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Rating Action:

Moody's Affirms Eleven Classes of WFRBS 2013-C16

Global Credit Research - 24 Mar 2017

Approximately $889.1 Million of Structured Securities Affected

New York, March 24, 2017 -- Moody's Investors Service has affirmed the ratings on eleven classes in WFRBS Commercial Mortgage Trust 2013-C16, Commercial Mortgage Pass-Through Certificates, Series 2013-C16 as follows:

Cl. A-1, Affirmed Aaa (sf); previously on Jun 30, 2016 Affirmed Aaa (sf)

Cl. A-2, Affirmed Aaa (sf); previously on Jun 30, 2016 Affirmed Aaa (sf)

Cl. A-3, Affirmed Aaa (sf); previously on Jun 30, 2016 Affirmed Aaa (sf)

Cl. A-4, Affirmed Aaa (sf); previously on Jun 30, 2016 Affirmed Aaa (sf)

Cl. A-5, Affirmed Aaa (sf); previously on Jun 30, 2016 Affirmed Aaa (sf)

Cl. A-SB, Affirmed Aaa (sf); previously on Jun 30, 2016 Affirmed Aaa (sf)

Cl. A-S, Affirmed Aaa (sf); previously on Jun 30, 2016 Affirmed Aaa (sf)

Cl. B, Affirmed Aa3 (sf); previously on Jun 30, 2016 Affirmed Aa3 (sf)

Cl. C, Affirmed A3 (sf); previously on Jun 30, 2016 Affirmed A3 (sf)

Cl. PEX, Affirmed A1 (sf); previously on Jun 30, 2016 Affirmed A1 (sf)

Cl. X-A, Affirmed Aaa (sf); previously on Jun 30, 2016 Affirmed Aaa (sf)

RATINGS RATIONALE

The ratings on nine P&I classes were affirmed because the transaction's key metrics, including Moody's loan-to-value (LTV) ratio, Moody's stressed debt service coverage ratio (DSCR) and the transaction's Herfindahl Index (Herf), are within acceptable ranges.

The rating on the exchangeable class, Class PEX, was affirmed due to the weighted average rating factor (WARF) of the exchangeable classes.

The rating on the IO class, Class X-A, was affirmed based on the credit performance (or WARF) of its referenced classes.

Moody's rating action reflects a base expected loss of 2.9% of the current balance, compared to 3.2% at Moody's last review. Moody's base expected loss plus realized losses is now 2.8% of the original pooled balance, compared to 3.1% at the last review. Moody's provides a current list of base expected losses for conduit and fusion CMBS transactions on moodys.com at http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF215255.

FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS:

The performance expectations for a given variable indicate Moody's forward-looking view of the likely range of performance over the medium term. Performance that falls outside the given range can indicate that the collateral's credit quality is stronger or weaker than Moody's had previously expected.

Factors that could lead to an upgrade of the ratings include a significant amount of loan paydowns or amortization, an increase in the pool's share of defeasance or an improvement in pool performance.

Factors that could lead to a downgrade of the ratings include a decline in the performance of the pool, loan concentration, an increase in realized and expected losses from specially serviced and troubled loans or interest shortfalls.

METHODOLOGY UNDERLYING THE RATING ACTION

The principal methodology used in these ratings was "Approach to Rating US and Canadian Conduit/Fusion CMBS" published in December 2014. The methodology used in rating the exchangeable class, Cl. PEX was "Moody's Approach to Rating Repackaged Securities" published in June 2015. Please see the Rating Methodologies page on www.moodys.com for a copy of these methodologies.

Additionally, the methodology used in rating Cl. X-A was "Moody's Approach to Rating Structured Finance Interest-Only Securities" published in October 2015. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

Please note that on February 27, 2017, Moody's released a "Request for Comment" in which it has requested market feedback on proposed changes to its methodology for rating structured finance interest-only (IO) securities called "Moody's Approach to Rating Structured Finance Interest-Only Securities," dated October 20, 2015. If Moody's adopts the new methodology as proposed, the changes could affect the ratings of WFRBS 2013-C16. Please see "Moody's Proposes Revised Approach to Rating Structured Finance Interest-Only (IO) Securities", which is available at www.moodys.com, for more information about the implications of the proposed changes to the methodology on Moody's ratings.

DESCRIPTION OF MODELS USED

Moody's review used the excel-based CMBS Conduit Model, which it uses for both conduit and fusion transactions. Credit enhancement levels for conduit loans are driven by property type, Moody's actual and stressed DSCR, and Moody's property quality grade (which reflects the capitalization rate Moody's uses to estimate Moody's value). Moody's fuses the conduit results with the results of its analysis of investment grade structured credit assessed loans and any conduit loan that represents 10% or greater of the current pool balance.

Moody's uses a variation of Herf to measure the diversity of loan sizes, where a higher number represents greater diversity. Loan concentration has an important bearing on potential rating volatility, including the risk of multiple notch downgrades under adverse circumstances. The credit neutral Herf score is 40. The pool has a Herf of 27, compared to 29 at Moody's last review.

