NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of
preliminary ratings to five classes of ARCREN 2019-FL1, a $650.0 million
managed commercial real estate collateralized loan obligation (CRE CLO)
transaction with a three-year reinvestment period, which includes a
120-day ramp-up period.
The transaction is initially expected to be collateralized by 27 whole
loans and senior participation interests with an aggregate in-trust
balance of $473.8 million, $15.6 million cash to fund future funding
commitments for eight loans that have been contributed into the trust,
$31.0 million cash to acquire one pre-identified delayed closing asset,
and $129.6 million cash to acquire previously unidentified assets.
Following the ramp-up period, during the remainder of the transaction’s
reinvestment period, the issuer can acquire previously unidentified
whole loans and senior participations with principal proceeds from the
mortgage assets, provided such assets satisfy the reinvestment criteria
and eligibility criteria.
This transaction includes an interest coverage (IC) test and a par value
test (also referred to as an overcollateralization (OC) test). If either
test is not satisfied on any determination date, on the following
payment date, interest proceeds remaining after interest is paid to the
Class D notes will be used to pay down the principal balances of the
Class A through D notes in sequential order until the tests are
satisfied. If interest proceeds are insufficient to satisfy the tests or
pay down the applicable classes of notes, available principal proceeds
will be used for such purpose.
KBRA’s analysis of the transaction involved evaluation of property cash
flows and values within initial loan pool using our U.S.
CMBS Property Evaluation Methodology. The results of the
analysis yielded KBRA values that were, on a weighted average basis,
38.4% and 45.3% lower than the appraisers’ as-is values and stabilized
values, respectively, and a KBRA Loan to Value (KLTV) for the initial
loan pool of 123.5%. The results of this analysis were utilized in the
application of our U.S.
CMBS Multi-Borrower Rating Methodology. The analysis also
included quantitative and/or qualitative review of the various
structural features of the transaction, including ramp-up, reinvestment,
and IC & OC tests, as well as a review of the legal documents, the
results of which were incorporated into our ratings assignment process.
For complete details on the analysis, please see our pre-sale report, ARCREN
2019-FL1, published at www.kbra.com.
The preliminary ratings are based on information known to KBRA at the
time of this publication. Information received subsequent to this
release could result in the assignment of ratings that differ from the
preliminary ratings.
Preliminary Ratings Assigned: ARCREN 2019-FL1
| Class | Initial Note Balance | Expected KBRA Rating | |||
| A | $338,000,000 | AAA (sf) | |||
| A-S | $56,875,000 | AAA (sf) | |||
| B | $40,625,000 | AA- (sf) | |||
| C | $44,687,000 | A- (sf) | |||
| D | $52,813,000 | BBB- (sf) | |||
| E | $22,750,000 | NR | |||
| F | $28,437,000 | NR | |||
| G | $17,875,000 | NR | |||
| Preferred Shares | $47,938,000 | NR | |||
To access ratings, reports and disclosures, click here.
Related Publications: (available at www.kbra.com)
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About KBRA and KBRA Europe
KBRA is a full-service credit rating agency registered with the U.S.
Securities and Exchange Commission as an NRSRO. In addition, KBRA is
designated as a designated rating organization by the Ontario Securities
Commission for issuers of asset-backed securities to file a short form
prospectus or shelf prospectus. KBRA is also recognized by the National
Association of Insurance Commissioners as a Credit Rating Provider, and
is a certified Credit Rating Agency (CRA) by the European Securities and
Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is
registered with ESMA as a CRA.
Contacts
Analytical Contacts:
Erika
Hinman, Associate Director
(646) 731-2418
ehinman@kbra.com
Yee
Cent Wong, Senior Managing Director
(646) 731-2374
ywong@kbra.com
Christina
Moy, Director
(646) 731-2327
cmoy@kbra.com
Susannah
Keagle, Senior Director
(646) 731-3357
skeagle@kbra.com
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