Kroll Bond Rating Agency Assigns Preliminary Ratings to COMM 2014-FL5

NEW YORK--()--Kroll Bond Rating Agency, Inc. (KBRA) is pleased to announce the assignment of preliminary ratings to five classes of the COMM 2014-FL5 securitization, a $557.1 million large loan floating rate CMBS transaction (see ratings listed below).

The collateral for the transaction consists of six first-lien mortgage loans, five of which have been bifurcated into a senior pooled component and one or more subordinate non-pooled components totaling $377.9 million and $119.2 million, respectively. Each subordinate non-pooled loan component serves as the sole source of cash flow for a loan-specific class of certificates, none of which are rated by KBRA. In addition, one loan Sava II Portfolio ($60.0 million), will not be pooled and proceeds received with respect to this loan are the sole source of cash flow for the Class “SV” certificates which are not rated by KBRA. As a result, the trust loan counts, balances and percentages herein exclude the non-pooled Sava II Portfolio loan.

The pooled senior loan components consist of K Hospitality Portfolio ($113.9 million), Peachtree Center Portfolio ($117.4 million), Hilton Fort Lauderdale ($58.3 million), Park Central ($50.9 million), and Marriott Fairview Park ($37.5 million). The majority of the pool consists of lodging properties (61.9%) which serve as collateral for three loans, K Hospitality Portfolio ($113.9 million, 20 assets), Hilton Fort Lauderdale ($58.3 million, 1 asset), and Marriott Fairview Park ($37.5 million, 1 asset). Office assets (32.9%) secure the Marriott Fairview Park loan ($37.5 million, 1 asset) and a large component of the Peachtree Center Portfolio loan ($117.4 million, 6 assets). The remaining property type exposures consist of the parking (2.7%, 3 assets) and retail (2.4%, 1 asset) components of the Peachtree Center Portfolio loan. The properties are located in seven states with three individual state exposures that represent more than 10.0% of the pool balance: Texas (32.2%), Georgia (25.3%) and Florida (17.5%).

KBRA’s analysis of the transaction involved a detailed evaluation of the underlying cash flows using our CMBS Property Evaluation Guidelines and the application of our CMBS Single-Borrower & Large Loan Rating Methodology. The results of the analysis yielded a KNCF for the underlying collateral properties that was, on average, 3.4% less than the issuer cash flow for the pooled loan components. KBRA applied our stressed capitalization rates to the KNCF to arrive at valuations of the underlying properties. The KBRA values were, on average, 34.9% less than the appraiser’s as-is valuation for the pooled loan components. The resulting KBRA in-trust loan to value (KLTV) was 68.9% for the pooled loan components and the KLTV was 90.9% for the total in-trust balance, inclusive of the subordinate loan components. Four of the five pooled loans have additional financing in place in the form of mezzanine debt. Inclusive of this additional debt, the weighted average all-in KLTV for the trust assets was 114.9%. As part of our analysis of the transaction, we also reviewed and considered third party engineering and environmental reports, our analysts’ site visits to the collateral properties, and the transaction structure.

For complete details on the analysis, please see our presale report, COMM 2014-FL5 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: COMM 2014-FL5

 
Class         Balance         Expected Rating
A         $210,399,000         AAA(sf)
X-CP(1)         $377,863,000         AAA(sf)
X-EXT(1)         $377,863,000         AAA(sf)
B         $60,706,000         AA-(sf)
C         $31,547,000         A-(sf)
D         $75,211,000         NR
KH1(2)         $32,750,000         NR
KH2(2)         $21,045,200         NR
HFL1(2)         $16,772,000         NR
HFL2(2)         $11,959,000         NR
MFP1(2)         $10,375,000         NR
MFP2(2)         $5,098,000         NR
PC1(2)         $9,197,000         NR
PC2(2)         $3,390,000         NR
PCH(2)         $8,632,000         NR
SV1(3)         $25,622,000         NR
SV-X-CP(3)         $60,000,000         NR
SV-X-EXT(3)         $60,000,000         NR
SV2(3)         $10,018,000         NR
SV3(3)         $10,356,000         NR
SV4(3)         $13,995,000         NR
 
1 Notional amount
2 Represents a loan-specific class of certificates and is only entitled to distributions from the corresponding subordinate non-pooled component of the related mortgage loan.

3 Represents a loan-specific class that is only entitled to proceeds received with respect to the Sava II Portfolio loan.

 

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 here.

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

CMBS: COMM 2014-FL5 Presale Report
CMBS: Single Borrower & Large Loan Rating Methodology, published August 8, 2011
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:
Aleksandra Simanovsky, 646-731-2434
asimanovsky@kbra.com
or
Robin Regan, 646-731-2358
rregan@kbra.com
or
Michael Brown
John Grosso
646-731-2307
mbbrown@kbra.com

Contacts

Kroll Bond Rating Agency
Analytical:
Aleksandra Simanovsky, 646-731-2434
asimanovsky@kbra.com
or
Robin Regan, 646-731-2358
rregan@kbra.com
or
Michael Brown
John Grosso
646-731-2307
mbbrown@kbra.com