DEAL PERFORMANCE

As of the March 17, 2017 distribution date, the transaction's aggregate certificate balance has decreased by 4.0% to $1.00 billion from $1.046 billion at securitization. The certificates are collateralized by 86 mortgage loans ranging in size from less than 1% to 10.0% of the pool, with the top ten loans (excluding defeasance) constituting 45.8% of the pool. One loan, constituting 10.0% of the pool, has an investment-grade structured credit assessment. Three loans, constituting 3.9% of the pool, have defeased and are secured by US government securities.

Twelve loans, constituting 10.7% of the pool, are on the master servicer's watchlist. The watchlist includes loans that meet certain portfolio review guidelines established as part of the CRE Finance Council (CREFC) monthly reporting package. As part of Moody's ongoing monitoring of a transaction, the agency reviews the watchlist to assess which loans have material issues that could affect performance.

No loans have been liquidated from the pool and no loans are currently in special servicing. Moody's has assumed a high default probability for three poorly performing loans, constituting 4.1% of the pool, and has estimated an aggregate loss of $10.3 million (a 25% expected loss based on a 50% probability default) from these troubled loans.

Moody's received full year 2015 operating results for 98% of the pool, and full or partial year 2016 operating results for 90% of the pool (excluding specially serviced and defeased loans). Moody's weighted average conduit LTV is 94%, compared to 91% at Moody's last review. Moody's conduit component excludes loans with structured credit assessments, defeased and CTL loans, and specially serviced and troubled loans. Moody's net cash flow (NCF) reflects a weighted average haircut of 19% to the most recently available net operating income (NOI). Moody's value reflects a weighted average capitalization rate of 9.9%.

Moody's actual and stressed conduit DSCRs are 1.71X and 1.18X, respectively, compared to 1.78X and 1.24X at the last review. Moody's actual DSCR is based on Moody's NCF and the loan's actual debt service. Moody's stressed DSCR is based on Moody's NCF and a 9.25% stress rate the agency applied to the loan balance.

The loan with a structured credit assessment is the Westfield Mission Valley Loan ($100 million -- 10.0% of the pool), which represents a pari-passu interest in a $155 million mortgage loan. The collateral consists of a 998,000 square foot (SF) regional shopping mall located in San Diego, California. The loan is interest only for the entire 10-year term. As of September 2016, the property was 98% leased, virtually unchanged since securitization. Major tenants include Target, Bed Bath & Beyond, American Multi-Cinema and Nordstrom Rack. Macy's owns their own 536,000 SF store, of which approximately 400,000 SF has been identified to close in 2017. Per the borrower, there are no co-tenancy clauses tied to Macy's. Moody's does not anticipate the Macy's closure to negatively impact the mall's performance. Moody's structured credit assessment and stressed DSCR are aa3 (sca.pd) and 1.49X, respectively.

The top three conduit loans represent 19.7% of the pool balance. The largest loan is the Brennan Industrial Portfolio III Loan ($93.9 million -- 9.4% of the pool), which is secured by 24 separate industrial buildings totaling 3.3 million SF across 13 states. The loans are cross-collateralized and cross-defaulted and the tenants represent a diverse group of industries, including automotive, printing, packaging and medical. The loan is Shari'ah law compliant with each master lease subordinate to the mortgage loan. The portfolio was 100% leased as of year-end 2016, unchanged from the last review and securitization. The five-year, interest-only loan matures in August 2018. Moody's LTV and stressed DSCR are 107% and 0.93X, respectively.

The second largest conduit loan is the Augusta Mall Loan ($60 million -- 6.0% of the pool), which represents a pari-passu interest in a $170 million loan. This ten-year, interest-only loan is secured by a 500,000 SF enclosed regional mall located in Augusta, Georgia. The mall is anchored by Dillard's, Sears, Macy's and J.C. Penny and each store is excluded from the loan collateral. Dick's Sporting Goods, Barnes and Noble and H&M are the largest inline tenants at the property. The property was 99% leased as of September 2016, up from 94% at year-end 2015. The mall is also subject to a long-term ground lease that expires in December 2043 with extension options through 2068. Moody's LTV and stressed DSCR are 95% and 1.03X, respectively.

The third largest loan is the Hutton Hotel Loan ($43.6 million -- 4.3% of the pool), which is secured by a 247-room boutique luxury full-service hotel located in Nashville, Tennessee. The loan is also subject to a $7.5 million B note. This seven-year loan was interest-only for the first 36 months and began amortizing in 2016. The hotel is one of the few AAA Four Diamond accommodations in the mid-South. The property was operating at 80% occupancy as of September 2016, up slightly from 78% at securitization. Moody's LTV and stressed DSCR are 92% and 1.29X, respectively.

REGULATORY DISCLOSURES

For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions of the disclosure form.

The analysis includes an assessment of collateral characteristics and performance to determine the expected collateral loss or a range of expected collateral losses or cash flows to the rated instruments. As a second step, Moody's estimates expected collateral losses or cash flows using a quantitative tool that takes into account credit enhancement, loss allocation and other structural features, to derive the expected loss for each rated instrument.

Moody's did not use any stress scenario simulations in its analysis.

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Nicola Gomes
Analyst
Structured Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Matthew Halpern
Asst Vice President - Analyst
Structured Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

No Related Data.
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