DBRS Morningstar Changes Trends on Six Classes, Confirms All Ratings of BBCMS Trust 2018-BXH.
ENPNewswire-September 14, 2021--DBRS Morningstar Changes Trends on Six Classes, Confirms All Ratings of BBCMS Trust 2018-BXH
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Release date- 13092021 - DBRS Inc. (DBRS Morningstar) confirmed its ratings on the Commercial Mortgage Pass-Through Certificates, issued by BBCMS Trust 2018-BXH as follows.
Class A at AAA (sf)
Class X-NCP at AAA (sf)
Class B at AA (high) (sf)
Class C at AA (low) (sf)
Class D at A (sf)
Class E at BBB (low) (sf)
Class F at BB (low) (sf)
With this review, DBRS Morningstar changed the trends on Classes A, X-NCP, B, C, D, and E to Stable from Negative. Class F continues to carry a Negative trend. The rating confirmations and trend changes reflect DBRS Morningstar's generally stable outlook for this transaction, given the sponsor's continued commitment to the transaction in funding debt service shortfalls and operating expenses during the last year amid the Coronavirus Disease (COVID-19) pandemic. The Negative trend on Class F was maintained as a reflection of the potential lasting residual effects of the pandemic.
Collateral for the trust is a $257.0 million first mortgage, floating-rate loan, which is secured by the fee-simple (16) and leasehold interests (1) in a portfolio of 17 hotels comprising 2,189 guest rooms in seven states. The borrowers' interests in each property are cross collateralized and cross defaulted. The hotels operate under franchise flags affiliated with three major brands-Marriott, Hyatt, and Hilton-with franchise agreements that extend no less than five years beyond the fully extended loan term. The trust loan proceeds were used to recapitalize the portfolio, with the sponsor retaining more than $176.0 million of equity at close. The loan benefits from strong sponsorship through BREIT Operating Partnership, an affiliate of The Blackstone Group. The loan is interest only (IO) throughout the fully extended loan term and is structured with five one-year extension options.
To date, no relief or assistance has been requested as a result of the pandemic. However, the loan was added to the servicer's watchlist in March 2021 and, as of the August 2021 reporting, it continues to be monitored for a low debt service coverage ratio (DSCR) below the 1.0 times (x) threshold and for the upcoming maturity date in October 2021. The borrowers exercised the first available extension option in October 2020, and the servicer's August 2021 commentary indicated that...
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