Approximately $14 Million of Structured Securities Affected
New York, September 01, 2016 -- Moody's Investors Service (Moody's) upgraded two and affirmed three classes
of GMAC Commercial Mortgage Securities, Inc. Series 2002-C3
Trust as follows:
Cl. K, Upgraded to B1 (sf); previously on Oct 9,
2015 Upgraded to B3 (sf)
Cl. L, Upgraded to Caa1 (sf); previously on Oct 9,
2015 Affirmed C (sf)
Cl. M, Affirmed C (sf); previously on Oct 9, 2015
Affirmed C (sf)
Cl. N, Affirmed C (sf); previously on Oct 9, 2015
Affirmed C (sf)
Cl. X-1, Affirmed Caa3 (sf); previously on Oct
9, 2015 Affirmed Caa3 (sf)
RATINGS RATIONALE
The ratings on two P&I class were upgraded due to lower anticipated
losses from loans in special servicing.
The ratings on two P&I classes were affirmed because the ratings are
consistent with Moody's expected loss.
The rating on the IO class X-1 was affirmed based on the credit
performance (or the weighted average rating factor or WARF) of the referenced
classes.
Moody's rating action reflects a base expected loss of 23.3%
of the current balance, compared to 33.3% at Moody's
last review. Moody's base expected loss plus realized losses is
now 3.7% of the original pooled balance, compared
to 4.3% 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 "Moody's
Approach to Rating Large Loan and Single Asset/Single Borrower CMBS" published
in October 2015. Please see the Ratings Methodologies page on www.moodys.com
for a copy of this methodology.
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 3,
compared to 5 at Moody's last review.
DEAL PERFORMANCE
As of the August 10, 2016 distribution date, the transaction's
aggregate certificate balance has decreased by 98% to $14
million from $777 million at securitization. The certificates
are collateralized by 6 mortgage loans ranging in size from 3%
to 50% of the pool.
Eleven loans have been liquidated from the pool, resulting in an
aggregate realized loss of $25 million (for an average loss severity
of 39%). Two loans, constituting 81% of the
pool, are currently in special servicing. The specially serviced
loans are secured by a mix of property types. Moody's estimates
an aggregate $3.4 million loss for the specially serviced
loans (28% expected loss on average).
The largest specially serviced loan is the Lake Park Pointe Shopping Center
loan ($7.4 million -- 50.3% of the pool),
which is secured by a 80,000 square foot (SF) retail shopping center
in Chicago, Illinois. The loan transferred to special servicing
in April 2012 due to the largest tenant vacating in 2011. A loan
modification in April 2013 included an interest reduction to 5%
from 7.1% and an initial forbearance extension. There
have been additional forbearance periods executed. As of June 2016,
the property was 74% leased and major tenants at the property include
Ross Dress for Less and Walgreens.
The other specially serviced loan is the Vista Office Center ($4.6
million -- 31.4% of the pool), which is secured
by a 46,000 SF office building in Temecula, California.
The loan initially transferred to special servicing in October 2012 due
to imminent maturity default and became REO in June 2013. As of
July 2016 the property was 68% leased.
Moody's received full year 2015 operating results for 90% of the
pool. Moody's weighted average conduit LTV is 41%,
compared to 86% at Moody's last review. Moody's
conduit component excludes loans with credit assessments, defeased
and CTL loans, and specially serviced and troubled loans.
Moody's net cash flow (NCF) reflects a weighted average haircut
of 34% to the most recently available net operating income (NOI).
Moody's value reflects a weighted average capitalization rate of
9.2%.
Moody's actual and stressed conduit DSCRs are 0.81X and 2.69X,
respectively, compared to 1.59X and 1.51X 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 top three loans represent 13% of the pool balance.
The largest performing loan is the Walgreens Savannah Loan ($0.8
million -- 5.6% of the pool), which is secured
by a 15,120 SF Walgreens anchored retail property in Savannah,
Georgia. This property is 100% leased to Walgreens until
November 2061. The loan is fully amortizing and will mature in
October 2021. Moody's LTV and stressed DSCR are 41% and
2.65X, respectively, compared to 45% and 2.38X
at prior review.
The second largest performing loan is the Walgreens Hattiesburg MS Loan
($0.6 million -- 4.5% of the pool),
which is secured by a retail property that is currently 100% leased
to Walgreens in Hattiesburg, Mississippi. The loan is fully
amortizing and will mature in July 2019. Moody's LTV and stressed
DSCR are 36% and 3.03X, respectively, compared
to 43% and 2.51X at prior review.
The third largest performing loan is the Walgreens Madison Hoy Loan ($0.4
million -- 3.2% of the pool), which is secured
by a 13,905 SF Walgreens anchored retail property in Madison,
Mississippi. This property is currently vacant, however,
Walgreens will continue to pay rent until lease termination. The
loan is fully amortizing and will mature in January 2019. Moody's
LTV and stressed DSCR are 48% and 2.28X, respectively,
compared to 30% and 3.57X at prior 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.
Tulay Sangiray
Associate 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
Keith Banhazl
Associate Managing Director
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
