UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): July 17, 2018
Central Index Key Number of the issuing entity: 0001741690
Wells Fargo Commercial Mortgage Trust 2018-C45
(Exact name of Issuing Entity)
Central Index Key Number of the depositor: 0000850779
Wells Fargo Commercial Mortgage Securities, Inc.
(Exact Name of Registrant as Specified in its Charter)
Central Index Key Number of the sponsor: 0000740906
Wells Fargo Bank, National Association
Central Index Key Number of the sponsor: 0000312070
Barclays Bank PLC
Central Index Key Number of the sponsor: 0001592182
Rialto Mortgage Finance, LLC
Central Index Key Number of the sponsor: 0001541214
C-III Commercial Mortgage LLC
(Exact Names of the Sponsors as Specified in their Charters)
| North Carolina | 333-206677-25 | 56-1643598 |
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. 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 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))
Item 8.01. Other Events.
On July 17, 2018, Wells Fargo Commercial Mortgage Securities, Inc. (the “Registrant”) caused the issuance of the Wells Fargo Commercial Mortgage Trust 2018-C45, Commercial Mortgage Pass-Through Certificates, Series 2018-C45 (the “Certificates”), pursuant to a Pooling and Servicing Agreement, attached hereto asExhibit 4.1 and dated as of July 1, 2018 (the “Pooling and Servicing Agreement”), between the Registrant, as depositor, Wells Fargo Bank, National Association, as master servicer, LNR Partners, LLC, 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. Capitalized terms used but not defined herein shall have the meanings assigned to them in the Pooling and Servicing Agreement.
The Certificates consist of the following classes (each, a “Class”), designated as (i) 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 “Publicly Offered Certificates”), and (ii) the Class X-D, Class D, Class E-RR, Class F-RR, Class G-RR, Class H-RR, Class J-RR, Class V and Class R Certificates (collectively, the “Privately Offered Certificates”).
The Certificates represent, in the aggregate, the entire beneficial ownership in the Issuing Entity, a common law trust to be formed on or about July 17, 2018 under the laws of the State of New York pursuant to the Pooling and Servicing Agreement. The Issuing Entity’s primary assets will be a pool of forty-nine (49) commercial, multifamily and manufactured housing community mortgage loans (the “Mortgage Loans”). Certain of the Mortgage Loans were acquired by the Registrant from Wells Fargo Bank, National Association (“Wells Fargo”) pursuant to a Mortgage Loan Purchase Agreement, attached hereto asExhibit 99.1 and dated as of June 28, 2018, between the Registrant and Wells Fargo; certain of the Mortgage Loans were acquired by the Registrant from Barclays Bank PLC (“Barclays”) pursuant to a Mortgage Loan Purchase Agreement, attached hereto asExhibit 99.2 and dated as of June 28, 2018, between the Registrant and Barclays; certain of the Mortgage Loans were acquired by the Registrant from Rialto Mortgage Finance, LLC (“Rialto”) pursuant to a Mortgage Loan Purchase Agreement, attached hereto asExhibit 99.3 and dated as of June 28, 2018, between the Registrant and Rialto; and certain of the Mortgage Loans were acquired by the Registrant from C-III Commercial Mortgage LLC (“C-III”) pursuant to a Mortgage Loan Purchase Agreement, attached hereto asExhibit 99.4 and dated as of June 28, 2018, between the Registrant and C-III.
The assets of the Issuing Entity include several Mortgage Loans each of which is a part of a Whole Loan. Each Whole Loan is governed by a co-lender, intercreditor or similar agreement (each, an “Intercreditor Agreement”) between the holders of the promissory notes comprising such Whole Loan, the terms of which are described under “Description of the Mortgage Pool—The Whole Loans” in the Prospectus described below. Each Intercreditor Agreement is attached as an exhibit hereto as described in the following table. Moreover, certain of such Whole Loans will not be serviced pursuant to the Pooling and Servicing Agreement but will instead be serviced pursuant to a different servicing agreement (each, a “Non-Serviced PSA”). Each such Non-Serviced PSA is attached as an exhibit hereto as described in the following table. For a description of the servicing of the affected Whole Loans under such Non-Serviced PSAs, see “Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans” in the Prospectus described below.
