NEW YORK--()--Kroll Bond Rating Agency (KBRA) assigned its final ratings to fourteen classes of COMM 2013-CCRE6, a $1.49 billion CMBS conduit transaction collateralized by 48 fixed rate commercial mortgage loans that are secured by 80 properties. Concurrently, we have withdrawn our preliminary ratings on the certificates, which were assigned on February 19, 2013 (see our ratings listed below).
The five largest loans of the pool represent 38.1% of the initial pool balance and the top ten represent 65.1%. They include Federal Center Plaza (8.7%), a 725,317 million sf office building located in Washington, D.C., Moffett Towers (8.0%), The Avenues (7.4%), Rochester Hotel Portfolio (7.4%) and 540 West Madison Street (6.7%). The underlying collateral properties are geographically diverse and located across 25 states and the District of Columbia. With the exception of California (25.2%) and the District of Columbia (17.0%), no other geographic concentration exceeds 10.0% of the pool. The pool has exposure to three property types with concentrations in excess of 10%: office (31.7%), hospitality (25.9%), and retail (24.6%).
KBRA’s analysis of the transaction incorporated our multi-borrower rating process that begins with our analysts' evaluation of underlying collateral properties' financial and operating performance, which determine KBRA’s estimate of sustainable net cash flow (KNCF) and KBRA value. The analysis included a detailed evaluation of the underlying collateral properties’ financial and operating performance using our CMBS Property Evaluation Guidelines to determine Kroll Net Cash Flow (KNCF), which on an aggregate basis was 3.3% less than the issuer cash flow. KBRA capitalization rates were applied to each asset’s KNCF to derive individual property values that, on an aggregate basis, were 34.3% less than third party appraisal values. The weighted average KBRA capitalization rate for the transaction was 9.5%. The pool has an in-trust KLTV of 89.4% and an all-in LTV of 95.1%.
KNCF and KBRA capitalization rates were among the key inputs used in our credit modeling process. The model deploys rent and occupancy stresses, probability of default regressions, and loss given default calculations to determine losses for each collateral loan that were used by KBRA to assign our credit ratings for this transaction.
Final Ratings Assigned: COMM 2013-CCRE6
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Related publications (available at www.krollbondratings.com):
Presale Report: COMM 2013-CCRE6
CMBS: COMM 2013-CCRE6 17-g7 Disclosure Report
CMBS: U.S. CMBS Multi-Borrower Rating Methodology, published February 23, 2012
CMBS Property Evaluation Guidelines, published June 10, 2011
About Kroll Bond Rating Agency
Kroll Bond Rating Agency, Inc. (www.krollbondratings.com) is registered with the SEC as a nationally recognized statistical rating organization (NRSRO). Kroll Bond Rating Agency was established in 2010 to restore trust in credit ratings by establishing new standards for assessing risk and by offering accurate, clear, and transparent ratings.