. There have been no material changes to pool or loan level metrics since issuance, therefore the original rating analysis was considered in affirming this transaction. As of the October 2016 remittance, the pool's aggregate principal balance has been reduced by 17.7%. There are currently eight loans on the servicer's watchlist, representing 18.6% of the pool. Two loans are defeased, and there are no delinquent or specially serviced loans.

Overall Stable Performance: Updated financial reports were received and reviewed for all loans, and the pool continues to perform in line with the original Fitch expectations. There are two Fitch Loans of Concern, both of which are on the servicer's watchlist but are not believed to be at risk of immediate default.

Expected Losses Unchanged: Fitch modeled a base case loss of 3.99% on the remaining pool balance, or 3.3% of the original pool balance. At the last review, Fitch's projected loss on the original pool balance was 3.4%. The current expectation is in line with Fitch's base case loss projection at issuance.

Transaction Paydown: The pool's amortization is ahead of schedule, as two loans previously in the Top 5 prepaid ahead of maturity. These prepayments contributed approximately $150 million of unscheduled principal to the A-1 and A-2 bonds. Class A-1 was fully repaid with the February 2016 remittance. Credit enhancement to the outstanding classes has increased as a result.

The second largest loan in the pool is on the servicer's watchlist. Chrysler East Building (10.7% of the pool) is secured by an office building at 666 Third Avenue, adjacent to the iconic Chrysler Building, in Midtown Manhattan. At issuance, Credit Agricole was subletting its 140,369 square feet (18.8% of the NRA) at the property to various tenants. Credit Agricole's lease expired in May 2015. The borrower has been able to secure leases for the majority of space vacated by Credit Agricole; however, some of these leases were structured with free rent periods. The YE2015 DSCR declined to 1.09x from 1.98x at YE2014. Fitch expects operating income to increase once the free rent periods have burned off. The property benefits from an excellent location and strong sponsorship in Tishman Speyer, which is an experienced owner and operator of commercial real estate.

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 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:

--$19.7 million class A-2 at 'AAAsf', Outlook Stable;

--$99 million class A-SB at 'AAAsf', Outlook Stable;

--$140 million class A-3 at 'AAAsf', Outlook Stable;

--$336 million class A-4 at 'AAAsf', Outlook Stable;

--$108.1 million class A-S at 'AAAsf', Outlook Stable;

--$702.8 million* class X-A at 'AAAsf', Outlook Stable;

--$68.3 million class B at 'AA-sf', Outlook Stable;

--$68.3 million* class X-B at 'AA-sf', Outlook Stable;

--$42.7 million class C at 'A-sf', Outlook Stable;

--$0 class PST at 'A-sf', Outlook Stable;

--$48.7 million class D at 'BBB-sf', Outlook Stable;

--$19.9 million class E at 'BBsf', Outlook Stable;

--$12.8 million class F at 'Bsf', Outlook Stable.

*Notional amount and interest-only.

The class A-1 certificate has been fully repaid. The class A-S, B and C certificates may be exchanged for a related amount of the class PST certificate, and vice versa. Fitch does not rate the class G and H certificates.

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

Morgan Stanley Bank of America Merrill Lynch Trust, Series 2013-C8 -- Appendix

https://www.fitchratings.com/site/re/704267

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1013927

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1013927

Endorsement Policy

https://www.fitchratings.com/regulatory

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Fitch Ratings
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Source: Fitch Ratings

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