KBRA Assigns Preliminary Ratings to BSPRT 2019-FL5

NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of
preliminary ratings to nine classes of BSPRT 2019-FL5, a $810.0 million
managed commercial real estate collateralized loan obligation (CRE CLO)
transaction with a 24-month reinvestment period, which includes a
six-month ramp-up period.

The transaction is initially expected to be collateralized by 41 whole
loans (or participations therein) with an in-trust balance of $690.7
million and $159.9 million of cash collateral. The cash collateral can
be used to acquire two pre-identified delayed-close loans ($40.7
million), pari passu participations related to the initial loan
collateral, and previously unidentified whole loans and senior
participations.

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 E notes will be used to pay down the principal balances of the
Class A through E 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,
37.8% and 48.1% lower than the appraisers’ as-is values and stabilized
values, respectively, and a KBRA Loan to Value (KLTV) for the initial
loan pool of 121.4%. The results of this analysis were utilized in the
application of our U.S.
CMBS Multi-Borrower Rating Methodology. KBRA also relied on its Global
Structured Finance Counterparty Methodology for assessing
counterparty risk in this transaction, to the extent deemed applicable.
The analysis 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, BSPRT
2019-FL5, 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.

To access ratings, reports and disclosures, click here.

Related Publications: (available at www.kbra.com)

• BSPRT
  2019-FL5 Pre-Sale Report
• BSPRT
  2019-FL5 KBRA CRE CLO KCAT
• Global
  Structured Finance Counterparty Methodology
• U.S.
  CMBS Multi-Borrower Rating Methodology
• U.S.
  CMBS Property Evaluation 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 Contacts:
Aaron
Reed, Director
(646) 731-2306
areed@kbra.com

Michael Brown, Managing Director
(646) 731-2307
mbbrown@kbra.com

Nitin Bhasin, Senior Managing Director, CFA
(646) 731-2334
nbhasin@kbra.com

Susannah Keagle, Senior Director
(646) 731-3357
skeagle@kbra.com