DBRS Morningstar Confirms All Classes of CSMC 2019-ICE4

DBRS Limited (DBRS Morningstar) confirmed all classes of Commercial Mortgage Pass-Through Certificates, Series 2019-ICE4 issued by CSMC 2019-ICE4 as follows:

-- Class A at AAA (sf)
-- Class B at AAA (sf)
-- Class C at AA (high) (sf)
-- Class D at A (high) (sf)
-- Class E at BBB (low) (sf)
-- Class F at BB (sf)
-- Class HRR at B (high) (sf)

All trends are Stable.

The loan is secured by 64 industrial cold storage and distribution facilities in 22 states, primarily California (23.8% of the pool balance), Washington (14.0% of the pool balance), and Texas (13.3% of the pool balance). The servicer confirmed the receipt of the sponsor’s request to exercise an available extension option for the loan’s initial maturity date of March 2021 and DBRS Morningstar is awaiting confirmation that the extension was executed. In the event the extension is not executed, a cash flow sweep will be triggered.

At issuance, 60 of the properties were master leased by Lineage Logistics, LLC, an affiliate of the borrower, Lineage Logistics Holdings, LLC (Lineage), with the remaining four properties master leased to Southeast Frozen Foods Company, L.P. (SEFF). In April 2021, DBRS Morningstar received a Rating Agency Confirmation request noting that Lineage will be taking over the operations of SEFF because of the company’s performance difficulties. As of March 2021, SEFF had failed to pay two months of deferred rent and insurance payments to Lineage since November 2020, triggering an Event of Default. SEFF pays an annual rent of $2.6 million, approximately 1.3% of the portfolio’s total annual rent of $198.0 million, but as of March 2021, SEFF reported past due amounts totalling $652,651, of which $217,465 is deferred rent. The remaining balance is allocated between insurance, property taxes, interest, and penalties.

Although SEFF had reported financial difficulties, it is noteworthy that Lineage will be taking over SEFF’s operations. The takeover includes an amendment to the Lineage master lease to include the remaining four properties from SEFF. The rental rate will be reset to the market level and the SEFF master lease will be terminated.

As of YE2020, the subject portfolio reported an occupancy rate of 100.0% and a net cash flow (NCF) of $227.3 million, compared with the YE2019 NCF of $209.8 million and DBRS Morningstar NCF of $226.6 million.

ESG CONSIDERATIONS
A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/373262.

All ratings are subject to surveillance, which could result in ratings being upgraded, downgraded, placed under review, confirmed, or discontinued by DBRS Morningstar.

The DBRS Viewpoint platform provides additional information on this transaction and underlying loans including DBRS Morningstar metrics, commentary, servicer-reported cash flows, and other performance-related data.

For complimentary access to this content, please register for the DBRS Viewpoint platform at www.viewpoint.dbrsmorningstar.com. The platform includes issuer and servicer data for most
outstanding CMBS transactions (including non-DBRS Morningstar rated), as well as loan-level and transaction-level commentary for most DBRS Morningstar-rated and -monitored transactions.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is North American CMBS Surveillance Methodology (March 26, 2021), which can be found on dbrsmorningstar.com under Methodologies & Criteria. For a list of the structured-finance-related methodologies that may be used during the rating process, please see the DBRS Morningstar Global Structured Finance Related Methodologies document, which can be found on dbrsmorningstar.com in the Commentary tab under Regulatory Affairs. Please note that not every related methodology listed under a principal structured finance asset class methodology may be used to rate or monitor an individual structured finance or debt obligation.

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/357883.

For more information regarding structured finance rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/358308.

For more information regarding the structured finance rating approach and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/359905.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at info@dbrsmorningstar.com.

The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the rating process. Please note a sensitivity analysis is not performed for CMBS bonds rated CCC or lower. The DBRS Morningstar long-term rating scale definition indicates that ratings of CCC or lower are assigned when the bond is highly likely to default or default is imminent, thereby prevailing over a sensitivity analysis.

For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com.

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