Fitch Ratings has affirmed 14 classes of
The Rating Outlooks on classes A-S, B, X-B, C, D and X-D have been revised to Stable from Negative.
RATING ACTIONS
Entity / Debt
Rating
Prior
MSC 2016-UBS12
A-3 61691EAZ8
LT
AAAsf
Affirmed
AAAsf
A-4 61691EBA2
LT
AAAsf
Affirmed
AAAsf
A-S 61691EBD6
LT
AAAsf
Affirmed
AAAsf
A-SB 61691EAY1
LT
AAAsf
Affirmed
AAAsf
B 61691EBE4
LT
AA-sf
Affirmed
AA-sf
C 61691EBF1
LT
A-sf
Affirmed
A-sf
D 61691EAJ4
LT
Bsf
Affirmed
Bsf
E 61691EAL9
LT
CCCsf
Affirmed
CCCsf
F 61691EAN5
LT
CCCsf
Affirmed
CCCsf
Page
of 2
VIEW ADDITIONAL RATING DETAILS
KEY RATING DRIVERS
Increased Credit Enhancement (CE): The affirmations and Outlook revisions to Stable reflect improving CE, primarily due to loan payoffs and amortization. As of the
Continued High Loss Expectations: The high loss expectations are driven primarily by the continued underperformance of the Wolfchase Galleria (9.2%), and concerns about refinanceability. There are seven Fitch Loans of Concern (FLOCs). Four loans are in special servicing, which includes two loans (7.5%) that are still current.
Largest Contributor to Loss: The largest contributor to loss is the Wolfchase Galleria loan (6.1%), which is secured by a 391,862-sf interest in a regional mall located in
Collateral occupancy has remained in the high 70s for several years after declining from 81% at YE 2019: 79% (
The next largest contributor to loss is the
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative rating action/downgrade:
Downgrades to classes A-3 through C are not expected given the position in the capital structure but may occur should interest shortfalls affect these classes.
Downgrades to the classes rate B-sf', would occur if loss expectations increase significantly and/or the FLOCs decline and/or fail to stabilize or should losses from specially serviced loans/assets be larger than expected.
Downgrades to the distressed classes rated 'CCCsf' would occur with a greater certainty of losses and/or as losses are realized.
Fitch has identified both a baseline and a worse-than-expected, adverse stagflation scenario based on fallout from the
Factors that could, individually or collectively, lead to positive rating action/upgrade:
Sensitivity factors that lead to upgrades would include stable to improved asset performance, particularly on the FLOCs, coupled with paydown and/or defeasance. Upgrades of the 'AA-sf' and 'A-sf' category would likely occur with significant improvement in CE and/or defeasance; however, adverse selection and increased concentrations or the underperformance of particular loan(s) could cause this trend to reverse.
Classes would not be upgraded above 'Asf' if there is likelihood for interest shortfalls.
The 'Bsf' and 'CCCsf' classes are unlikely to be upgraded absent significant performance improvement and substantially higher recoveries than expected on the specially serviced loans/assets.
Best/Worst Case Rating Scenario
International scale credit ratings of Structured Finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit https://www.fitchratings.com/site/re/10111579.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg
Additional information is available on www.fitchratings.com
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