Kroll Bond Rating Agency Assigns Preliminary Ratings to COMM 2014-UBS4

NEW YORK--()--Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to 15 classes of the COMM 2014-UBS4 transaction (see ratings list below). COMM 2014-UBS4 is a $1.3 billion CMBS conduit transaction collateralized by 88 fixed rate commercial mortgage loans that are secured by 124 properties.

The underlying collateral properties are located in 31 different states, with three state exposures each representing more than 10.0% of the pool balance: New York (19.3%) Texas (12.7%) and California (10.6%). There is exposure to all of the major property type segments, with four that each account for over 15.0% of the pool: office (31.5%) retail (18.7%) multifamily (18.4%) and hospitality (16.3%). The loans have principal balances ranging from $1.7 million to $128.0 million for the largest loan in the pool, State Farm Portfolio (9.9%), which is comprised of 14 Class-A and B suburban office buildings located in 11 states. The top five loans, which also include 597 Fifth Avenue (8.2%), Refinery Hotel (5.4%), 30 Knightsbridge (4.5%) and HDM Apartment Portfolio (4.0%), represent 32.0% of the initial pool balance, while the top 10 loans represent 47.1%.

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 5.0% 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, 34.7% less than third party appraisal values. The pool has an in-trust KLTV of 102.3% and an all-in KLTV of 110.2%. 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.

 

Final Ratings Assigned: COMM 2014-UBS4

Class     Class Balance     Expected Rating
A-1     $53,395,000     AAA(sf)
A-2     $143,249,000     AAA(sf)
A-3     $21,200,000     AAA(sf)
A-4     $250,000,000     AAA(sf)
A-5     $353,672,000     AAA(sf)
A-SB     $80,295,000     AAA(sf)
X-A     $995,213,000*     AAA(sf)
X-B     $112,726,000*     AAA(sf)
X-C     $22,545,000*     NR
X-D     $74,077,798*     NR
A-M     $93,402,000     AAA(sf)
B     $57,973,000     AA(sf)
PEZ     $206,128,000     A(sf)
C     $54,753,000     A(sf)
D     $83,740,000     BBB-(sf)
E     $22,545,000     BB(sf)
F     $25,766,000     B(sf)
G     $48,311,798     NR
       

* Notional balance

Related publications (available at www.krollbondratings.com):
CMBS: COMM 2014-UBS4 Presale 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 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@kbra.com
or
Joseph Kelly, 646-731-2365
jkelly@kbra.com
or
Ravish Kamath, 646-731-2328
rkamath@kbra.com
or
Ken Kor, 646-731-2339
kkor@kbra.com

Sharing

Contacts

Analytical:
Matthew Hoysa, 215-882-5846
mhoysa@kbra.com
or
Joseph Kelly, 646-731-2365
jkelly@kbra.com
or
Ravish Kamath, 646-731-2328
rkamath@kbra.com
or
Ken Kor, 646-731-2339
kkor@kbra.com