Kroll Bond Rating Agency Assigns Preliminary Ratings to GSMS 2012-BWTR

NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings for the GSMS 2012-BWTR transaction (see ratings list below). GSMS 2012-BWTR is a $300.0 million CMBS single borrower transaction.

The collateral for the securitization is comprised of a single, non-recourse, first lien mortgage loan that is secured by the borrower’s fee simple interest in 640,210 sf of a 992,561 sf super-regional mall and adjacent lifestyle center. The property, Bridgewater Commons, is located in Bridgewater, New Jersey and features over 150 major and in-line tenants that are predominately leased to national retailers. There are three anchor tenants, including Bloomingdale’s, Lord & Taylor and Macy’s. Lord & Taylor and Macy’s own their improvements and the underlying land.

The mall is indirectly owned by Four State Properties, LLC (“Sponsor”), a joint venture between GGP Limited Partnership, an affiliate of General Growth Properties, Inc. (“GGP”), which owns 35% of the Sponsor, and Fourmall Acquisition, LLC, which owns 65% of the Sponsor. Fourmall Acquisition, LLC is a joint venture between the New York State Teachers’ Retirement System and the Commingled Pension Trust Fund of JPMorgan Chase Bank, National Association, which is managed by JPMorgan Asset Management – Global Real Assets. The Property is managed by General Growth Management, Inc., an affiliate of GGP. The collateral was 97.9% occupied as of September 30, 2012. Comparable in-line sales were $782 per sf for the trailing 12 months ending August 2012, resulting in an occupancy ratio of 14.2%.

KBRA’s analysis of the transaction included a detailed evaluation of the property’s cash flow using our CMBS Property Evaluation Guidelines, and the application of our CMBS Single Borrower and Large Loan Rating Methodology. The results of our analysis yielded a KBRA Net Cash flow (KNCF) of $31.4 million. To value the property, we applied a 7.25% capitalization rate to arrive at a KBRA value of $433.0 million. Our resulting KBRA Loan to Value (KLTV) was 69.3%. In our analysis of the transaction, we also reviewed and considered third party engineering and environmental reports, as well as our own on-site inspection of the property and the competition.

For complete details on the analysis, please see our presale Report, GSMS Trust 2012-BWTR, published today at www.krollbondratings.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 final ratings that differ from the preliminary ratings.

Preliminary Ratings Assigned: GSMS 2012-BWTR
Class	Expected Rating	Balance (US$)
A	AAA (sf)	$217,590,000
X-A*	AAA (sf)	$217,590,000
X-B*	AAA (sf)	$39,410,000
B	AA- (sf)	$39,410,000
C	A- (sf)	$28,700,000
D	BBB (sf)	$14,300,000
* Notional Amount

17g-7 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 entitled CMBS: GSMS Trust 2012-BWTR 17g-7 Disclosure Report.

Related publications (available at www.krollbondratings.com):
CMBS Single Borrower and Large Loan Rating Methodology
CMBS Property Evaluation Guidelines, published June 10, 2011

About Kroll Bond Rating Agency

KBRA was established in 2010 by Jules Kroll to restore trust in credit ratings by creating new standards for assessing risk and by offering accurate, clear and transparent ratings. KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).