NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to the COMM 2013-LC13 transaction (see ratings listed below). COMM 2013-LC13 is a $1.1 billion CMBS conduit transaction collateralized by 57 fixed-rate commercial mortgage loans that are secured by 97 properties.
The collateral properties are located in 27 states, with only two state exposures representing more than 10.0% of the total pool balance: New York (22.4%), and California (12.1%). The pool also only has exposure to two property type concentrations in excess of 20.0%, which are office (27.7%) and retail (23.4%). The loans have principal balances ranging from $2.3 million to $100.8 million for the largest loan in the pool, which is secured by the Spirit Cole Portfolio (9.3%), a 1.4 million sf portfolio of 24 single tenant properties located across 17 states. The remaining top five loans consist of 15 MetroTech Center (7.4%), The Center Building (5.8%), The Galleria – 115 East 57th Street (4.9%), and Plaza Frontenac (4.8%) and in the aggregate represent 32.2% of the initial pool balance, while the top 10 loans represent 48.9%. The majority of the loans (40 loans, 63.3%) were used to refinance existing debt, while the proceeds from 16 loans (35.9%) were used for acquisition of the related properties. The proceeds from one loan (0.9%) were used for recapitalization purposes.
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 using our CMBS Property Evaluation Guidelines. On an aggregate basis, KNCF was 5.9% less than the issuer cash flow. KBRA capitalization rates were applied to each asset’s NCF to derive values that were, on an aggregate basis, 35.2% less than third party appraisal values. The pool has an in-trust KLTV of 94.6% and an all-in KLTV of 97.7%. The model deploys rent and occupancy stresses, probability of default regressions, and loss given default calculations to determine losses for each collateral loan, which are then used to assign our credit ratings.
For complete details on the analysis, please see our Presale Report, COMM 2013-LC13, 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: COMM 2013-LC13
1 Notional balance equal to the aggregate outstanding balance of the Class A-1, A-2, A-3, A-4, A-5, A-SB and A-M certificates.
2 Notional balance equal to the aggregate outstanding balance of the Class B and C certificates.
3 Notional balance equal to the aggregate outstanding balance of the Class E, F, and G certificates.
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: COMM 2013-LC13 17g-7 Disclosure Report.
Related publications (available at www.krollbondratings.com):