Morningstar Credit Ratings Assigns Preliminary Ratings for CSMC Trust 2014-SURF Commercial Mortgage Pass-Through Certificates, Series 2014-SURF (CSMC Trust 2014-SURF)

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Printer-friendly versionPrinter-friendly versionPDF versionPDF versionNEW YORK, Feb. 12, 2014--Morningstar Credit Ratings, LLC today assigned preliminary ratings for the commercial mortgage-backed securities (CMBS) transaction CSMC Trust 2014-SURF Commercial Mortgage Pass-Through Certificates, Series 2014-SURF (CSMC Trust 2014-SURF). The preliminary ratings are based on information known to Morningstar as of Feb. 12, 2014. PRELIMINARY RATINGS (AS OF FEB. 12, 2014) Class / Balance/Notional Amt / Preliminary Ratings / Morningstar DSCR / Morningstar BLTV / Morningstar ELTV / Credit Support Levels Class A $71,600,000 AAA 5.67x 25.9% 25.9% 61.7%Class XCP $71,600,000 AAA n/a n/a n/a n/aClass XNCP $71,600,000 AAA n/a n/a n/a n/aClass B $27,000,000 AA+ 4.12x 35.6% 35.6% 47.2%Class C $20,000,000 A+ 3.42x 42.9% 42.9% 36.5%Class D $26,500,000 BBB+ 2.80x 52.4% 52.4% 22.3%Class E $41,700,000 BB 2.17x 67.5% 67.5% 0.0%The key characteristics of the mortgage loan collateral supporting CSMC Trust 2014-SURF are:• One mortgage loan secured by two luxury class hotel properties located in Santa Monica, Calif., including Shutters on the Beach and Casa del Mar;• The principal balance of the first mortgage loan, which is collateral for the trust, is $186.8 million; and• The financing provides for additional subordinate mezzanine debt totaling $183.2 million.Based on information provided on the arranger’s website, Morningstar’s analysis of the loans yielded the following Morningstar metrics:• An aggregate net cash flow (NCF) of approximately $21.6 million, which is lower than the arranger’s NCF by 7.3 percent;• The loan provides for a debt service coverage ratio (DSCR) of 4.74x based upon the current interest rates and LIBOR; based upon the Morningstar-stressed LIBOR rate of 3.0 percent, the DSCR is more conservative at 2.17x;• Morningstar valued the property using the direct capitalization method with its final aggregate value of approximately $276.8 million calculated using a 7.80 percent capitalization rate; and• The Morningstar value, which equates to $846,340 per room, is 45.3 percent lower than the appraised property value of $506.1 million. The Morningstar valuation resulted in a weighted-average loan-to-value ratio (LTV) of 67.5 percent for the first mortgage loan. For complete details about the preliminary ratings of this transaction, Morningstar’s Pre-Sale analysis package, including the Pre-Sale Report, Summary of Operating Results, and the Representations, Warranties, and Enforcement Mechanisms, is available under the “Ratings Reports” tab on https://ratingagency.morningstar.com. Information subsequently received could result in the assignment of final ratings that differ from the preliminary ratings.About Morningstar Credit Ratings, LLC and Morningstar, Inc. Morningstar Credit Ratings, LLC is a Nationally Recognized Statistical Rating Organization (NRSRO) that specializes in structured credit research and ratings, and offers a wide array of services including new-issue ratings and analysis, operational risk assessments, surveillance services, data, and technology solutions.Morningstar Credit Ratings, LLC is a subsidiary of Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research in North America, Europe, Australia, and Asia.Morningstar, Inc. offers an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. Morningstar provides data on approximately 437,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 10 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its registered investment advisor subsidiaries and has more than $176 billion in assets under advisement and management as of Sept. 30, 2013. The company has operations in 27 countries.Morningstar, Inc. is not an NRSRO and its credit ratings on corporate and municipal issuers are not NRSRO credit ratings.# # #©2014 Morningstar, Inc. All Rights Reserved.MORN-R

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