Fitch Ratings has upgraded three classes and affirmed four classes of MSJP Commercial Mortgage Securities Trust 2015-HAUL (MSJP 2015-HAUL).

RATING ACTIONS

Entity / Debt

Rating

Prior

MSJP 2015-HAUL

A 553697AA1

LT

AAAsf

Affirmed

AAAsf

B 553697AG8

LT

AAAsf

Affirmed

AAAsf

C 553697AJ2

LT

AAAsf

Upgrade

AAsf

D 553697AL7

LT

Asf

Upgrade

BBB-sf

E 553697AN3

LT

BBBsf

Upgrade

BBsf

X-A 553697AC7

LT

AAAsf

Affirmed

AAAsf

X-B 553697AE3

LT

AAAsf

Affirmed

AAAsf

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VIEW ADDITIONAL RATING DETAILS

KEY RATING DRIVERS

Generally Stable Collateral Performance: The class upgrades and Positive Rating Outlooks maintained on Classes D and E are the result of stable-to-improved occupancy and gross potential rent since the last rating action, as well as the continued amortization of the total debt (non-pooled loan) as expected since issuance. The non-pooled loan has paid down 64.3% since issuance and 23% since Fitch's last rating action. The portfolio's occupancy has increased from 77.5% in 2010 to 93.4% as of YE 2021, 88.1% in YE 2020 and 84.1% as of YE 2019.

The master servicer's reported net cash flow (NCF) includes income and related expenses from U-Haul's moving businesses, which Fitch excluded from its issuance NCF as it is not part of the securitized collateral. Additionally, certain operating expense items, such as payroll and benefits, property insurance, utilities and administrative expenses have increased since issuance; some of these may include expenses from non-collateral items.

Fitch has inquired about these increases from the servicer. The YE 2021 Fitch-stressed NCF is 7.5% above the Fitch YE 2020 NCF and 11.5% below the Fitch issuance NCF, largely due to the increased operating expenses. Fitch's analysis is based on certain expense line-item assumptions, using both issuance levels, which were normalized for collateral expense items only, as well as some of the reported increases.

Fully Amortizing Loan and Fitch Leverage: The whole loan is structured with a 20-year amortization schedule providing full amortization over the term of the loan. The trust notes are scheduled to be interest-only for the first 10 years and the non-trust $100 million component will fully amortize to zero in the first 10 years. The whole loan has a Fitch-stressed debt service coverage ratio and loan-to-value of 1.54x and 60.2%, respectively, compared to 1.24x and 77.2% at issuance, inclusive of an amortization factor of 75%. The loan is scheduled to mature in September 2035.

Collateral: The certificates represent the beneficial interest in a 20-year, fixed-rate, mortgage loan secured by 105 cross-collateralized self-storage properties located across 35 states owned by AMERCO (NASDAQ: UHAL). All of the properties are owned fee simple. The average year built of the portfolio is 1967. The majority of the properties offer the following amenities: an electronic gate, outdoor drive-up storage, climate-controlled storage, trucks available for move-ins, RV parking, moving supplies for sale, towing equipment and propane refill stations.

Granular Portfolio: The loan is secured by 105 cross-collateralized self-storage properties located across 35 states. No single property represents more than 3.7% of YE 2021 NOI.

Experienced Sponsorship and Management: The loan is sponsored by AMERCO, the parent company of U-Haul, which is the nation's leading do-it-yourself moving company with a network of over 17,400 locations across North America. Founded by L.S. Shoen in 1945 as U-Haul Trailer Rental Company, the industry giant has one of the largest rental fleets in the world, with over 135,000 trucks, 107,000 trailers, and 38,000 towing devices.

The portfolio is managed by U-Haul through management agreements with U-Haul subsidiaries in each of the states where the portfolio properties are located. U-Haul owns and operates approximately 1,280 self-storage locations in the U.S. totaling roughly 491,000 units and 44.2 million sf of space.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to negative rating action/downgrade:

A significant decline in portfolio occupancy;

A significant deterioration in property cash flow.

Fitch has identified both a baseline and a worse-than-expected, adverse stagflation scenario based on fallout from the Russia-Ukraine war whereby growth is sharply lower amid higher inflation and interest rates; even if the adverse scenario should play out, Fitch expects virtually no impact on ratings performance, indicating very few rating or Outlook changes. However, for some transactions with concentrations in underperforming retail exposure, the ratings impact may be mild to modest, indicating some changes on sub-investment-grade notes.

Factors that could, individually or collectively, lead to positive rating action/upgrade:

Fitch rates classes A, B, C, X-A and X-B 'AAAsf', and therefore upgrades are not possible. The Positive Outlooks maintained on classes D and E reflect likely upgrades in one to two years with sustained stable cash flow and continued amortization. The Stable Outlooks for all other classes reflect the relatively stable performance that is consistent with issuance and reduction in the loan balance due to scheduled amortization. If performance remains stable, classes are likely to continue to be upgraded as amortization results in increased credit enhancement.

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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