Fitch Ratings has affirmed 14 classes of
The Rating Outlooks have been revised to Stable from Negative on five classes and remain Negative on three classes.
RATING ACTIONS
Entity / Debt
Rating
Prior
SGCMS 2016-C5
A-2 78419CAB0
LT
AAAsf
Affirmed
AAAsf
A-3 78419CAC8
LT
AAAsf
Affirmed
AAAsf
A-4 78419CAD6
LT
AAAsf
Affirmed
AAAsf
A-M 78419CAF1
LT
AAAsf
Affirmed
AAAsf
A-SB 78419CAE4
LT
AAAsf
Affirmed
AAAsf
B 78419CAK0
LT
AA-sf
Affirmed
AA-sf
C 78419CAL8
LT
A-sf
Affirmed
A-sf
D 78419CAV6
LT
BBB-sf
Affirmed
BBB-sf
E 78419CAX2
LT
B-sf
Affirmed
B-sf
Page
of 2
VIEW ADDITIONAL RATING DETAILS
KEY RATING DRIVERS
Stable Loss Expectations: While Fitch's base case loss expectations have remained relatively stable since Fitch's prior rating action, the Outlook revisions to Stable from Negative reflect the better than expected performance of loans expected to be affected by the coronavirus pandemic. Fifteen loans (41.6% of pool), including eight (19.3%) in special servicing, were designated Fitch Loans of Concern (FLOCs).
Fitch's current ratings reflect a base case loss of 6.90%. The Negative Outlooks reflect losses that could reach 7.50% after factoring in an additional sensitivity on one retail loan (4.4%) and one hotel loan (2.1%) to reflect vulnerability to the ongoing pandemic.
The largest contributor to Fitch's loss expectations,
Regional Mall FLOCs: The largest loan in the pool,
Per the
The loan is sponsored by
Comparable in-line tenant sales were
Alternative Loss Consideration: Fitch applied a sensitivity to AG Lifetime Fitness Portfolio (4.4%) to reflect non-credit worthy single tenant/binary risks and special use nature of the properties and a pandemic related stress to
Increasing Credit Enhancement (CE): As of the
Pool Concentration: The top 10 loans comprise 46.7% of the pool. Loan maturities are concentrated in 2026 (66.9%), with three loans (11.1%) maturing in 2022 and 10 (22.0%) in 2025. Based on property type, the largest concentrations are retail at 33.3%, office at 32.6% and hotel at 18.9%.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative rating action/downgrade:
Downgrades of the 'AAAsf' classes are not likely due to sufficient CE and the expected receipt of continued amortization but could occur if interest shortfalls affect the class. Classes B, X-B, C and D would be downgraded if interest shortfalls affect the class, additional loans become FLOCs or if performance of the FLOCs deteriorates further. Classes E, X-E, F and X-F would be downgraded if loss expectations increase, additional loans transfer to special servicing or losses are realized.
Factors that could, individually or collectively, lead to positive rating action/upgrade:
Upgrades of classes B, X-B, C and D may occur with significant improvement in CE and/or defeasance, but would be limited based on sensitivity to concentrations or the potential for future concentration. Classes would not be upgraded above 'Asf' if there is a likelihood for interest shortfalls. Upgrades of classes E, X-E, F and X-F could occur if performance of the FLOCs improves significantly and/or if there is sufficient CE, which would likely occur if the non-rated classes are not eroded and the senior classes pay-off.
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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