DBRS Morningstar Confirms All Classes of BBCMS Mortgage Trust 2020-C8

DBRS Limited (DBRS Morningstar) confirmed its ratings on the Commercial Mortgage Pass-Through Certificates, Series 2020-C8 issued by BBCMS Mortgage Trust 2020-C8 Trust as follows:

-- Class A-1 at AAA (sf)
-- Class A-3 at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class A-5 at AAA (sf)
-- Class A-S at AAA (sf)
-- Class A-SB at AAA (sf)
-- Class X-A at AAA (sf)
-- Class B at AA (high) (sf)
-- Class X-B at AA (low) (sf)
-- Class C at A (high) (sf)
-- Class D at A (low) (sf)
-- Class X-D at A (low) (sf)
-- Class E at BBB (high) (sf)
-- Class X-FG at BBB (low) (sf)
-- Class F at BB (high) (sf)
-- Class G at BB (high) (sf)
-- Class X-H at BB (sf)
-- Class H at BB (low) (sf)
-- Class J-RR at B (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction. At issuance, the transaction consisted of 48 fixed-rates loans secured by 127 commercial and multifamily properties with a trust balance of $700.2 million. As of the June 2021 remittance, all loans remain in the pool and there has been negligible amortization to date. The transaction is concentrated by property type as 10 loans, representing 36.4% of the current trust balance, are secured by office collateral, while the second-largest concentration comprises 12 loans, representing 15.8% of the current trust balance, secured by self-storage collateral. There are four loans, representing 16.3% of the current trust balance, on the servicer’s watchlist for cash flow disruption, outstanding advances, and deferred maintenance. No loans are specially serviced as of June 2020.

The largest loan on the watchlist, the MGM Grand & Mandalay Bay loan, is secured by the fee-simple interests in the MGM Grand and Mandalay Bay, two full-service luxury resorts and casinos consisting of 9,748 rooms on the Las Vegas Strip. The loan was added to the servicer’s watchlist in April 2021 as a result of a suppressed debt service coverage ratio as both properties’ operations have struggled as a result of the ongoing effects of the Coronavirus Disease (COVID-19) pandemic. Both properties are now reopened and operational, although certain amenities appear to be somewhat limited. Sponsorship is provided by a joint venture between Blackstone Real Estate Income Trust (49.9%) and MGM Growth Properties (50.1%), which together acquired the property for $4.6 billion as part of a sale-lease back transaction including $1.6 billion of equity. The sponsors subsequently executed a 30-year triple net master lease with two 10-year renewal options. Under the terms of the master lease, MGM Tenant is required to make an initial master lease payment of $292 million per annum, with $159 million allocated to MGM Grand and $133 million allocated to Mandalay Bay. The loan remains current as of the June 2021 reporting.

At issuance, DBRS Morningstar shadow rated two loans investment grade, including One Manhattan West (Prospectus ID#1, 10.0% of the pool) and MGM Grand & Mandalay Bay (Prospectus ID#3, 10.0% of the pool). DBRS Morningstar maintained the shadow ratings on both loans with this review given their strong credit characteristics associated with the senior A note debt.

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.

Classes X-A, X-B, X-D, X-FG, and XH are interest-only (IO) certificates that reference a single rated tranche or multiple rated tranches. The IO rating mirrors the lowest-rated applicable reference obligation tranche adjusted upward by one notch if senior in the waterfall.

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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