DBRS Morningstar Confirms Ratings on MF1 2021-FL5, Ltd.

DBRS Limited (DBRS Morningstar) confirmed the ratings on all classes of notes issued by MF1 2021-FL5, Ltd. as follows:

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

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction, which has remained in line with DBRS Morningstar’s expectations since issuance. In conjunction with this press release, DBRS Morningstar has published a Surveillance Performance Update report with in-depth analysis and credit metrics for the transaction and with business plan updates on select loans. To access this report, please click on the link under Related Documents below or contact us at info@dbrsmorningstar.com.

The transaction closed in March 2021 with an initial collateral pool of 35 floating-rate mortgage loans secured by 49 multifamily and five senior housing properties totaling $1.2 billion (56.7% of the total fully funded balance), excluding $298.0 million of remaining future funding commitments and $599.1 million of pari passu debt. Most loans were in a period of transition with plans to stabilize and improve asset value. The transaction included a 90-day ramp-up acquisition period following the closing date, which was completed in June 2021 when the cumulative loan balance totaled $1.19 billion. The transaction is structured with a Replenishment Period through the March 2024 Payment Date, whereby the Issuer may acquire Funded Companion Participations into the trust.

As of the February 2022 remittance, the pool comprises 31 loans secured by 48 properties with a cumulative trust balance of $1.1 billion. Since issuance, four loans have successfully repaid from the pool, resulting in bond amortization of 5.2%. The Replenishment Account has a current balance of $68.5 million. In general, borrowers are progressing toward completing the stated business plans, as through December 2021 the collateral manager had released $151.2 million in loan future funding to 17 individual borrowers to aid in property stabilization efforts. An additional $134.6 million of unadvanced loan future funding allocated to 16 individual borrowers remains outstanding.

The transaction is concentrated by property type as 28 loans are secured by multifamily properties, totaling 89.7% of the current trust balance, and three loans are secured by senior housing properties, totaling 10.3% of the current trust balance. The transaction is also concentrated by loan size, as the largest 10 loans represent 50.4% of the pool. No loans are on the servicer’s watchlist or in special servicing as of the February 2022 remittance. In addition, no loans have received a forbearance or have been modified since issuance.

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 the North American CMBS Surveillance Methodology (March 4, 2022), 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.

The DBRS Morningstar Sovereign group releases baseline macroeconomic scenarios for rated sovereigns. DBRS Morningstar analysis considered impacts consistent with the baseline scenarios as set forth in the following report: https://www.dbrsmorningstar.com/research/384482.

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.

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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