Fitch Ratings has affirmed
The Rating Outlooks for four classes have been revised to Stable from Negative.
RATING ACTIONS
Entity / Debt
Rating
Prior
CFCRE 2016-C4
A-3 12531YAM0
LT
AAAsf
Affirmed
AAAsf
A-4 12531YAN8
LT
AAAsf
Affirmed
AAAsf
A-HR 12531YAP3
LT
AAAsf
Affirmed
AAAsf
A-M 12531YAU2
LT
AAAsf
Affirmed
AAAsf
A-SB 12531YAL2
LT
AAAsf
Affirmed
AAAsf
B 12531YAV0
LT
AA-sf
Affirmed
AA-sf
C 12531YAW8
LT
A-sf
Affirmed
A-sf
D 12531YAE8
LT
BBB-sf
Affirmed
BBB-sf
E 12531YAF5
LT
BB-sf
Affirmed
BB-sf
Page
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VIEW ADDITIONAL RATING DETAILS
KEY RATING DRIVERS
Stable Performance: Overall pool performance and loss expectations remain stable from the prior review and since issuance. Fitch has identified ten Fitch Loans of Concern (21% of the pool balance), including two loans in special servicing (3.0%). Fitch's current ratings incorporate a base case loss of 3.10%.
The Outlook revisions to Stable from Negative reflect the reduction in FLOCs (from 41.0%) since the last rating action, as well as continued stabilization of properties affected by the pandemic and progress toward recovery of loans in special servicing.
Fitch Loans of Concern/Contributors to Loss: The largest Fitch Loan of Concern is the
Fitch's base case analysis incorporates a 10% stress to the property's YE 2019 NOI reflecting a stressed value of
The largest contributor to loss is
The next largest contributor to loss is the Marketplace at
Increasing Credit Enhancement (CE): CE has increased since issuance due to amortization and loan repayments, with 10.0% of the original pool balance repaid. The transaction has not realized any losses to date. Interest shortfalls are currently affecting the non-rated class
Alternative Loss Consideration: Fitch applied an additional sensitivity scenario on the
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative rating action/downgrade:
Downgrades would occur with an increase in pool level losses from underperforming or specially serviced loans. Downgrades to the 'AA-sf' and 'AAAsf' categories are not likely due to the position in the capital structure, but may occur should interest shortfalls affect the classes;
Downgrades to the 'BBB-sf' and A-sf' category would occur should overall pool losses increase significantly and/or one or more large loans have an outsized loss, which would erode CE. Downgrades to the 'B-sf' and 'BB-sf' categories would occur should loss expectations increase and if performance of the FLOCs fail to stabilize or additional loans default and/or transfer to the special servicer.
Factors that could, individually or collectively, lead to positive rating action/upgrade:
Factors that could lead to upgrades would include stable to improved asset performance coupled with pay down and/or defeasance. Upgrades of the 'A-sf' and 'AA-sf' categories would occur with significant improvement in CE and/or defeasance and performance improvement of the
Upgrades to the 'BBB-sf' category would be limited based on sensitivity to concentrations or the potential for future concentration. Classes would not be upgraded above 'Asf' if there is likelihood for interest shortfalls. Upgrades to the 'B-sf' and 'BB-sf' categories are not likely until the later years in a transaction and only if the performance of the remaining pool is stable and there is sufficient CE to the classes.
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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