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: December 3, 2019
(Date of earliest event reported)
Wells Fargo Commercial Mortgage Trust 2019-C54
(Central Index Key Number 0001791239)
(Exact name of issuing entity)
Argentic Real Estate Finance LLC
(Central Index Key Number 0001624053)
Wells Fargo Bank, National Association
(Central Index Key Number 0000740906)
Rialto Mortgage Finance, LLC
(Central Index Key Number 0001592182)
BSPRT CMBS Finance, LLC
(Central Index Key Number 0001722518)
UBS AG
(Central Index Key Number 0001685185)
(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 | 333-226486-11 | 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.☐
On December 3, 2019, Wells Fargo Commercial Mortgage Securities, Inc. (the “Depositor”) caused the issuance, pursuant to a pooling and servicing agreement, dated as of December 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, 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, of the Wells Fargo Commercial Mortgage Trust 2019-C54, Commercial Mortgage Pass-Through Certificates, Series 2019-C54.
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. An executed version of 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”). An executed version of 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 Intercreditor Agreement (as defined in the Pooling and Servicing Agreement) | Intercreditor Agreement | Non-Serviced Servicing Agreement (if any) |
| The Tower at Burbank | 4.7 | 4.2 |
| Planet Self Storage Portfolio | 4.8 | 4.3 |
| Phoenix Industrial Portfolio II | 4.9 | 4.4 |
| Global Payments, Inc. | 4.10 | N/A |
| NMR Pharmacy Portfolio | 4.11 | N/A |
| Washington Avenue Portfolio | 4.12 | 4.5 |
| CIRE Equity Retail & Industrial Portfolio | 4.13 | 4.6 |
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 $579,400,000, were sold to Wells Fargo Securities, LLC (“WFS”), UBS Securities LLC (“UBS Securities”), Drexel Hamilton, LLC (“Drexel Hamilton”) and Academy Securities, Inc. (“Academy” and, together in such capacity with WFS, UBS Securities and Drexel Hamilton, the “Underwriters”), pursuant to the underwriting agreement, dated as of November 8, 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 December 3, 2019, the Registrant also sold the Class X-D, Class D, Class E-RR, Class F-RR, Class G-RR, Class V and Class R Certificates (collectively, the “Private Certificates”), having an
aggregate initial principal amount of $90,427,471, to WFS, UBS Securities, Drexel Hamilton, and Academy (collectively in such capacity, the “Initial Purchasers”), pursuant to a certificate purchase agreement, dated as of November 8, 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-C54 (the “Issuing Entity”), a common law trust fund formed on December 3, 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 forty-four (44) 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 November 8, 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 November 8, 2019, between the Registrant and RMF, (iii) Argentic Real Estate Finance LLC (“AREF”), pursuant to a Mortgage Loan Purchase Agreement, an executed version attached hereto asExhibit 99.3 and dated as of November 8, 2019, between the Registrant and AREF, (iv) BSPRT CMBS Finance, LLC (“BSPRT”), pursuant to a Mortgage Loan Purchase Agreement, an executed version attached hereto asExhibit 99.4 and dated as of November 8, 2019, between the Registrant, BSPRT and Benefit Street Partners Realty Trust, Inc., and (v) UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (“UBS AG”), pursuant to a Mortgage Loan Purchase Agreement, an executed version attached hereto asExhibit 99.5 and dated as of November 8, between the Registrant and UBS AG.
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.
The Public Certificates and the Mortgage Loans are more particularly described in the Prospectus dated November 12, 2019 and as filed with the Securities and Exchange Commission on December 3, 2019. 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 November 12, 2019.
On December 3, 2019, the Registrant sold all of the Public Certificates, having an aggregate certificate principal amount of $579,400,000. The net proceeds of the offering to the Registrant of the issuance of the Certificates, after deducting expenses payable by the Registrant of $5,943,887, were approximately $621,221,423. Of the expenses paid by the Registrant, approximately $92,500 were paid directly to affiliates of the Registrant, $1,785,941 in the form of fees were paid to the Underwriters, $462,223 were paid to or for the Underwriters and $3,603,223 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.
