KBRA Assigns Preliminary Ratings to BBCMS 2019-C4
NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to 18 classes of BBCMS 2019-C4 (see ratings list below), a $937.3 million CMBS conduit transaction collateralized by 73 commercial mortgage loans secured by 377 properties.
The collateral properties are located in 27 states, with the top three states represented by California (26.1%), New York (11.7%), and Pennsylvania (7.3%). The pool has exposure to all the major property types, with the top three being office (32.4%), lodging (17.9%), and retail (16.7%). The loans have principal balances ranging from $1.7 million to $65.0 million for the largest loan in the pool, Moffett Towers II – Buildings 3 & 4 (6.9%), which is secured by two adjacent Class-A suburban office buildings totaling 701,266 sf located within Silicon Valley in Sunnyvale, California. The five largest loans, which also include 188 Spear Street (6.4%), Vanguard Portfolio (6.1%), ExchangeRight Net Leased Portfolio 28 (4.7%) and Inland Life Storage Portfolio (3.3%), represent 27.5% of the initial pool balance, while the top 10 loans represent 38.9%.
KBRA’s analysis of the transaction incorporated our multi-borrower rating process that begins with our analysts’ evaluation of the underlying collateral properties’ financial and operating performance, which determine KBRA’s estimate of sustainable net cash flow (KNCF) and KBRA value using our U.S. CMBS Property Evaluation Methodology. On an aggregate basis, KNCF was 8.0% less than the issuer cash flow. KBRA capitalization rates were applied to each asset’s KNCF to derive values that were, on an aggregate basis, 38.3% less than third party appraisal values. The pool has an in-trust KLTV of 96.8% and an all-in KLTV of 103.5%. The model deploys rent and occupancy stresses, probability of default regressions, and loss given default calculations to determine losses for each collateral loan that are then used to assign our credit ratings.
For complete details on the analysis, please see our pre-sale report 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.
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Preliminary Ratings Assigned: BBCMS 2019-C4 |
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Class |
Initial Class Balance |
Expected KBRA Rating |
|
A-1 |
$24,699,000 |
AAA (sf) |
|
A-2 |
$22,190,000 |
AAA (sf) |
|
A-3 |
$11,700,000 |
AAA (sf) |
|
A-SB |
$35,614,000 |
AAA (sf) |
|
A-4 |
$100,000,000 – $280,000,0001 |
AAA (sf) |
|
A-5 |
$281,934,000 – $461,934,0001 |
AAA (sf) |
|
A-S |
$100,764,000 |
AAA (sf) |
|
B |
$41,008,000 |
AA- (sf) |
|
C |
$37,494,000 |
A- (sf) |
|
D |
$23,433,000 |
BBB (sf) |
|
E |
$17,576,000 |
BBB- (sf) |
|
F |
$17,575,000 |
BB- (sf) |
|
G |
$9,373,000 |
B- (sf) |
|
H-RR2 |
$33,979,142 |
NR |
|
X-A |
$656,137,000 |
AAA (sf) |
|
X-B |
$179,266,000 |
AAA (sf) |
|
X-D |
$41,009,000 |
BBB- (sf) |
|
X-F |
$17,575,000 |
BB- (sf) |
|
X-G |
$9,373,000 |
B- (sf) |
|
VRR Interest |
See Footnote 4 |
N/A |
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1The exact initial certificate balances will not be determined until final pricing, however, they are expected to fall within the above ranges. 2Represents an “eligible horizontal residual interest” in satisfaction of US risk retention rules. 3Notional balance. 4Represents the “eligible vertical interest” in satisfaction of the US risk retention rules. |
To access ratings, reports and disclosures, click here.
Related Publications: (available at www.kbra.com)
- BBCMS 2019-C4 Pre-Sale Report
- BBCMS 2019-C4 KBRA Conduit KCAT
- U.S. CMBS Multi-Borrower Rating Methodology
- U.S. CMBS Property Evaluation Methodology
- Methodology for Rating Interest-Only Certificates in CMBS Transactions
- Global Structured Finance Counterparty Methodology
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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:
Caitlin Parrella, CFA, Associate
(646) 731-3310
cparrella@kbra.com
James Wang, Senior Director
(646) 731-2450
jwang@kbra.com
Susannah Keagle, Senior Director
(646) 731-3357
skeagle@kbra.com