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Rating Action:

Moody's Affirms Eleven Classes of WFRBS 2013-C18

Global Credit Research - 04 Aug 2017

Approximately $863 Million of Structured Securities Affected

New York, August 04, 2017 -- Moody's Investors Service, ("Moody's") has affirmed the ratings on eleven classes in WFRBS Commercial Mortgage Trust 2013-C18, Commercial Mortgage Pass-Through Certificates, Series 2013-C18 as follows:

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

Cl. A-2, Affirmed Aaa (sf); previously on Sep 1, 2016 Affirmed Aaa (sf)

Cl. A-3, Affirmed Aaa (sf); previously on Sep 1, 2016 Affirmed Aaa (sf)

Cl. A-4, Affirmed Aaa (sf); previously on Sep 1, 2016 Affirmed Aaa (sf)

Cl. A-5, Affirmed Aaa (sf); previously on Sep 1, 2016 Affirmed Aaa (sf)

Cl. A-S, Affirmed Aaa (sf); previously on Sep 1, 2016 Affirmed Aaa (sf)

Cl. A-SB, Affirmed Aaa (sf); previously on Sep 1, 2016 Affirmed Aaa (sf)

Cl. B, Affirmed Aa3 (sf); previously on Sep 1, 2016 Affirmed Aa3 (sf)

Cl. C, Affirmed A3 (sf); previously on Sep 1, 2016 Affirmed A3 (sf)

Cl. PEX, Affirmed A1 (sf); previously on Sep 1, 2016 Affirmed A1 (sf)

Cl. X-A, Affirmed Aaa (sf); previously on Sep 1, 2016 Affirmed Aaa (sf)

RATINGS RATIONALE

The ratings on the P&I classes A-1 through C 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 IO class X-A was affirmed based on the credit quality of the referenced classes.

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

Moody's rating action reflects a base expected loss of 3.4 % of the current pooled balance, compared to 2.4% at Moody's last review. Moody's base expected loss plus realized losses is now 3.3% of the original pooled balance, compared to 2.4% 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 methodologies used in these ratings were "Approach to Rating US and Canadian Conduit/Fusion CMBS" published in July 2017, and "Moody's Approach to Rating Large Loan and Single Asset/Single Borrower CMBS" published in July 2017. Please see the Rating Methodologies page on www.moodys.com for a copy of these methodologies.

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 this methodology.

Additionally, the methodology used in rating Cl. X-A was "Moody's Approach to Rating Structured Finance Interest-Only (IO) Securities" published in June 2017. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

DEAL PERFORMANCE

As of the July 17, 2017 distribution date, the transaction's aggregate certificate balance has decreased by 4% to $995 million from $1.038 billion at securitization. The certificates are collateralized by 66 mortgage loans ranging in size from less than 1% to 15% of the pool, with the top ten loans (excluding defeasance) constituting 66% of the pool. Two loans, constituting 29% of the pool, have investment-grade structured credit assessments. Additionally, the pool contains fifteen cooperative loans (4%) that are too small to credit assess per Moody's structured credit assessment guidelines, but received investment grade quality treatment when analyzed by Moody's. One loan, constituting 4% of the pool, has defeased and is secured by US government securities.

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 13, the same as at Moody's last review.

Twelve loans, constituting 11% 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.

To date, no loans have liquidated from the pool. One loan, constituting 2.3% of the pool, is currently in special servicing. The specially serviced loan is the Cedar Rapids Office Portfolio ($23.3 million -- 2.3% of the pool), which is secured by two office buildings located in downtown Cedar Rapids, Iowa. The loan transferred to special servicing in May 2017 due to payment default, as well as additional defaults regarding leasing and reserve account requirements. A foreclosure suit was filed in June 2017, and a receiver was appointed later that month. The properties were 94% occupied as of December 2016, compared to 100% occupied as of December 2015.

Moody's has also assumed a high default probability for four poorly performing loans, constituting 4% of the pool, and has estimated an aggregate loss of $6 million (a 15% expected loss based on a 50% probability default) from these troubled loans.

