Moody's Assigns Definitive Ratings To Wells Fargo Commercial Mortgage Trust

Moody's Investors Service has assigned definitive ratings to eight classes of CMBS securities, issued by Wells Fargo Commercial Mortgage Trust 2018-C44, Series 2018-C44, said in a statement released by Moody's.

The Certificates are collateralized by 44 fixed rate loans secured by 55 properties. The ratings are based on the collateral and the structure of the transaction, according to the statement.

"Notable strengths of the transaction include: strong market composition, cross-collateralization, and asset class composition. Notable credit challenges of the transaction include: high Moody's LTV, weak amortization profile and single tenant concentration."

"Moody's CMBS ratings methodology combines both commercial real estate and structured finance analysis" the statement added.

"Based on commercial real estate analysis, Moody's determines the credit quality of each mortgage loan and calculates an expected loss on a loan specific basis. Under structured finance, the credit enhancement for each certificate typically depends on the expected frequency, severity, and timing of future losses. Moody's also considers a range of qualitative issues as well as the transaction's structural and legal aspects."

The amortization profile for the underlying assets contains a high concentration of loans with interest-only debt service components, it said, adding thed 17 loans (43.7 percent of the pool balance), including six loans in the Top 10, are structured with interest-only payment schedules for the entire term of the loan or Anticipated Repayment Date.

Additionally 13 loans (34.9 percent of the pool balance) are structured with initial interest only periods followed by a period of amortization. The pool's full-term interest-only and partial term interest-only shares are slightly higher than the 2017 conduit-only averages of 40.5 percent and 32.9 percent respectively. - Istanbul