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Rating Action:

Moody's affirms seven classes of MSBAM 2015-C21

06 Oct 2020

Approximately $638 million of structured securities affected

New York, October 06, 2020 -- Moody's Investors Service, ("Moody's") affirmed the ratings on seven classes in Morgan Stanley Bank of America Merrill Lynch Trust 2015-C21, Commercial Mortgage Pass-Through Certificates Series 2015-C21 as follows:

Cl. A-3, Affirmed Aaa (sf); previously on Jun 2, 2019 Affirmed Aaa (sf)

Cl. A-4, Affirmed Aaa (sf); previously on Jun 2, 2019 Affirmed Aaa (sf)

Cl. A-SB, Affirmed Aaa (sf); previously on Jun 2, 2019 Affirmed Aaa (sf)

Cl. A-S, Affirmed Aa1 (sf); previously on Jun 2, 2019 Affirmed Aa1 (sf)

Cl. B, Affirmed Aa3 (sf); previously on Jun 2, 2019 Affirmed Aa3 (sf)

Cl. X-A*, Affirmed Aa1 (sf); previously on Jun 2, 2019 Affirmed Aa1 (sf)

Cl. X-B*, Affirmed Aa3 (sf); previously on Jun 2, 2019 Affirmed Aa3 (sf)

* Reflects interest-only classes

RATINGS RATIONALE

The ratings on the 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 ratings on the IO classes were affirmed based on the credit quality of the referenced classes.

The coronavirus outbreak, the government measures put in place to contain it, and the weak global economic outlook continue to disrupt economies and credit markets across sectors and regions. Our analysis has considered the effect on the performance of commercial real estate from the current weak US economic activity and a gradual recovery for the coming months. Although an economic recovery is underway, it is tenuous and its continuation will be closely tied to containment of the virus. As a result, the degree of uncertainty around our forecasts is unusually high. Stress on commercial real estate properties will be most directly stemming from declines in hotel occupancies (particularly related to conference or other group attendance) and declines in foot traffic and sales for non-essential items at retail properties.

We regard the coronavirus outbreak as a social risk under our ESG framework, given the substantial implications for public health and safety.

Moody's rating action reflects a base expected loss of 8.4% of the current pooled balance, compared to 5.3% at Moody's last review. Moody's base expected loss plus realized losses is now 7.7% of the original pooled balance, compared to 5.1% 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 rating all classes except interest-only classes was "Approach to Rating US and Canadian Conduit/Fusion CMBS" published in September 2020 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBS_1244778. The methodologies used in rating interest-only classes were "Approach to Rating US and Canadian Conduit/Fusion CMBS" published in September 2020 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBS_1244778 and "Moody's Approach to Rating Structured Finance Interest-Only (IO) Securities" published in February 2019 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBS_1111179. Please see the list of ratings at the top of this announcement to identify which classes are interest-only (indicated by the *). Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of these methodologies.

DEAL PERFORMANCE

As of the September 17, 2020 distribution date, the transaction's aggregate certificate balance has decreased by 8.6% to $796 million from $871 million at securitization. The certificates are collateralized by 62 mortgage loans ranging in size from less than 1% to 7.9% of the pool, with the top ten loans (excluding defeasance) constituting 53.9% of the pool. One loan, constituting 7.5% of the pool, have investment-grade structured credit assessments.

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 25, compared to 27 at Moody's last review.

As of the September 2020 remittance report, loans representing 74% were current or within their grace period on their debt service payments, 1% were beyond their grace period but less than 30 days delinquent and 2% were between 30 -- 59 days delinquent.

Fourteen loans, constituting 17.5% 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. Four loans, constituting 21.3% of the pool, are currently in special servicing. Three of the specially serviced loans, representing 15.2% of the pool, have transferred to special servicing since March 2020.

The largest specially serviced loan is the Westfield Palm Desert Mall Loan ($62.5 million -- 7.9% of the pool), which represents a pari passu portion of a $125 million senior mortgage loan. The loan is secured by a 573,000 SF component of a 978,000 SF super-regional mall located in Palm Desert, California. At securitization, the mall's three non-collateral anchors were Macy's, Sears, and J.C. Penney. However, the Sears closed in February 2020. Other major tenants include a Dick's Sporting Goods (46,700 SF, lease expiration in January 2024) and a 10-screen Tristone Cinema (32,600SF; lease expiration in July 2021). The property was 90% leased as of March 2020, compared to 95% in December 2018 and 96% in September 2017. The loan transferred to special servicing in June 2020 due to delinquent payments as a result of the coronavirus pandemic. The loan is currently paid through its April 2020 payment date. The property's 2019 NOI declined 12% year over year primarily due to lower rental revenue and the 2019 NOI is 24% below underwritten levels. The property was closed for two months and reopened in early September 2020, limited to 25% capacity, however, the cinema has remains closed as of October 1, 2020.