Argentic Real Estate Finance LLC (the “Retaining Sponsor”), is satisfying its credit risk retention obligations by the purchase on the Closing Date and holding by Argentic Securities Holdings Cayman Limited, acting as a “majority-owned affiliate” under the Risk Retention Rule, of the Class E-RR, Class F-RR, Class G-RR and Class H-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 $34,154,811 (excluding accrued interest), representing approximately 5.03% 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 $33,971,309 (excluding accrued interest), 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 November 4, 2019 and filed with the Securities and Exchange Commission on November 4, 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
| Exhibit No. | Description |
| Exhibit 1.1 | Underwriting Agreement, dated as of November 8, 2019, between Wells Fargo Commercial Mortgage Securities, Inc., as depositor, Wells Fargo Securities, LLC, UBS Securities LLC, Drexel Hamilton, LLC and Academy Securities, Inc., as underwriters, and Wells Fargo Bank, National Association. |
| Exhibit 4.1 | Pooling and Servicing Agreement, dated as of December 1, 2019, among 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. |
| Exhibit 4.2 | Pooling and Servicing Agreement, dated as of September 1, 2019, between Morgan Stanley Capital I 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, 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 2019-BNK20, Commercial Mortgage Pass-Through Certificates, Series 2019-BNK20. |
| Exhibit 4.3 | Pooling and Servicing Agreement, dated as of November 1, 2019, among Wells Fargo Commercial Mortgage Securities, Inc., as depositor, 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, relating to the issuance of the Wells Fargo Commercial Mortgage Trust 2019-C53, Commercial Mortgage Pass-Through Certificates, Series 2019-C53. |
| Exhibit 4.4 | Pooling and Servicing Agreement, dated as of October 1, 2019, by and among UBS Commercial Mortgage Securitization Corp., as depositor, Wells Fargo Bank, National Association, as master servicer, Rialto Capital Advisors, LLC, as special servicer, Wells Fargo Bank, National Association, 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 UBS Commercial Mortgage Trust 2019-C17, Commercial Mortgage Pass-Through Certificates, Series 2019-C17. |
| Exhibit 4.5 | Pooling and Servicing Agreement, dated as of November 1, 2019, by and among GS Mortgage Securities Corporation II, as depositor, Midland Loan Services, a |
| | Division of PNC Bank, National Association, as master servicer, LNR Partners, LLC, as special servicer, Wells Fargo Bank, National Association, as certificate administrator and as trustee, and Park Bridge Lender Services LLC, as operating advisor and as asset representations reviewer, relating to the issuance of the GS Mortgage Securities Trust 2019-GSA1, Commercial Mortgage Pass-Through Certificates, Series 2019-GSA1. |
| Exhibit 4.6 | Pooling and Servicing Agreement, dated as of August 1, 2019, between the Citigroup Commercial Mortgage Securities Inc., as depositor, Midland Loan Services, a Division of PNC Bank, National Association, as master servicer, Midland Loan Services, a Division of PNC Bank, National Association, as a Special Servicer, Pacific Life Insurance Company, solely with respect to the Woodlands Mall Loan Combination, as a Special Servicer, Trimont Real Estate Advisors, LLC, solely with respect to The Centre Loan Combination, as a Special Servicer, Pentalpha Surveillance LLC, as operating advisor and asset representations reviewer, Citibank, N.A., as certificate administrator, and Wilmington Trust, National Association, as trustee, relating to the issuance of the Benchmark 2019-B12 Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2019-B12. |
| Exhibit 4.7 | Agreement Between Note Holders, dated as of September 26, 2019, by and between Wells Fargo, National Association, as Initial Note A-1 Holder, Wells Fargo, National Association, as Initial Note A-2 Holder and Wells Fargo, National Association, as Initial Note A-3 Holder, relating to The Tower at Burbank Mortgage Loan. |