| Name of Mortgage Loan/Whole Loan | Intercreditor
Agreement | Non-Serviced PSA (if any) |
| Village at Leesburg | Exhibit 99.9 | Exhibit 99.5 |
| 181 Fremont Street | Exhibit 99.10 | Exhibit 99.6 |
| CoolSprings Galleria | Exhibit 99.11 | Exhibit 99.7 |
| Flats at East Bank | Exhibit 99.12 | Exhibit 99.8 |
The funds used by the Registrant to pay the purchase price for the Mortgage Loans were derived from the proceeds of (i) the sale of the Publicly Offered Certificates by the Registrant to Wells Fargo Securities, LLC, Barclays Capital Inc. and Academy Securities, Inc. (collectively, the “Dealers”), pursuant to an Underwriting Agreement, attached hereto asExhibit 1.1 and dated as of June 28, 2018, between the Registrant, the Dealers, as underwriters, and Wells Fargo, and (ii) the sale of the Privately Offered Certificates by the Registrant to the Dealers, pursuant to a Certificate Purchase Agreement, dated as of June 28, 2018, between the Registrant, the Dealers, as initial purchasers, and Wells Fargo. Only the Publicly Offered Certificates were offered to the public. The Privately Offered Certificates were sold and transferred, as applicable, in transactions exempt from registration under the Securities Act of 1933, as amended.
Wells Fargo Bank, National Association (the “Retaining Sponsor”) is satisfying its credit risk retention obligations by the purchase on the Closing Date and holding by Prime Finance Long Duration (B-Piece) II Holdco I, L.P., acting as a third-party purchaser under the Credit Risk Retention Rules, of the Class E-RR, Class F-RR, Class G-RR, Class H-RR and Class J-RR Certificates (the “RR Certificates”).
The RR Certificates constitute an “eligible horizontal residual interest” (as defined in the Credit Risk Retention Rules). The aggregate fair value of the RR Certificates is equal to approximately $33,819,025 (excluding accrued interest), representing approximately 5.035% 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 RR Certificates was determined by multiplying (i) the weighted average of the actual sales prices of the RR Certificates, by (ii) $66,112,419, which is the initial balance of the RR Certificates.
The fair value of the “eligible horizontal residual interest” (as defined in the Credit Risk Retention Rules) that the Retaining Sponsor is required to retain under the credit risk retention requirements of the Credit Risk Retention Rules is equal to approximately $33,585,563 (excluding accrued interest), representing 5.00% of the aggregate fair value of all of the Certificates (other than the Class R Certificates).
If the Retaining Sponsor had relied on retaining an “eligible horizontal residual interest” in order to meet the credit risk retention requirements of the Credit Risk Retention Rules with respect to this securitization transaction, it would have retained an eligible horizontal residual interest with an aggregate fair value dollar amount of approximately $33,585,563, representing 5.00% of the aggregate fair value, as of the Closing Date, of all of the Certificates (other than the Class R Certificates).
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 Prospectus, dated June 28, 2018, 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.
The Publicly Offered Certificates and the Mortgage Loans are more particularly described in the Prospectus, dated June 28, 2018 and filed with the Securities and Exchange Commission July 17, 2018. In connection with such Prospectus, the Chief Executive Officer of the Registrant has provided the certification attached hereto asExhibit 36.1 and dated as of the date of the Prospectus.
