KBRA Releases Monthly CMBS Trend Watch

NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) releases April’s CMBS Trend Watch.

CMBS private label pricing volume fell in April to $3.1 billion from
$7.2 billion in March, bringing the year-to-date issuance total to $19.6
billion. On a year-over-year basis, volume is off 16.5% from 2018. The
forward pipeline indicates that May CMBS volume could increase with the
launch of as many as six conduits and between five and seven
single-borrower deals. In addition, we expect to see two Freddie
K-series transactions and upward of six commercial real estate
collateralized loan obligations.

In April, KBRA published pre-sales for four deals ($3.3 billion),
including two conduits ($1.6 billion), one single borrower ($310.5
million), and one agency transaction ($1.4 billion).

April’s surveillance activity includes a review of 310 rated classes,
consisting of 271 affirmations, 35 upgrades, and four downgrades. The
activity includes 63 classes from eight Velocity Commercial Capital
small balance transactions. KBRA also highlighted 76 KBRA Loans of
Concern as well as 10 KBRA Performance Outlook changes, including seven
to Underperform from Perform, and three to Outperform from Perform.

KBRA also issued other notable releases in April, including the transfer
of One Stamford Forum ($103.8 million principal balance) and 600
Broadway ($120 million) to special servicing. One Stamford Forum is
Purdue Pharma’s company headquarters. Several media reports indicated
that Purdue may be preparing a bankruptcy filing in an attempt to
mitigate its potential liability from numerous lawsuits alleging the
company’s role in the opioid epidemic. 600 Broadway was transferred to
the special servicer when the borrower failed to fund a go dark reserve
for tenants Gilly Hicks and A&F.

April’s three-month rolling average IO Index dropped to 62.1% from 64.1%
in March, after five consecutive monthly increases.

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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:

Giselle Vuong, Senior Analyst
(646) 731-2435

Larry Kay, Senior Director
(646) 731-2452

Eric Thompson, Senior Managing Director
(646) 731-2355

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