Kroll Bond Rating Agency Assigns Preliminary Ratings to CGCMT 2014-GC25

NEW YORK--()--Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to 17 classes of the CGCMT 2014-GC25 transaction (see ratings list below). CGCMT 2014-GC25 is an $842.0 million CMBS conduit transaction collateralized by 58 fixed rate commercial mortgage loans that are secured by 99 properties.

The underlying collateral properties are located in 25 different states, with two state exposures each representing more than 10.0% of the pool balance: California (19.7%) and Texas (11.2%). The pool has exposure to all the major property types, with three exposures that each represent more than 10.0% of the pool balance: office (35.6%), retail (26.3%) and multifamily (16.2%). The loans have principal balances ranging from $1.6 million to $110.0 million for the largest loan in the pool, Bank of America Plaza (13.1%), a 1.4 million sf Class-A office building in Downtown Los Angeles, California. The top five loans, which also include Multi-State Retail Portfolio (7.4%), Fenley Office Portfolio (7.1%), The Heights at State College (7.0%), and 6010 Bay Parkway (5.8%), represent 40.4% of the initial pool balance, while the top 10 loans represent 59.7%.

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 3.9% 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, 33.7% less than third party appraisal values. The pool has an in-trust KLTV of 104.6% and an all-in KLTV of 106.4%. 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, CGCMT 2014-GC25 published today at www.kbra.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: CGCMT 2014-GC25

Class     Class Balance     Expected Rating
Class A-1     $30,646,000     AAA(sf)
Class A-2     $9,763,000     AAA(sf)
Class A-3     $235,000,000     AAA(sf)
Class A-4     $248,803,000     AAA(sf)
Class A-AB     $65,202,000     AAA(sf)
Class X-A     $634,673,000*     AAA(sf)
Class X-B     $52,626,000*     AAA(sf)
Class X-D     $49,469,000*     BBB-(sf)
Class X-E     $16,840,000*     BB(sf)
Class X-F     $17,893,000*     B+(sf)
Class X-G     $30,524,109*     NR(sf)
Class A-S     $45,259,000     AAA(sf)
Class B     $52,626,000     AA(sf)
Class PEZ     $137,881,000**     A-(sf)
Class C     $39,996,000     A-(sf)
Class D     $49,469,000     BBB-(sf)
Class E     $16,840,000     BB(sf)
Class F     $17,893,000     B+(sf)
Class G     $30,524,109     NR

* Notional balance

** Represents the maximum balance of exchangeable certificates that could be issued in an exchange

       

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: CGCMT 2014-GC25 17g-7 Disclosure Report.

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

CMBS: CGCMT 2014-GC25 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

Kroll Bond Rating Agency
Analytical:
Monika Joshi, 646-731-2360
mjoshi@kbra.com
or
Yee Cent Wong, 646-731-2374
ywong@kbra.com
or
Dayna Volpe, 646-731-2391
dvolpe@kbra.com
or
Ken Kor, 646-731-2339
kkor@kbra.com

Contacts

Kroll Bond Rating Agency
Analytical:
Monika Joshi, 646-731-2360
mjoshi@kbra.com
or
Yee Cent Wong, 646-731-2374
ywong@kbra.com
or
Dayna Volpe, 646-731-2391
dvolpe@kbra.com
or
Ken Kor, 646-731-2339
kkor@kbra.com