The Registrant sold all of the Publicly Offered Certificates, having an aggregate certificate balance of $571,479,000, on July 17, 2018. The net proceeds of the offering to the Registrant of the issuance of the Publicly Offered Certificates, after deducting expenses payable by the Registrant of $5,309,458, were approximately $612,154,847. Of the expenses paid by the Registrant, approximately $98,700 were paid directly to affiliates of the Registrant, $983,210 in the form of fees were paid to the Underwriters, $441,738 were paid to or for the Underwriters and $3,785,810 were other expenses. All of the foregoing expense amounts are the Registrant’s reasonable estimates of such expenses. No underwriting discounts and commissions or finder’s fees were paid by the Registrant; the Publicly Offered 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 Registrant also sold to the Initial Purchasers on such date the Privately Offered Certificates, having an aggregate certificate balance of $87,286,419, in private placement transactions exempt from registration under the Securities Act of 1933, as amended, pursuant to Section 4(2) of the Act. Further information regarding such sales (including, as to the price per class of Publicly Offered Certificates) is available in the Underwriting Agreement attached asExhibit 1.1 hereto and in the Prospectus referred to above. The related registration statement (file no. 333-206677) was originally declared effective on November 23, 2015.
In connection with the issuance and sale to the Underwriters of the Publicly Offered Certificates, a legal opinion was rendered related to the validity of, and certain federal income tax considerations relating to, the Publicly Offered Certificates, which legal opinion is attached hereto asExhibits 5.1,8.1 and23.1.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits:
| 1.1 | Underwriting Agreement, dated as of June 28, 2018, between Wells Fargo Commercial Mortgage Securities, Inc., Wells Fargo Bank, National Association, Wells Fargo Securities, LLC, Barclays Capital Inc. and Academy Securities, Inc. |
| 4.1 | Pooling and Servicing Agreement, dated as of July 1, 2018, between Wells Fargo Commercial Mortgage Securities, Inc., as depositor, Wells Fargo Bank, National Association, as master servicer, LNR Partners, LLC, 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. |
| 99.5 | Pooling and Servicing Agreement, dated as of May 1, 2018, between Wells Fargo Commercial Mortgage Securities, Inc., as depositor, Wells Fargo Bank, National Association, as master servicer, Rialto Capital Advisors, LLC, as special servicer, Pentalpha Surveillance LLC, as operating advisor and as asset representations reviewer, Wells Fargo Bank, National Association, as certificate administrator, and Wilmington Trust, National Association, as trustee, relating to the issuance of the Wells Fargo Commercial Mortgage Trust 2018-C44, Commercial Mortgage Pass-Through Certificates, Series 2018-C44. |
| 99.6 | Pooling and Servicing Agreement, dated as of July 1, 2018, between Deutsche Mortgage & Asset Receiving Corporation, as depositor, Wells Fargo Bank, National Association, as master servicer, CWCapital Asset Management LLC, as special servicer, Wells Fargo Bank, National Association, as certificate administrator, paying agent and custodian, Wilmington Trust, National Association, as trustee, and Park Bridge Lender Services LLC, as operating advisor and as asset representations reviewer, relating to the issuance of the Benchmark 2018-B4 Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2018-B4. |
| 99.7 | Pooling and Servicing Agreement, dated as of May 1, 2018, between Banc of America Merrill Lynch Commercial Mortgage Inc., as depositor, Wells Fargo Bank, National Association, as general master servicer, Midland Loan Services, a Division of PNC Bank, National Association, as general special servicer, National Cooperative Bank, N.A., as NCB master servicer and as NCB special servicer, AEGON USA Realty Advisors, LLC, as Fair Oaks Mall 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, relating to the issuance of the BANK 2018-BNK12, Commercial Mortgage Pass-Through Certificates, Series 2018-BNK12. |
