Ratings On Nine Classes Affirmed From Wells Fargo Commercial Mortgage Trust 2016-BNK1


  • We affirmed our ratings on nine classes from Wells Fargo Commercial Mortgage Trust 2016-BNK1, a U.S. CMBS transaction.
  • The affirmations reflect our analysis of the transaction, which included a review of the credit characteristics and performance of the remaining loans in the pool, 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 nine classes of commercial mortgage pass-through 
certificates from Wells Fargo Commercial Mortgage Trust 2016-BNK1, 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.

While the available credit enhancement level may suggest a positive rating 
movement on class B, our analysis also qualitatively considered the reported 
overall declining occupancy at the three retail outlets securing the Simon 
Premium Outlets loan ($35.8 million, 4.2%) and the news that Purdue 
Pharmaceutical, which occupies 100% of the office property securing the One 
Stamford Forum loan ($67.6 million, 7.9%) is contemplating filing for 
bankruptcy in light of mounting opioid lawsuits. We will continue to monitor 
these loans for any material change in performance and assess the impact on 
the ratings, if any.

We affirmed our 'AAA (sf)' and 'A- (sf)' ratings on the class X-A and X-B 
interest-only (IO) certificates, respectively, based on our criteria for 
rating IO securities, in which the ratings on the IO securities would not be 
higher than that of the lowest-rated reference class. The notional balance on 
class X-A references classes A-1, A-2, A-3, and A-SB. The notional balance on 
class X-B references classes A-S, B, and C.

TRANSACTION SUMMARY

As of the Feb. 15, 2019, trustee remittance report, the collateral pool 
balance was $855.7 million, which is 98.3% of the pool balance at issuance. 
The pool currently includes 40 loans, the same as at issuance. None of these 
loans are with the special servicer, none are defeased, and four ($32.5 
million, 3.8%) are on the master servicer's watchlist. 

We calculated a 1.88x S&P Global Ratings weighted-average debt service 
coverage (DSC) and 83.4% S&P Global Ratings weighted-average loan-to-value 
(LTV) ratio using a 7.73% S&P Global Ratings weighted average capitalization 
rate. To date, the transaction has not reported any pool principal losses. 

The top 10 loans have an aggregate outstanding pool trust balance of $505.5 
million (59.1%). Adjusting the servicer-reported numbers, we calculated an S&P 
Global Ratings weighted average DSC and LTV of 2.08x and 79.5%, respectively, 
for the top 10 loans.
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