Morningstar DBRS Assigns Provisional Credit Ratings to AXMF Re-REMIC Trust 2025-SBRR1

DBRS, Inc. (Morningstar DBRS) assigned provisional credit ratings to the following classes of Multifamily Mortgage Certificate-Backed Certificates, Series 2025-SBRR1 (the Certificates) to be issued by AXMF Re-REMIC Trust 2025-SBRR1 (the Trust):

-- Class A at (P) A (low) (sf)
-- Class B at (P) BBB (low) (sf)
-- Class C at (P) BB (low) (sf)
-- Class D at (P) B (low) (sf)
-- Class CA at (P) BB (low) (sf)
-- Class CB at (P) BB (low) (sf)
-- Class DA at (P) B (low) (sf)
-- Class DB at (P) B (low) (sf)

All trends are Stable.

This transaction is a resecuritization collateralized by a portion of the beneficial interests in the Class B multifamily mortgage-backed pass-through certificates from 18 underlying small balance multifamily mortgage loan securitizations issued by the Federal Home Loan Mortgage Corporation (Freddie Mac). The principal balances of the underlying Class B certificates total approximately $560.2 million, of which approximately $459.3 million is being contributed to the Trust. Morningstar DBRS' credit ratings on this transaction depend on the performance of the underlying securitizations. The Class B underlying certificates are the most subordinate principal-and-interest classes in the underlying securitizations.

The collateral of the underlying securitizations currently comprises 1,986 loans secured by 1,986 multifamily properties, including 1,847 garden-style multifamily properties, 73 mid-rise/high-rise apartment complexes, 55 unclassified multifamily properties, seven independent senior living properties, and four townhome properties. An additional 292 loans were securitized as part of the underlying securitizations but paid off prior to June 2025. Of the total current pool, 892 loans, comprising 43.9% of the current total principal balance, have 20-year loan terms; 618 loans, comprising 29.0% of the current total principal balance, have 10-year loan terms; 265 loans, comprising 15.4% of the current total principal balance, have approximately five-year loan terms; and 211 loans, comprising 11.6% of the current total principal balance, have seven-year loan terms. Approximately 56.1% of the pool by total current principal balance are fixed-rate loans and approximately 43.9% are hybrid ARM loans. For the hybrid ARM loans, Morningstar DBRS used the greater of the interest rate floor and the stressed rate (the lesser of the various rates by index timing and the contractual capped rate) based on the remaining term when determining the interest rate to calculate a stressed term debt service.

Morningstar DBRS analyzed each underlying securitization to determine the provisional credit ratings, reflecting the long-term probability of loan default within the term and the liquidity at maturity. When the cut-off balances were measured against the Morningstar DBRS net cash flow and their respective constants, the resulting initial Morningstar DBRS weighted-average (WA) debt service coverage ratio (DSCR) of the total current pool was 1.00 times (x). There are 1,714 loans, representing 87.0% of the total initial principal balance of the current pool, that exhibit an initial Morningstar DBRS WA DSCR lower than 1.25x, a threshold indicative of a higher likelihood of midterm default. The WA Morningstar DBRS Issuance Loan-to-Value Ratio (LTV) of the current pool was 66.4% and the total pool is scheduled to amortize to a WA Morningstar DBRS Balloon LTV of 53.6%, based on the A note balances at maturity. There are 966 loans, comprising approximately 49.2% of the total initial principal balance of the current pool, that exhibit a Morningstar DBRS Issuance LTV higher than 67.6%, a threshold generally indicative of above-average default frequency. Additionally, 52 loans, representing approximately 2.3% of the current total principal balance, were delinquent, matured performing, matured non-performing, in foreclosure, or real estate owned as of the May 2025 underlying monthly reports. Morningstar DBRS applied an additional stress to the default rate of these loans to mitigate the risk of near-term default.

