Kroll Bond Rating Agency Assigns Preliminary Ratings to COMM 2014-CCRE17

NEW YORK--()--Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to 17 classes of the COMM 2014-CCRE17 transaction (see ratings list below). COMM 2014-CCRE17 is a $1.2 billion CMBS conduit transaction collateralized by 59 fixed rate commercial mortgage loans that are secured by 86 properties.

The underlying collateral properties are located in 20 different states, with one state exposure representing more than 15.0% of the pool balance: New York (32.1%). There is exposure to all the major property types, with one property type that accounts for over 20.0% of the pool: retail (33.2%). The loans have principal balances ranging from $1.7 million to $140.0 million for the largest loan in the pool: Bronx Terminal Market (11.7%), a 912,333 sf, anchored retail center located in Bronx, New York. The top five loans, which also include, 25 Broadway (10.9%), Cottonwood Mall (8.8%) Hyatt Place Austin Downtown (4.7%), and ARC Marriott Hotel Portfolio (3.8%), represent 40.0% of the initial pool balance, while the top 10 loans represent 54.5%.

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 4.3% less than the issuer cash flow. KBRA capitalization rates were applied to each asset’s KNCF to derive values that were, on an aggregate basis, 34.9% less than third party appraisal values. The pool has an in-trust KLTV of 101.5% and an all-in KLTV of 102.7%. 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 2014-CCRE17 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 2014-CCRE17

Class               Class Balance               Expected Rating
A-1               $49,750,000               AAA(sf)
A-2               $149,000,000               AAA(sf)
A-3               $12,376,000               AAA(sf)
A-4               $220,000,000               AAA(sf)
A-5               $333,736,000               AAA(sf)
A-SB               $69,850,000               AAA(sf)
X-A               $900,296,000               AAA(sf)
X-B               $184,829,000               AAA(sf)
X-C               $44,717,000               BB(sf)
X-D               $62,604,107               NR
A-M               $65,584,000               AAA(sf)
B               $81,980,000               AA-(sf)
PEZ               $199,734,000               A-(sf)
C               $52,170,000               A-(sf)
D               $50,679,000               BBB-(sf)
E               $14,906,000               BBB-(sf)
F               $29,811,000               BB(sf)
G               $20,868,000               B
H               $41,736,107               NR
                           

* 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: COMM 2014-CCRE17 17g-7 Disclosure Report.

Related publications (available at www.krollbondratings.com):

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

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).

Contacts

Analytical:
Matthew Hoysa, 215-882-5846
mhoysa@krollbondratings.com
or
Michael Brown, 646-731-2307
mbrown@krollbondratings.com
or
Dayna Volpe, 646-731-2391
dvolpe@kbra.com
or
Josh Fischler, 646-731-2351
jfischler@kbra.com

Sharing

Contacts

Analytical:
Matthew Hoysa, 215-882-5846
mhoysa@krollbondratings.com
or
Michael Brown, 646-731-2307
mbrown@krollbondratings.com
or
Dayna Volpe, 646-731-2391
dvolpe@kbra.com
or
Josh Fischler, 646-731-2351
jfischler@kbra.com