Morningstar Credit Ratings Assigns Preliminary Ratings for Morgan Stanley Capital I Trust 2014-150E, Commercial Mortgage Pass-Through Certificates, Series 2014-150E (MSCI 2014-150E)

NEW YORK, Sept. 11, 2014 /PRNewswire/ -- Morningstar Credit Ratings, LLC today assigned preliminary ratings for the commercial mortgage-backed securities (CMBS) transaction Morgan Stanley Capital I Trust 2014-150E, Commercial Mortgage Pass-Through Certificates, Series 2014-150E (MSCI 2014-150E). The preliminary ratings are based on information known to Morningstar as of Sept. 10, 2014.

The key characteristics of the mortgage loan collateral supporting MSCI 2014-150E are:

• A single fixed-rate, 10-year mortgage loan secured by the borrower's leasehold interest in 150 E. 42nd St. in the Grand Central submarket of New York. Improvements on the land consist of a 42-story, 1.7-million-square-foot Class A office property located directly across from Grand Central Terminal;
• The principal balance of the mortgage loan, which is collateral for the trust, is $525.0 million; and
• The transaction includes subordinate debt in the form of a $175.0 million mezzanine loan, which also has a 10-year term.

Based on information provided on the arranger's website, Morningstar's analysis of the loan yielded the following Morningstar metrics:

• A net cash flow (NCF) of $43.2 million, which is lower than the arranger's NCF by 14.30 percent;
• The Morningstar interest-only debt service coverage ratio (DSCR) is 1.91x, based on the actual interest rate of 4.29 percent;
• Using the capitalization rate of 6.50 percent, Morningstar valued the term value and balloon value of the property at $658.4 million and $630.4 million, respectively;
• The Morningstar values, which equate to $384 per square foot for term value and $368 per square foot for balloon value, are 26.80 percent and 30.00 percent lower, respectively, than the appraised value of $900.0 million; and
• The Morningstar values resulted in a beginning term loan/value (LTV) ratio of 79.00 percent and a balloon LTV ratio of 83.20 percent for the first mortgage loan.

For complete details about the preliminary ratings for this transaction, Morningstar's Presale Analysis Package, including the Presale Report and the Representations, Warranties, and Enforcement Mechanisms, is available under the Ratings Reports tab at https://ratingagency.morningstar.com. Information subsequently received could result in the assignment of final ratings that differ from the preliminary ratings.

About Morningstar Credit Ratings, LLC and Morningstar, Inc.
Morningstar Credit Ratings, LLC is a Nationally Recognized Statistical Rating Organization (NRSRO) that specializes in structured credit research and ratings and offers a wide array of services including new-issue ratings and analysis, operational risk assessments, surveillance services, data, and technology solutions.

Morningstar Credit Ratings, LLC is a subsidiary of Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research in North America, Europe, Australia, and Asia.

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Morningstar, Inc. is not an NRSRO, and its credit ratings on corporate issuers are not NRSRO credit ratings.

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