The transaction has a pro rata pass-through structure until the occurrence of a waterfall trigger event, which will occur if (1) the aggregate outstanding principal balance of the underlying transactions is less than or equal to 40% of the aggregate outstanding principal balance at closing; (2) the aggregate principal balances of the underlying mortgage loans that are at least 60 days delinquent exceeds 4% of the total aggregate principal balance of the underlying transactions; (3) the cumulative portfolio net loss rate exceeds 1.5%; or (4) eight or more of the underlying transactions are subject to an underlying waterfall trigger event. In addition, the depositor has the option to repurchase any of the underlying Class B certificates that are subject to an underlying waterfall trigger event at a repurchase price equal to the outstanding principal balance of the underlying certificates. The amount of this repurchase price will be applied pro rata to the Certificates regardless of whether a waterfall trigger event is in effect. Morningstar DBRS applied a penalty to the losses for the transaction to account for the pro rata structure.

Morningstar DBRS' credit ratings on the Certificates address the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. The associated financial obligations are the related Principal Distribution Amounts, Interest Distribution Amounts, and Additional Interest Payments for the rated classes.

Morningstar DBRS' credit ratings do not address nonpayment risk associated with contractual payment obligations contemplated in the applicable transaction document(s) that are not financial obligations. For example, Morningstar DBRS' credit ratings do not address nonpayment risk associated with aggregate unreimbursed Applied Realized Loss Amounts, Prepayment Premiums, or Yield Maintenance Charges.

Morningstar DBRS' long-term credit ratings provide opinions on risk of default. Morningstar DBRS considers risk of default to be the risk that an issuer will fail to satisfy the financial obligations in accordance with the terms under which a long-term obligation has been issued. The Morningstar DBRS short-term debt rating scale provides an opinion on the risk that an issuer will not meet its short-term financial obligations in a timely manner.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS   
There were no Environmental/Social/Governance factors that had a significant or relevant effect on the credit analysis.

A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings (May 16, 2025) at https://dbrs.morningstar.com/research/454196.

All credit ratings are subject to surveillance, which could result in credit ratings being upgraded, downgraded, placed under review, confirmed, or discontinued by Morningstar DBRS.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is North American CMBS Multi-Borrower Rating Methodology (April 9, 2025), https://dbrs.morningstar.com/research/451739.

Other methodologies referenced in this transaction are listed at the end of this press release.

With regard to due diligence services, Morningstar DBRS was not provided with the Form ABS Due Diligence-15E (Form-15E), which contains a description of the information that a third party reviewed in conducting the due diligence services and a summary of the findings and conclusions.

The credit rating was initiated at the request of the rated entity.

The rated entity or its related entities did participate in the credit rating process for this credit rating action.

Morningstar DBRS had access to the accounts, management, and other relevant internal documents of the rated entity or its related entities in connection with this credit rating action.

This is a solicited credit rating.

For more information on Morningstar DBRS' policy regarding the solicitation status of credit ratings, please refer to the Credit Ratings Global Policy, which can be found in the Morningstar DBRS Understanding Ratings section of the website: https://dbrs.morningstar.com/understanding-ratings

A provisional credit rating is not a final credit rating with respect to the above-mentioned securities and may change or be different than the final credit rating assigned or may be discontinued. The assignment of final credit ratings on the above-mentioned securities is subject to receipt by Morningstar DBRS of all data and/or information and final documentation that Morningstar DBRS deems necessary to finalize the credit ratings.

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the credit rating process.

DBRS, Inc.
22 West Washington Street
Chicago, IL 60602 USA
Tel. +1 312 332-3429

The credit rating methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.

-- North American Commercial Mortgage Servicer Rankings (August 23, 2024), https://dbrs.morningstar.com/research/438283
-- Morningstar DBRS Commercial Real Estate Property Analysis Criteria (September 19, 2024), https://dbrs.morningstar.com/research/439702
-- Legal Criteria for U.S. Structured Finance (December 3, 2024): https://dbrs.morningstar.com/research/444064
-- Interest Rate Stresses for U.S. Structured Finance Transactions (March 27, 2025), https://dbrs.morningstar.com/research/450750
-- North American CMBS Insight Model v 1.3.0.0, https://dbrs.morningstar.com/research/451739

For more information on this credit or on this industry, visit https://dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.