KBRA Assigns Preliminary Ratings to GACM 2019-FL1

NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of
preliminary ratings to eight classes of GACM 2019-FL1, a $625.0 million
managed commercial real estate collateralized loan obligation (CRE CLO)
transaction with an 18-month reinvestment period, which includes a
six-month ramp-up period.

The transaction is initially expected to be collateralized by 26 whole
loans (or participations therein), inclusive of a pair of crossed loans,
with an in-trust balance of $473.8 million and $151.2 million of cash
collateral. The cash collateral can be used to acquire one
pre-identified delayed-close loan ($42.5 million), pari passu
participations related to the initial loan collateral, and previously
unidentified whole loans and senior participations, provided such assets
satisfy the reinvestment 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 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,
38.2% and 46.9% lower than the appraisers’ as-is values and stabilized
values, respectively, and a KBRA Loan to Value (KLTV) for the initial
loan pool of 112.6%. 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, GACM
, 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: GACM 2019-FL1

Class       Initial Note Balance       Expected KBRA Rating
A       $320,312,000       AAA (sf)
A-S       $85,938,000       AAA (sf)
B       $42,187,000       AA- (sf)
C       $42,188,000       A- (sf)
D       $31,250,000       BBB (sf)
E       $15,625,000       BBB- (sf)
F       $16,406,000       BB- (sf)
G       $14,844,000       B- (sf)
Preferred Shares       $56,250,000       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.


Analytical Contacts:
McGorty, Director
(646) 731-2393
[email protected]

Brown, Managing Director
(646) 731-2307
[email protected]

Bhasin, Senior Managing Director
(646) 731-2334
[email protected]

Keagle, Senior Director
(646) 731-3357
[email protected]

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