CHICAGO--(BUSINESS WIRE)--Fitch Ratings has issued a presale report on RBS Commercial Funding Inc. 2013-GSP Trust Commercial Mortgage Pass-Through Certificates, Series 2013-GSP.
Fitch expects to rate the transaction and assign a Rating Outlook as follows:
--$375,000,000 class A 'AAAsf'; Outlook Stable.
The expected ratings are based on information provided by the issuer as of Dec. 5, 2013.
The certificates represent the beneficial ownership in the trust, the primary asset of which is part of a $525 million whole loan composed of the $375 million trust loan and a related, $150 million companion loan, which will not be included in the trust and is pari passu in right of payment with the trust loan. The whole loan is secured by Garden State Plaza, a 2.2 million sf super-regional mall located in Paramus, NJ. The property is anchored by Macy's, Nordstrom, Neiman Marcus and Lord & Taylor (all subject to ground leases), as well as JC Penney (owned). The collateral is approximately 96.6% leased by over 300 tenants. As of the trailing 12 months ended September 2013, the mall reported comparable in-line sales and occupancy costs of $787 psf and 17.1%, respectively. The loan was originated by The Royal Bank of Scotland plc.
KEY RATING DRIVERS
Low Leverage: Fitch's stressed debt service coverage ratio DSCR) for the trust is 1.99x, and the stressed loan to value (LTV) is 44.1%.
Strong Sales: Garden State Plaza features a diverse tenant mix that generated total sales of $927.8 million as of the trailing 12-month (TTM) period ended August 2013. As of the TTM, Nordstrom, Macy's and JC Penney reported aggregate sales that were higher than their respective national chain-sale averages. Comparable in-line sales were reported at $787 psf for the same period. The property achieves high sales levels, despite being open only six days a week due to Bergen County Blue Laws that prohibit local retailers from opening on Sundays.
High Asset Quality in Primary Market: Garden State Plaza is a high-quality, regional shopping mall in Paramus, a densely populated community less than 10 miles from Manhattan just off the New Jersey Garden State Parkway and Interstate 80. The property received a Fitch property quality grade of 'A-'.
Competition: The property is located within a highly developed retail corridor at the heavily trafficked intersection of the Garden State Parkway and State Route 17, which contains several competitive malls within close proximity (including Paramus Park, Bergen Town Center, Shops at Riverside and Willowbrook Mall).
Experienced Ownership and Management: The loan is sponsored jointly by Westfield America, Inc. (a subsidiary of Westfield Group, LLC) and Aldwych LLC and Old Kingsway LP (subsidiaries of Prudential Assurance Company Ltd.). The property has been operated and managed by Westfield Property Management, LLC since 1986.
RATING SENSITIVITIES
Fitch performed several stress scenarios in which the Fitch NCF was stressed. Fitch determined that a 76.5% reduction in Fitch's NCF would cause the notes to break even at a 1.0x DSCR, based on the actual debt service.
Fitch evaluated the sensitivity of the ratings for class A and a 10% decline in Fitch NCF would result in a one category downgrade, while a 39.8% decline would result in a downgrade to below investment grade. The Rating Sensitivity section in the presale report includes a detailed explanation of additional stresses and sensitivities.
Key Rating Drivers and Rating Sensitivities are further described in the accompanying presale report. The presale report is available to all investors on Fitch's web site 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions (September 2013)
--Global Structured Finance Rating Criteria (May 2013)
--U.S. Commercial Mortgage Servicer Rating Criteria (February 2011)
--Counterparty Criteria for Structured Finance and Covered Bonds
(May 2013)
Applicable Criteria and Related Research: RBS Commercial Funding Inc. 2013-GSP Trust (US CMBS)
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=726920
Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=718468
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661
U.S. Commercial Mortgage Servicer Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=584005
Counterparty Criteria for Structured Finance and Covered Bonds
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=707155
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=812116
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