NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to seven classes of CGCMT 2019-SMRT, a CMBS single asset, single borrower (SASB) transaction.
The collateral for the transaction is a $644.1 million, non-recourse, first lien mortgage loan secured by the borrower’s interests in 101 self-storage properties. The borrowers have a fee simple interest in all of the properties except for one property that is secured by the borrower’s fee simple and leasehold interest.
The portfolio properties total 7.5 million sf (61,852 units) with assets ranging from 31,222 sf (213 units) to 162,845 sf (1,397 units). In total, 36.5% of the portfolio’s sf is climate-controlled. The properties are located in 24 different MSAs across 17 states, with three state exposures each representing more than 10.0% of the pool balance: Missouri (22.1%), Florida (11.4%) and Illinois (10.6%). The assets were built between 1925 and 2016 and are on average approximately 26 years old. As of September 2018, the portfolio had a weighted average occupancy rate of 88.2%.
KBRA’s analysis of the transaction included a detailed evaluation of the properties’ cash flows using our U.S. CMBS Property Evaluation Methodology and the application of our U.S. CMBS Single Borrower & Large Loan Rating Methodology. The results of our analysis yielded a KBRA net cash flow (KNCF) for the portfolio of $61.4 million. To value the portfolio, KBRA applied a blended capitalization rate of 8.79% to arrive at a KBRA value of $698.7 million. The resulting KBRA Loan to Value (KLTV) is 92.2%. In our analysis of the transaction, we also reviewed and considered third party engineering, environmental, and appraisal reports; the results of our site inspections of the properties; and legal documentation.
For further details on KBRA’s analysis, please see our pre-sale report, CGCMT 2019-SMRT, published at www.kbra.com. To access ratings, reports and disclosures, click here.
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 final ratings that differ from the preliminary ratings.
|
Preliminary Ratings Assigned: CGCMT 2019-SMRT |
||||||
| Class | Initial Class Balance | Expected KBRA Rating | ||||
| A | $359,100,000 | AAA(sf) | ||||
| X | $461,800,0001 | AAA(sf) | ||||
| B | $53,600,000 | AA+(sf) | ||||
| C | $49,100,000 | A+(sf) | ||||
| D | $124,695,000 | BBB-(sf) | ||||
| E | See Footnote (2) | BB+(sf) | ||||
| HRR | See Footnote (3) | BB(sf) | ||||
1Notional balance. 2The exact initial balance of the Class E certificates will not be determined until final pricing. However, the initial certificate balance is expected to fall within the range of $21.148 million to $22.630 million. 3To satisfy the US risk retention rules, a third party purchaser is expected to retain the HRR certificates. The Class HRR certificates are expected to constitute an “eligible horizontal residual interest” for purposes of the US risk retention rules and will have a fair value equal to at least 5.0% of the fair value of all ABS interests issued on the closing date, calculated in accordance with GAAP. The exact initial balance of the Class HRR certificates will not be determined until final pricing. However, the initial certificate balance is expected to fall within the range of $34.975 million to $36.457 million. The aggregate initial certificate balance of the Class E and Class HRR certificates is expected to be approximately $57.605 million.
Representations & Warranties Disclosure
All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC Rule 17g-7, to provide a description of a transaction’s representations, warranties and enforcement mechanisms that are available to investors when issuing credit ratings. KBRA’s disclosure for this transaction can be found in the report available here.
Related Publications: (available at www.kbra.com)
- CGCMT 2019-SMRT Pre-Sale Report
- U.S. CMBS Property Evaluation Methodology
- U.S. CMBS Single Borrower & Large Loan Rating Methodology
- Methodology for Rating Interest-Only Certificates in CMBS Transactions
Connect with KBRA
Twitter
LinkedIn
Download
the iOS App
YouTube
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, is 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.
