Fitch Ratings has affirmed 14 classes of BANK 2017-BNK9 commercial mortgage pass-through certificates, series 2017-BNK9.
In addition, the Rating Outlooks on four classes were revised to Stable from Negative.
RATING ACTIONS
Entity / Debt
Rating
Prior
BANK 2017-BNK9
A-3 06540RAD6
LT
AAAsf
Affirmed
AAAsf
A-4 06540RAE4
LT
AAAsf
Affirmed
AAAsf
A-S 06540RAH7
LT
AAAsf
Affirmed
AAAsf
A-SB 06540RAC8
LT
AAAsf
Affirmed
AAAsf
B 06540RAJ3
LT
AA-sf
Affirmed
AA-sf
C 06540RAK0
LT
A-sf
Affirmed
A-sf
D 06540RAU8
LT
BBB-sf
Affirmed
BBB-sf
E 06540RAW4
LT
Bsf
Affirmed
Bsf
F 06540RAY0
LT
CCCsf
Affirmed
CCCsf
Page
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VIEW ADDITIONAL RATING DETAILS
KEY RATING DRIVERS
Improved Loss Expectations: The Rating Outlook revisions to Stable from Negative on classes D, E, X-D and X-E reflect improved loss expectations for the overall pool since Fitch's last rating action due to the performance stabilization of several loans that were negatively affected by the pandemic. Fitch's current ratings incorporate a base case loss of 5.90%.
Twelve loans are designated as Fitch Loans of Concern (FLOCs; 42.5% of pool), which include three specially serviced loans (7.0%). One specially serviced hotel loan,
The largest increase in loss since the last rating action is the
The next largest increase in loss since the last rating action is the
Non-collateral anchors include
Occupancy was 91% as of
Increased Credit Enhancement (CE) and Defeasance: As of 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' rated classes are not likely due to the increasing CE, expected continued paydown and overall stable to improving performance, but may occur should interest shortfalls affect these classes. Downgrades to the 'BBB-sf' and 'A-sf' rated classes may occur should pool loss expectations increase significantly and should all of the FLOCs suffer losses, which would erode CE. Downgrades to 'Bsf' and 'CCCsf' rated classes would occur with a greater certainty of loss or should loss expectations increase from continued performance decline of the FLOCs, additional loans default or transfer to special servicing and/or higher losses are incurred on the specially serviced loans than expected.
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:
Upgrades would occur with stable to improved asset performance, particularly on the FLOCs, coupled with additional paydown and/or defeasance. Upgrades to 'BBB-sf', 'A-sf' and 'AA-sf' rated classes would only occur with significant improvement in CE, defeasance, and/or performance stabilization of FLOCs and other properties affected by the pandemic.
Upgrades to 'Bsf' and 'CCCsf' rated classes are not likely until the later years of the transaction and only if the performance of the remaining pool is stable and/or properties vulnerable to the pandemic return to pre-pandemic levels, the number of FLOCs is reduced and there is sufficient CE to the classes. Classes would not be upgraded above 'Asf' if there were likelihood of interest shortfalls.
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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