| 99.8 | Pooling and Servicing Agreement, dated as of June 1, 2018, between Citigroup Commercial Mortgage Securities Inc., as depositor, Midland Loan Services, a Division of PNC Bank, National Association, as master servicer, KeyBank National Association, as special servicer, Citibank N.A., as certificate administrator, Wilmington Trust, National Association, as trustee, and Pentalpha Surveillance LLC, as operating advisor and as asset representations reviewer, relating to the issuance of the Citigroup Commercial Mortgage Trust 2018-C5, Commercial Mortgage Pass-Through Certificates, Series 2018-C5. |
| 99.10 | Co-lender Agreement, dated as of May 7, 2018, between Deutsche Bank AG, New York Branch, as Note A-1 Holder, Wells Fargo Bank, National Association, as Note A-2 Holder, Wells Fargo Bank, National Association, as Note A-3 Holder, Deutsche Bank AG, New York Branch, as Note A-4 Holder, Deutsche Bank AG, New York Branch, as Note A-5 Holder, Barclays Bank PLC, as Note A-6-1 Holder and Barclays Bank PLC, as Note A-6-2 Holder, relating to the 181 Fremont Street Whole Loan. |
| 99.11 | Amended and Restated Agreement Between Note Holders, dated as of July 17, 2018, by and between Wilmington Trust, National Association, as trustee for the benefit of the registered holders of BANK 2018-BNK12, Commercial Mortgage Pass-Through Certificates, Series 2018-BNK12, as Note A-1 Holder, Wilmington Trust, National Association, as trustee for the benefit of the registered holders of BANK 2018-BNK12, Commercial Mortgage Pass-Through Certificates, Series 2018-BNK12, as Note A-2 Holder, Wells Fargo Bank, National Association, as Initial Note A-3 Holder, Wells Fargo Bank, National Association, as Initial Note A-4-1 Holder and Wells Fargo Bank, National Association, as Initial Note A-4-2 Holder, relating to the CoolSprings Galleria Whole Loan. |
| 99.12 | Agreement Between Note Holders, dated as of May 9, 2018, by and among Rialto Mortgage Finance, LLC, as Note A-1 Holder, Rialto Mortgage Finance, LLC, as Note A-2 Holder and ACREFI Mortgage Lending, LLC, as Note B Holder, relating to the Flats at East Bank Whole Loan. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| |
| | WELLS FARGO COMMERCIAL MORTGAGE SECURITIES, INC. |
| | | | |
| | By: | /s/ Anthony J. Sfarra |
| | Name: | Anthony J. Sfarra |
| | Title: | President |
| | | | |
| | | | | |
Dated: July 17, 2018
Exhibit Index
| 1.1 | Underwriting Agreement, dated as of June 28, 2018, between Wells Fargo Commercial Mortgage Securities, Inc., Wells Fargo Bank, National Association, Wells Fargo Securities, LLC, Barclays Capital Inc. and Academy Securities, Inc. |
| 4.1 | Pooling and Servicing Agreement, dated as of July 1, 2018, between Wells Fargo Commercial Mortgage Securities, Inc., as depositor, Wells Fargo Bank, National Association, as master servicer, LNR Partners, LLC, 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. |
| 5.1 | Legality Opinion of Sidley Austin LLP, dated July 17, 2018. |
| 8.1 | Tax and Validity Opinion of Sidley Austin LLP, dated July 17, 2018 (included as part of Exhibit 5.1). |
| 23.1 | Consent of Sidley Austin LLP (included as part of Exhibit 5.1). |
| 36.1 | Depositor’s Certification for Shelf Offerings of Asset-Backed Securities in respect of that certain Prospectus dated June 28, 2018. |
| 99.1 | Mortgage Loan Purchase Agreement, dated as of June 28, 2018, between Wells Fargo Commercial Mortgage Securities, Inc. and Wells Fargo Bank, National Association. |
| 99.2 | Mortgage Loan Purchase Agreement, dated as of June 28, 2018, between Wells Fargo Commercial Mortgage Securities, Inc. and Barclays Bank PLC. |
| 99.3 | Mortgage Loan Purchase Agreement, dated as of June 28, 2018, between Wells Fargo Commercial Mortgage Securities, Inc. and Rialto Mortgage Finance, LLC. |
| 99.4 | Mortgage Loan Purchase Agreement, dated as of June 28, 2018, between Wells Fargo Commercial Mortgage Securities, Inc. and C-III Commercial Mortgage LLC. |