Moody's received full year 2016 operating results for 95% of the pool, and full or partial year 2017 operating results for 70% of the pool (excluding specially serviced and defeased loans). Moody's weighted average conduit LTV is 104%, compared to 105% 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 10.4%.

Moody's actual and stressed conduit DSCRs are 1.47X and 1.12X, respectively, compared to 1.46X and 1.09X 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 first loan with a structured credit assessment is the Garden State Plaza Loan ($150.0 million -- 15.1% of the pool), which represents a 28.6% pari-passu interest in a $525 million senior mortgage. The loan is secured by a 2.2 million square foot (SF) super-regional mall located in Paramus, New Jersey. Macy's, Nordstrom, Neiman Marcus and Lord & Taylor are owned by their respective tenants and are on ground leases, while JC Penney is part of the collateral. The property underwent a $159 million re-development, which includes a new 1,800 space parking deck and the addition of about 81,330 SF of retail space. As of March 2017, occupancy at the property was 97% the same as in March 2016. Excluding Apple and auto, the trailing twelve month in-line sales were $726 per square foot (PSF) as of March 2017. Moody's structured credit assessment and stressed DSCR are aaa (sca.pd) and 1.88X, respectively, the same as at the last review.

The second loan with a structured credit assessment is The Outlet Collection | Jersey Gardens Loan ($140.0 million -- 14.1% of the pool), which represents a 40% pari-passu interest in a $350 million senior mortgage. The loan is secured by a 1.3 million SF regional outlet center mall located in Elizabeth, New Jersey. In 2013, the sponsor invested $30 million for renovations to the corridors, entrances, restrooms and food court. As of March 2017, the property was 96% leased, compared to 94% leased in March 2016. In-line tenant sales for the March 2017 trailing twelve month were $903 PSF, compared to the March 2016 trailing twelve month of $863 PSF. Moody's structured credit assessment and stressed DSCR are a3 (sca.pd) and 1.16X, respectively, the same as at the last review.

The top three conduit loans represent 24.3% of the pool balance. The largest loan is the AmericasMart Loan ($130.0 million -- 13.1% of the pool), which represents a 25% pari-passu interest in a $520 million senior mortgage. The loan is secured by a 4.56 million SF wholesale trade mart center located in Atlanta, Georgia. The property is comprised of 3.5 million SF of permanent showroom space occupied by more than 1,500 tenants and about 1.1 million SF of exhibition space that is leased to tenants during various trade shows. As of February 2017, the weighted average occupancy was 93%, compared to 89% in December 2015, and 88% in November 2014. Moody's LTV and stressed DSCR are 86.7% and 1.37X, respectively, compared to 91.6% and 1.3X at the last review.

The second largest loan is the JFK Hilton Loan ($66.0 million -- 6.6% of the pool), which is secured by a 12-story, 356-room full-service hotel located in Jamaica, New York. The property is located less than 1 mile north of John F. Kennedy International Airport. In 2012, the sponsor invested $21 million to redevelop and re-flag the property as a full-service Hilton. The March 2017 trailing twelve month occupancy, ADR and RevPar were 96.7%, $177.42 and $166.20. Moody's LTV and stressed DSCR are 136.2% and 0.83X, respectively, compared to 124.8% and 0.91X at the last review.

The third largest loan is the Hotel Felix Chicago Loan ($46.0 million -- 4.6% of the pool), which is secured by a 12-story, 225-room limited service boutique hotel located in downtown Chicago's "Gold Coast" neighborhood. The property was redeveloped in 2009 for $35 million, becoming silver LEED certified. The June 2016 trailing twelve month occupancy, ADR and RevPar were 87.7%, $132.93 and $119.71. Moody's LTV and stressed DSCR are 129.0% and 0.92X, respectively, compared to 130.7% and 0.91X at last review.

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.

Leah Zulkoski
Associate Analyst
Structured Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Keith Banhazl
Associate Managing Director
Structured Finance Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

No Related Data.
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