Ratings Affirmed On Seven Classes From Waldorf Astoria Boca Raton Trust 2016-BOCA

  • We affirmed our ratings on seven classes from Waldorf Astoria Boca Raton Trust 2016-BOCA, a U.S. CMBS transaction.
  • The affirmations reflect our analysis of the collateral's credit characteristics and performance, as well as the transaction's structure and the liquidity available to the trust.
CENTENNIAL (S&P Global Ratings) March 14, 2019--S&P Global Ratings today 
affirmed its ratings on seven classes of commercial mortgage pass-through 
certificates from Waldorf Astoria Boca Raton Trust 2016-BOCA, a U.S. 
commercial mortgage-backed securities (CMBS) transaction (see list). 

For the affirmations, our credit enhancement expectation was in line with the 
affirmed rating levels.

We affirmed our rating on the class X-NCP interest-only (IO) certificates 
based on our criteria for rating IO securities, in which the rating on the IO 
security would not be higher than that of the lowest-rated reference class. 
Class X-NCP's notional balance references classes A, B, C, and D.  

In addition, we reviewed the transaction's insurance provisions and providers 
and determined that they are consistent with our property insurance criteria 
and normal market standards.

This is a stand-alone (single borrower) transaction backed by a floating-rate 
IO mortgage loan secured by a 333-acre luxury beachfront resort in Boca Raton, 
Fla. Our property-level analysis included a re-evaluation of the lodging 
property that secures the mortgage loan in the trust and considered the 
relatively stable servicer-reported net operating income and occupancy for the 
past five years (2014 through 2018). We then derived our sustainable in-place 
net cash flow (NCF), which we divided by an 8.75% S&P Global Ratings 
capitalization rate to determine our expected-case value. This yielded an 
overall S&P Global Ratings loan-to-value ratio and debt service coverage (DSC) 
of 96.3% and 1.88x (based on a loan spread of 3.42% and a capped LIBOR rate of 
1.48%), respectively, on the trust balance.

According to the Feb. 15, 2019, trustee remittance report, the IO mortgage 
loan has a trust and whole loan balance of $430.0 million and pays an annual 
floating interest rate of LIBOR plus 3.42%. The mortgage loan pays interest 
only through its fully extended maturity date of June 9, 2021. In addition, 
there is mezzanine debt totaling $285.0 million. To date, the trust has not 
incurred any principal losses.

The master servicer, KeyBank Real Estate Capital, reported a DSC of 1.96x on 
the trust balance for the 12 months ended Sept. 30, 2018, and occupancy was 
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