| 99.5 | Pooling and Servicing Agreement, dated as of May 1, 2018, between Wells Fargo Commercial Mortgage Securities, Inc., as depositor, Wells Fargo Bank, National Association, as master servicer, Rialto Capital Advisors, LLC, as special servicer, Pentalpha Surveillance LLC, as operating advisor and as asset representations reviewer, Wells Fargo Bank, National Association, as certificate administrator, and Wilmington Trust, National Association, as trustee, relating to the issuance of the Wells Fargo Commercial Mortgage Trust 2018-C44, Commercial Mortgage Pass-Through Certificates, Series 2018-C44. |
| 99.6 | Pooling and Servicing Agreement, dated as of July 1, 2018, between Deutsche Mortgage & Asset Receiving Corporation, as depositor, Wells Fargo Bank, National Association, as master servicer, CWCapital Asset Management LLC, as special servicer, Wells Fargo Bank, National Association, as certificate administrator, paying agent and custodian, Wilmington Trust, National Association, as trustee, and Park Bridge Lender Services LLC, as operating advisor and as asset representations reviewer, relating to the issuance of the Benchmark 2018-B4 Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2018-B4. |
| 99.7 | Pooling and Servicing Agreement, dated as of May 1, 2018, between Banc of America Merrill Lynch Commercial Mortgage Inc., as depositor, Wells Fargo Bank, National Association, as general master servicer, Midland Loan Services, a Division of PNC Bank, National Association, as general special servicer, National Cooperative Bank, N.A., as NCB master servicer and as NCB special servicer, AEGON USA Realty Advisors, LLC, as Fair Oaks Mall 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, relating to the issuance of the BANK 2018-BNK12, Commercial Mortgage Pass-Through Certificates, Series 2018-BNK12. |
| 99.8 | Pooling and Servicing Agreement, dated as of June 1, 2018, between Citigroup Commercial Mortgage Securities Inc., as depositor, Midland Loan Services, a Division of PNC Bank, National Association, as master servicer, KeyBank National Association, as special servicer, Citibank N.A., as certificate administrator, Wilmington Trust, National Association, as trustee, and Pentalpha Surveillance LLC, as operating advisor and as asset representations reviewer, relating to the issuance of the Citigroup Commercial Mortgage Trust 2018-C5, Commercial Mortgage Pass-Through Certificates, Series 2018-C5. |
| 99.9 | Agreement Between Note Holders, dated as of May 17, 2018, by and between Wells Fargo Bank, National Association, as Initial Note A-1 Holder and Wells Fargo Bank, National Association, as Initial Note A-2 Holder, relating to the Village at Leesburg Whole Loan. |
| 99.10 | Co-lender Agreement, dated as of May 7, 2018, between Deutsche Bank AG, New York Branch, as Note A-1 Holder, Wells Fargo Bank, National Association, as Note A-2 Holder, Wells Fargo Bank, National Association, as Note A-3 Holder, Deutsche Bank AG, New York Branch, as Note A-4 Holder, Deutsche Bank AG, New York Branch, as Note A-5 Holder, Barclays Bank PLC, as Note A-6-1 Holder and Barclays Bank PLC, as Note A-6-2 Holder, relating to the 181 Fremont Street Whole Loan. |
| 99.11 | Amended and Restated Agreement Between Note Holders, dated as of July 17, 2018, by and between Wilmington Trust, National Association, as trustee for the benefit of the registered holders of BANK 2018-BNK12, Commercial Mortgage Pass-Through Certificates, Series 2018-BNK12, as Note A-1 Holder, Wilmington Trust, National Association, as trustee for the benefit of the registered holders of BANK 2018-BNK12, Commercial Mortgage Pass-Through Certificates, Series 2018-BNK12, as Note A-2 Holder, Wells Fargo Bank, National Association, as Initial Note A-3 Holder, Wells Fargo Bank, National Association, as Initial Note A-4-1 Holder and Wells Fargo Bank, National Association, as Initial Note A-4-2 Holder, relating to the CoolSprings Galleria Whole Loan. |
| 99.12 | Agreement Between Note Holders, dated as of May 9, 2018, by and among Rialto Mortgage Finance, LLC, as Note A-1 Holder, Rialto Mortgage Finance, LLC, as Note A-2 Holder and ACREFI Mortgage Lending, LLC, as Note B Holder, relating to the Flats at East Bank Whole Loan. |
