UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: November 7, 2019
(Date of earliest event reported)
Wells Fargo Commercial Mortgage Trust 2019-C53
(Central Index Key Number 0001789356)
(Exact name of issuing entity)
Wells Fargo Bank, National Association
(Central Index Key Number 0000740906)
Rialto Mortgage Finance, LLC
(Central Index Key Number 0001592182)
Barclays Capital Real Estate Inc.
(Central Index Key Number 0001549574)
Ladder Capital Finance LLC
(Central Index Key Number 0001541468)
C-III Commercial Mortgage LLC
(Central Index Key Number 0001541214)
(Exact name of sponsor as specified in its charter)
Wells Fargo Commercial Mortgage Securities, Inc.
(Central Index Key Number 0000850779)
(Exact name of registrant as specified in its charter)
North Carolina | 333-226486-09 | 56-1643598 |
(State or other jurisdiction of incorporation) | (Commission File No.) | (IRS Employer Identification No.) |
301 South College Street | ||
Charlotte, North Carolina | 28202 | |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code | (704) 374-6161 |
Not Applicable |
(Former name or former address, if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Item 8.01. Other Events.
On November 7, 2019, Wells Fargo Commercial Mortgage Securities, Inc. (the “Depositor”) caused the issuance, pursuant to a pooling and servicing agreement, dated as of November 1, 2019 and as to which an executed version is attached hereto asExhibit 4.1 (the “Pooling and Servicing Agreement”), among Wells Fargo Commercial Mortgage Securities, Inc., as depositor (the “Registrant”), Wells Fargo Bank, National Association, as master servicer, Midland Loan Services, a Division of PNC Bank, National Association, as special servicer, Wells Fargo Bank, National Association, as certificate administrator, Wilmington Trust, National Association, as trustee, and Park Bridge Lender Services LLC, as operating advisor and as asset representations reviewer, of the Wells Fargo Commercial Mortgage Trust 2019-C53, Commercial Mortgage Pass-Through Certificates, Series 2019-C53.
The Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class X-A, Class X-B, Class A-S, Class B and Class C Certificates (collectively, the “Public Certificates”), having an aggregate initial principal amount of $596,845,000, were sold to Wells Fargo Securities, LLC (“WFS”), Barclays Capital Inc. (“Barclays”), Drexel Hamilton, LLC (“Drexel Hamilton”) and Academy Securities, Inc. (“Academy” and, together in such capacity with WFS, Barclays and Drexel Hamilton, the “Underwriters”), pursuant to the underwriting agreement, dated as of October 22, 2019, between the Registrant, the Underwriters and Wells Fargo Bank, National Association (“WFB”).
In connection with the issuance and sale to the Underwriters of the Public Certificates, a legal opinion was rendered related to the validity of, and certain federal income tax considerations relating to, the Public Certificates, which legal opinion is attached hereto asExhibits 5,8 and23.
On November 7, 2019, the Registrant also sold the Class X-D, Class D, Class E-RR, Class F-RR, Class G-RR, Class H-RR, Class J-RR, Class K-RR, Class L-RR, Class V and Class R Certificates (collectively, the “Private Certificates”), having an aggregate initial principal amount of $105,326,519, to WFS, Barclays, Drexel Hamilton, and Academy (collectively in such capacity, the “Initial Purchasers”), pursuant to a certificate purchase agreement, dated as of October 22, 2019, between the Registrant, the Initial Purchasers and WFB. The Private Certificates were sold in a transaction exempt from registration under the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) of the Act.
