Fitch Affirms UBS 2012-C1

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed 10 classes of UBS Commercial Trust 2012-C1 (UBS 2012-C1) commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The affirmations are based on the stable performance of the underlying collateral pool and significant percentage of defeased assets. Per the servicer reporting, five loans (24.4% of the pool) are defeased compared with one loan (0.3%) at the last rating action. Fitch modeled losses of 3.7% of the remaining pool; expected losses on the original pool balance total 3.4%. The pool has experienced no realized losses to date. Fitch has designated seven loans (3.1%) as Fitch Loans of Concern, including four specially serviced assets (1.8%).

As of the January 2016 distribution date, the pool's aggregate principal balance has been reduced by 7.9% to $1.23 billion from $1.33 billion at issuance. Only 4.8% (in 2016) of the pool is scheduled to mature before 2021 (15.7% of the pool) and 2022 (79.5%). However, approximately 87% of the pool is amortizing.

The largest loan in the pool is the interest-only Dream Hotel Downtown Leased Fee loan (9.8% of the pool), which is secured by the fee and leasehold interests in a 315-room luxury boutique hotel, including 6,500 square feet of retail space, located in the Meatpacking District of Manhattan. The property is subject to two net leases, which have a remaining term of approximately 98 years. The net lease payments, which are the source for the loan's debt service payments, are supported by hotel operations. In the event of a default under the net leases, the sponsor may take possession of hotel operations. Per the December 2015 trailing 12 months (TTM) STR report, the Dream Hotel reports occupancy, average daily rate (ADR) and revenue per available room (RevPAR) of 85.7%, $345, and $296, respectively, with RevPAR penetration of 96.6%.

The four specially serviced assets include three cross defaulted limited service hotel loans (combined 1.3% of the pool), which were transferred in February 2015 due to a payment default on one of the locations. Additionally, several of the original guarantors have reportedly filed personal bankruptcy. The loans are all now current, and the servicer is working with the borrower, under a forbearance agreement, on a transfer of ownership interests.

The other specially-serviced loan (0.5%) is secured by two mixed use properties located in Chicago, IL. The properties, which are both situated in the Lakeview neighborhood, consist of retail, medical office, and multifamily components. Per the special servicer, the loan was transferred in January 2016 due to a non-monetary event of default. Recent performance information on the properties has not been provided.

RATING SENSITIVITIES

The Positive and Stable Outlooks on the classes reflect the significant defeasance, increasing credit enhancement and continued expected pay down from loan payoffs and scheduled amortization. Classes B and C are subject to upgrade should credit enhancement continue to improve and the underlying collateral continue its overall stable performance. Fitch does not foresee negative ratings migration unless a material economic and/or asset level event changes the transaction's portfolio-level metrics.

DUE DILIGENCE USAGE

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

Fitch has affirmed the following classes and revised Outlooks as indicated:

--$73.5 million class A-2 at 'AAAsf'; Outlook Stable;

--$657.2 million class A-3 at 'AAAsf'; Outlook Stable;

--$96 million class A-AB at 'AAAsf'; Outlook Stable;

--$113.1 million class A-S at 'AAAsf'; Outlook Stable;

--$939.7 million class X-A* at 'AAAsf'; Outlook Stable;

--$66.5 million class B at 'AAsf'; Outlook to Positive from Stable;

--$49.9 million class C at 'Asf'; Outlook to Positive from Stable.

--$74.9 million class D at 'BBB-sf'; Outlook Stable;

--$26.6 million class E at 'BBsf'; Outlook Stable;

--$23.3 million class F at 'Bsf'; Outlook Stable.

*Notional amount and interest-only.

Class A- 1 has been paid in full. Fitch does not rate the class G or X-B interest-only 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

Related Research

UBS Commercial Mortgage Trust 2012 - C1 -- Appendix

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679434

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=999074

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=999074

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/20160204006511/en/

Fitch Ratings
Primary Analyst
Stacey McGovern
Director
+1-212-908-0722
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
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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