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Rating Action:

Moody's affirms nine classes of WFRBS 2013-C16

14 Oct 2019

Approximately $670.5 million of structured securities affected

New York, October 14, 2019 -- Moody's Investors Service, ("Moody's") has affirmed the ratings on nine classes in WFRBS Commercial Mortgage Trust 2013-C16 ("WFRBS 2013-C16"), Commercial Mortgage Pass-Through Certificates Series 2013-C16 as follows:

Cl. A-3, Affirmed Aaa (sf); previously on Apr 12, 2018 Affirmed Aaa (sf)

Cl. A-4, Affirmed Aaa (sf); previously on Apr 12, 2018 Affirmed Aaa (sf)

Cl. A-5, Affirmed Aaa (sf); previously on Apr 12, 2018 Affirmed Aaa (sf)

Cl. A-SB, Affirmed Aaa (sf); previously on Apr 12, 2018 Affirmed Aaa (sf)

Cl. A-S, Affirmed Aaa (sf); previously on Apr 12, 2018 Affirmed Aaa (sf)

Cl. B, Affirmed Aa3 (sf); previously on Apr 12, 2018 Affirmed Aa3 (sf)

Cl. C, Affirmed A3 (sf); previously on Apr 12, 2018 Affirmed A3 (sf)

Cl. X-A*, Affirmed Aaa (sf); previously on Apr 12, 2018 Affirmed Aaa (sf)

Cl. PEX**, Affirmed Aa3 (sf); previously on Mar 18, 2019 Upgraded to Aa3 (sf)

*Reflects Interest-Only Class

**Reflects Exchangeable Class

RATINGS RATIONALE

The ratings on seven 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 one IO class was affirmed based on the credit quality of the referenced classes.

The rating on the exchangeable class was affirmed due to the credit quality of the referenced exchangeable classes.

Moody's rating action reflects a base expected loss of 5.5% of the current pooled balance, compared to 3.2% at Moody's last review. Moody's base expected loss plus realized losses is now 4.1% of the original pooled balance, compared to 2.8% 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 rating all classes except exchangeable classes and interest-only classes was "Approach to Rating US and Canadian Conduit/Fusion CMBS" published in July 2017. The principal methodology used in rating the exchangeable classes was "Moody's Approach to Rating Repackaged Securities" published in March 2019. The methodologies used in rating interest-only classes were "Approach to Rating US and Canadian Conduit/Fusion CMBS" published in July 2017 and "Moody's Approach to Rating Structured Finance Interest-Only (IO) Securities" published in February 2019. Please see the list of ratings at the top of this announcement to identify which classes are interest-only (indicated by the *) and exchangeable classes (indicated by the **). Please see the Rating Methodologies page on www.moodys.com for a copy of these methodologies.

DEAL PERFORMANCE

As of the September 17, 2019 distribution date, the transaction's aggregate certificate balance has decreased by 25% to $785.5 million from $1.05 billion at securitization. The certificates are collateralized by 78 mortgage loans ranging in size from less than 1% to 13% of the pool, with the top ten loans (excluding defeasance) constituting 46% of the pool. One loan, constituting 13% of the pool, has an investment-grade structured credit assessment. Seven loans, constituting 6% of the pool, have defeased and are 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 24, compared to the 30 at Moody's last review.

Six loans, constituting 35% 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. There are currently five loans in special servicing, constituting 7% of the pool. The largest loan in special servicing is the Sun Valley Village MHC Loan ($16.2 million, 2.1% of the pool), which is secured by a 263 unit manufactured housing community located in Pacheco, California approximately 19 miles northeast of Oakland and 27 miles northeast of San Francisco. The loan recently transferred to special servicing in August 2019 due to non-monetary default.

The second largest loan in special servicing is the Wyoming Hotel Portfolio Loan ($16.4 million, 2.0% of the pool), which is secured by two limited serviced hotel properties totaling 241 rooms; both of which are in Casper, Wyoming. The loan transferred to special servicer due to a declared financial default by one of the hotel's flags which was cured after the lender advanced the necessary funds. The remaining loans in special servicing are secured hotel properties: one was transferred due to a decline in performance caused by property damage from Hurricane Harvey, and the other two were transferred due to non-monetary default. Moody's estimates an aggregate loss of $22.3 million for the specially serviced loans (42% expected loss on average).

Moody's received full year 2018 operating results for 78% of the pool, and full or partial year 2019 operating results for 85% of the pool (excluding specially serviced and defeased loans). Moody's weighted average conduit LTV is 90%, the same as at Moody's last review. Moody's conduit component excludes loans with structured credit assessments, low leverage coop and defeased loans, and specially serviced and troubled loans. Moody's net cash flow (NCF) reflects a weighted average haircut of 13% 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 1.72X and 1.28X, respectively, compared to 1.73X and 1.28X 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 pool contains nine low leverage cooperative loans (3.5% of the pool balance) that were too small to credit assess; however, these loans have Moody's leverage that is consistent with other loans previously assigned an investment grade SCA.

The loan with a structured credit assessment is the Westfield Mission Valley Loan ($100 million -- 12.7% of the pool), which represents a pari-passu portion of 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. The collateral portion of the property was 92% leased as of December 2018, unchanged since December 2017. 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 closed in 2017. In-line occupancy was 86% and in-line sales were $509 PSF as of December 2018, essentially unchanged from the in-line occupancy of 86% and in-line sales of $507 PSF as of December 2017. Overall performance has remained stable. Moody's structured credit assessment and stressed DSCR are aa3 (sca.pd) and 1.49X, respectively.

The top three conduit loans represent 17.6% of the pool balance. The largest loan is the Augusta Mall Loan ($60 million -- 7.6% of the pool), which represents a pari-passu portion of 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. Penney 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. As of December 2018, the property was 96% leased and occupancy remained unchanged since December 2017. As of December 2018, in-line occupancy was 96% and in-line sales were $424 per SF. Moody's LTV and stressed DSCR are 100% and 1.03X, respectively, compared to 97% and 1.03X at the last review.

The second largest loan is the Hutton Hotel Loan ($43.0 million -- 5.4% of the pool), which is secured by a 247-room boutique luxury full-service hotel located in Nashville, Tennessee. The property is also encumbered by a $7.5 million B note. This seven-year loan was interest-only for the first 36 months and began amortizing in 2016. As of March 2019, occupancy was 72%, ADR was $245 and RevPar was $176. Performance has declined during 2017 -- 2018, when the hotel underwent renovation in the summer of 2017. Moody's LTV and stressed DSCR are 113% and 1.06X, respectively, compared to 95% and 1.25X at the last review.

The third largest loan is the David Drye Apartment Portfolio Loan ($36.5 million -- 4.6% of the pool), which is secured by five multifamily properties totaling 849 units located in North Carolina (four properties) and South Carolina (one property). The portfolio was 96% occupied as of December 2018, compared to 99% in September 2017 and 95% at securitization. Performance has steadily increased since securitization. Moody's LTV and stressed DSCR are 111% and 0.90X, compared to 113% and 0.89X at the 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, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security 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
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

Romina Padhi
VP - Senior Credit Officer
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.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

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