| Exhibit 4.8 | Co-Lender Agreement, dated as of September 26, 2019, between Rialto Mortgage Finance, LLC, as Note A-1 Holder, Rialto Mortgage Finance, LLC, as Note A-2 Holder, Rialto Mortgage Finance, LLC, as Note A-3 Holder, and Rialto Mortgage Finance, LLC, as Note A-4 Holder, relating to the Planet Self Storage Portfolio Whole Loan. |
| Exhibit 4.9 | Agreement Between Note Holders, dated as of October 15, 2019, by and between UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York, as Initial Note A-1 Holder, Initial Note A-2 Holder, Initial Note A-3 Holder, Initial Note A-4 Holder, Initial Note A-5 Holder and Initial Note A-6 Holder, relating to the Phoenix Industrial Portfolio II Whole Loan. |
| Exhibit 4.10 | Co-Lender Agreement, dated as of November 25, 2019, by and between, BSPRT CMBS Finance Sub-Lender I, LLC, as Note A-1 Holder and BSPRT CMBS Finance Sub-Lender I, LLC, as Note A-2 Holder, relating to the Global Payments, Inc. Whole Loan. |
| Exhibit 4.11 | Co-Lender Agreement, dated as of November 26, 2019, by and between, BSPRT CMBS Finance, LLC, as Note A-1 Holder and BSPRT CMBS Finance, LLC, as Note A-2 Holder, relating to the NMR Pharmacy Portfolio Whole Loan. |
| Exhibit 4.12 | Co-Lender Agreement, dated as of October 4, 2019, by and between SPREF WH III LLC, as Initial A-1 Holder and SPREF WH III LLC, as Initial Note A-2 Holder, relating to the Washington Avenue Portfolio Whole Loan. |
| Exhibit 4.13 | Agreement Between Noteholders, dated as of July 11, 2019, by and between Deutsche Bank AG, New York Branch, as Initial Note A-1 Holder, Deutsche Bank AG, New York Branch, as Initial Note A-2 Holder, Deutsche Bank AG, New York Branch, as Initial Note A-3 Holder, UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York, as Initial Note A-4 Holder, UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York, as Initial Note A-5 Holder, and UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York, as Initial Note A-6 Holder, relating to the CIRE Equity Retail & Industrial Portfolio Mortgage Loan. |
| Exhibit 5 | Legality Opinion of Cadwalader, Wickersham & Taft LLP, dated December 3, 2019. |
| Exhibit 8 | Tax Opinion of Cadwalader, Wickersham & Taft LLP, dated December 3, 2019 (included as part of Exhibit 5). |
| Exhibit 23 | Consent of Cadwalader, Wickersham & Taft LLP (included as part of Exhibit 5). |
| Exhibit 36.1 | Depositor’s Certificate for Shelf Offerings of Asset-Backed Securities in respect of that certain Prospectus dated November 12, 2019. |
| Exhibit 99.1 | Mortgage Loan Purchase Agreement, dated as of November 8, 2019, between Wells Fargo Bank, National Association, as seller, and Wells Fargo Commercial Mortgage Securities, Inc., as purchaser. |
| Exhibit 99.2 | Mortgage Loan Purchase Agreement, dated as of November 8, 2019, between Rialto Mortgage Finance, LLC, as seller, and Wells Fargo Commercial Mortgage Securities, Inc., as purchaser. |
| Exhibit 99.3 | Mortgage Loan Purchase Agreement, dated as of November 8, 2019, between Argentic Real Estate Finance LLC, as seller, and Wells Fargo Commercial Mortgage Securities, Inc., as purchaser. |
| Exhibit 99.4 | Mortgage Loan Purchase Agreement, dated as of November 8, 2019, between BSPRT CMBS Finance, LLC, as seller, Benefit Street Partners Realty Trust, Inc. and Wells Fargo Commercial Mortgage Securities, Inc., as purchaser. |
| Exhibit 99.5 | Mortgage Loan Purchase Agreement, dated as of November 8, 2019, between UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York, as seller, and Wells Fargo Commercial Mortgage Securities, Inc., as purchaser. |
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: December 3, 2019 | | WELLS FARGO COMMERCIAL MORTGAGE SECURITIES, INC. |
| | | | (Registrant) |
| | | | |
| | | | |
| | | | By: | /s/ Anthony J. Sfarra |
| | | | | Name: | Anthony J. Sfarra |
| | | | | Title: | President |