The Public Certificates and the Private Certificates represent, in the aggregate, the entire beneficial ownership in Wells Fargo Commercial Mortgage Trust 2019-C53 (the “Issuing Entity”), a common law trust fund formed on November 7, 2019 under the laws of the State of New York pursuant to the Pooling and Servicing Agreement. The assets of the Issuing Entity consist primarily of fifty-eight (58) commercial, multifamily and manufactured housing community mortgage loans (the “Mortgage Loans”). The Mortgage Loans were acquired by the Registrant from (i) WFB, pursuant to a Mortgage Loan Purchase Agreement, an executed version attached hereto asExhibit 99.1 and dated as of October 22, 2019, between the Registrant and WFB, (ii) Rialto Mortgage Finance, LLC (“RMF”), pursuant to a Mortgage Loan Purchase Agreement, an executed version attached hereto asExhibit 99.2 and dated as of October 22, 2019, between the Registrant and RMF, (iii) Barclays Capital Real Estate Inc. (“BCREI”), pursuant to a Mortgage Loan Purchase Agreement, an executed version attached hereto asExhibit 99.3 and dated as of October 22, 2019, between the Registrant, BCREI and Barclays Capital Holdings Inc., (iv) Ladder Capital Finance LLC (“LCF”), pursuant to a Mortgage Loan Purchase Agreement, an executed version attached hereto asExhibit 99.4 and dated as of October 22, 2019, between the Registrant, LCF, Ladder Capital Finance Holdings LLLP, Series REIT of Ladder Capital Finance Holdings LLLP and Series TRS of Ladder Capital Finance Holdings LLLP, and (v) C-III Commercial Mortgage LLC (“C-III”), pursuant to a Mortgage Loan Purchase Agreement, an executed version attached hereto asExhibit 99.5 and dated as of October 22, 2019, between the Registrant, C-III and C-III Capital Partners LLC.
The funds used by the Registrant to pay the purchase price for the Mortgage Loans were derived in part from the proceeds from the sale of Certificates by the Registrant to the Underwriters, pursuant to the Underwriting Agreement and the Initial Purchasers, pursuant to the Certificate Purchase Agreement.
On May 14, 2019, the Registrant sold all of the Public Certificates, having an aggregate certificate principal amount of $596,845,000. The net proceeds of the offering to the Registrant of the issuance of the Certificates, after deducting expenses payable by the Registrant of $5,986,977, were approximately $648,103,053. Of the expenses paid by the Registrant, approximately $122,000 were paid directly to affiliates of the Registrant, $1,516,874 in the form of fees were paid to the Underwriters, $461,889 were paid to or for the Underwriters and $3,886,214 were other expenses. All of the foregoing expense amounts are the Depositor’s reasonable estimates of such expenses. No underwriting discounts and commissions or finder’s fees were paid by the Registrant; the Public Certificates were offered by the Underwriters for sale to the public in negotiated transactions or otherwise at varying prices determined at the time of sale. The related registration statement (file no. 333-226486) was originally declared effective on September 10, 2018.
Wells Fargo Bank, National Association, in its capacity as “retaining sponsor” (in such capacity, the “Retaining Sponsor”), is satisfying its credit risk retention obligation under Regulation RR, 12 C.F.R. Part 43 (the “Risk Retention Rule”) in connection with the securitization of the Mortgage Loans referred to above by the purchase on the Closing Date and holding byKKR CMBS II Aggregator Type 2 L.P., acting as third-party purchaser under the Risk Retention Rule, of the Class E-RR, Class F-RR, Class G-RR, Class H-RR, Class J-RR, Class K-RR and Class L-RR Certificates (the “RR Certificates”).
The RR Certificates constitute an “eligible horizontal residual interest” (as defined in the Risk Retention Rule). The aggregate fair value of the RR Certificates is equal to approximately $36,311,885 (excluding accrued interest), representing approximately 5.07% of the aggregate fair value of all of the Certificates (other than the Class R Certificates). The fair value of the Certificates (other than the Class R Certificates) was determined based on the actual sale prices and finalized tranche sizes of such Certificates.
The fair value of the “eligible horizontal residual interest” (as defined in the Risk Retention Rule) that the Retaining Sponsor is required to retain under the credit risk retention requirements of the Risk Retention Rule is equal to at least $35,802,348, representing approximately 5.00% of the aggregate fair value of all of the Certificates (other than the Class R Certificates), excluding accrued interest.
As of the Closing Date, there are no material differences between (a) the valuation methodology or any of the key inputs and assumptions that were used in calculating the fair value or range of fair values disclosed in the Depositor’s preliminary prospectus dated October 15, 2019 and as filed with the Securities and Exchange Commission on October 15, 2019 under the heading “Credit Risk Retention” prior to the pricing of the Certificates and (b) the methodology or the key inputs and assumptions that were used in calculating the fair value at the time of the Closing Date.
Item 9.01. Financial Statements, Pro Forma Financial Information and Exhibits.
(d) Exhibits
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: November 7, 2019 | WELLS FARGO COMMERCIAL MORTGAGE SECURITIES, INC. | |
(Registrant) | ||
By: | /s/ Anthony J. Sfarra | |
Name: Anthony J. Sfarra | ||
Title: President |