The second largest specially serviced loan is the Ashford Hotel Portfolio Loan ($49.6 million -- 6.2% of the pool), which is secured by three Marriott branded hotel properties located in three different states. The portfolio contains a total of 662 rooms, consisting of 350 rooms at the full-service Residence Inn Orlando Sea World in Orlando, Florida; 144 rooms at the extended stay Residence Inn Cottonwood in Salt Lake City, Utah and 168 rooms at the select service Courtyard Overland Park in Overland Park, Kansas. The portfolio had an average occupancy and RevPAR of 76% and $96.5 for the trailing 12-month period ending December 2019, compared to 70% and $86.9, respectively, in 2018. The overall portfolio performance improved year over year in 2019 primarily due to an increase in occupancy at the Residence Inn Orlando Sea World. The loan is currently amortizing and has paid down 9.7% since securitization. As a result of the coronavirus pandemic, the borrower informed that they could not make the April payment and sent a letter requesting up to 18 month forbearance and sent a separate letter asking to suspend FF&E payments and to release funds in FF&E reserve to borrower. The loan transferred to special servicing in June 2020 due to delinquent payments. As of September 2020, the lender and borrower continue to discuss possible relief alternatives, though special servicer commentary indicated an agreement is not imminent. The loan is paid through March 2020. Due to the historical performance, the loan was included in the conduit statistics below with a Moody's LTV of 109%.

The third largest specially serviced loan is the Fontainebleau Park Plaza ($49.0 million -- 6.2% of the pool), is secured by the borrower's fee simple interest in a recently constructed Class-A community shopping center anchored by Wal-Mart located in Miami, Florida. The loan was transferred to special servicing in January 2017 due to non-monetary default, after the master servicer determined that the tenants at the property were not making their full rent and CAM reimbursement deposits into the lockbox. The loan is currently paid through March 2020 and the property was 100% leased to 17 tenants in December 2018. The special servicer indicated that litigation between the borrower and the lender is ongoing.

The remaining specially serviced loan is secured by a Class-B, three-story office building, located in the Denver MSA, within Arapahoe County. The property has suffered from declining NOI and occupancy since securitization.

Moody's has also assumed a high default probability for five poorly performing loans, constituting 5.3% of the pool. The largest troubled loan is Stone Ridge Plaza (2.3% of the pool) which is secured by a retail center in Greece, NY. The loan is on the master servicer's watchlist due to low DSCR and the loan is currently listed as 30 days delinquent. The Ashford Hotel Portfolio Loan was included in the conduit statistics with a Moody's LTV of 109% and Moody's estimates an aggregate $45.6 million loss (28% expected loss on average) for the remaining specially serviced loans and troubled loans.

Moody's received full or partial year 2019 operating results for 94% of the pool (excluding specially serviced and defeased loans). Moody's weighted average conduit LTV is 104%, compared to 111% at Moody's last review. Moody's conduit component excludes loans with structured credit assessments, defeased and CTL loans, and specially serviced (other than the Ashford Hotel Portfolio loan that was included in the conduit statistics) and troubled loans. Moody's net cash flow (NCF) reflects a weighted average haircut of 21% to the most recently available net operating income (NOI). Moody's value reflects a weighted average capitalization rate of 10.0%.

Moody's actual and stressed conduit DSCRs are 1.62X and 1.10X, respectively, compared to 1.61X and 1.01X 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 555 11th Street NW Loan ($60.0 million -- 7.5% of the pool), which represents a pari passu portion of a $90 million senior mortgage loan. The loan is secured by a 414,204 square foot (SF), Class A office building situated between the White House and the US Capitol Building in Washington, D.C. As of December 2019, the property was 99% leased, compared to 88% as of December 2018. The loan is also structured with a subordinate debt of $30 million in the trust as two non-pooled ("rake") classes that are not rated by Moody's, as well as additional subordinate debt of $57 million and mezzanine debt of $50 million held outside the trust. The two largest tenants include Latham & Watkins (58% of the NRA, lease expiration in January 2031) and Silver Cinemas (10% of NRA; lease expiration in March 2032). Due to the tenant concentration of the largest tenant, Moody's analysis included a lit/dark analysis on the Latham & Watkins space. Moody's structured credit assessment and stressed DSCR on the pooled portion is a2 (sca.pd) and 1.66X, respectively, the same as Moody's last review.

The largest non-specially serviced loan without a structured credit assessment is the Discovery Business Center Loan ($59.2 million -- 7.4% of the pool), which represents a pari passu portion of a $168 million first mortgage loan. The loan is secured by a 1.29 million SF Class A office park located in Irvine, California. The property has a granular rent roll with the largest tenant occupying approximately 7% of the property's net rentable area (NRA). The property was 88% leased as of March 2020, compared to 94% in June 2019. Property performance has improved since securitization due to higher rental revenue. The loan has amortized approximately 1% since securitization and Moody's LTV and stressed DSCR are 97% and 1.04X, respectively, compared to 98% and 1.02X at Moody's 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 in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.

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.

The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.

These ratings are solicited. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.

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

Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1133569.

At least one ESG consideration was material to the credit rating action(s) announced and described above.

The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the EU and is endorsed by Moody's Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that issued the credit rating is available on www.moodys.com.

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.

Rhett Terrell
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

Matthew Halpern
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.
© 2021 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S CREDIT RATINGS AFFILIATES ARE THEIR CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY’S (COLLECTIVELY, “PUBLICATIONS”) MAY INCLUDE SUCH CURRENT OPINIONS. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE APPLICABLE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS (“ASSESSMENTS”), AND OTHER OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. AND/OR ITS AFFILIATES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

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