NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency, Inc. (KBRA) is pleased to announce the assignment of preliminary ratings to the BAMLL 2014-INLD transaction (see ratings list below). BAMLL 2014-INLD is a CMBS single borrower transaction that is collateralized by a $615.0 million, floating rate loan that was originated by Bank of America, N.A. (70.0%) and Column Financial, Inc. (30.0%). The loan has an initial two year term with three, one-year extension options. Proceeds from the mortgage loan, along with $202.0 million of mezzanine financing and approximately $279.3 million of new cash equity contributed by the loan sponsor, were used to facilitate the acquisition of a portfolio of 48 hospitality assets.
The loan is secured by the borrowers’ fee simple interests in 46 hospitality properties totaling 6,000 keys and leasehold interest in two hotels totaling 401 keys. The portfolio consists of 29 select-service properties (62.6%) and 19 extended-stay properties (37.4%) located in 31 different MSAs in 21 states. The properties are operated under eight flags including Courtyard by Marriott (16 properties, 33.3%), Residence Inn by Marriott (13 properties, 26.4 %), Hilton Garden Inn (seven properties, 16.4%), Homewood Suites (six properties, 11.0%), aloft (two properties, 4.5%), Hampton Inn & Suites (two properties, 3.9%), Hyatt Place (one property, 3.6%) and SpringHill Suites by Marriott (one property, 1.0%).
The assets were built between 1957 and 2010, and range in size from 79 to 206 keys. All of the properties in the portfolio have been renovated since 2009, and a total of $90.4 million ($14,123 per key) has been spent on capital improvements across the portfolio from 2009 to 2013. Over 91% of the collateral properties by ALA are located in markets considered to be primary or secondary by KBRA. The primary market exposure (28.8%) includes five of the ten largest properties by ALA which equates to 16.4% of the portfolio balance.
KBRA’s analysis of the transaction included a detailed evaluation of the properties’ cash flows using our CMBS Property Evaluation Guidelines, and the application of our CMBS Single Borrower & Large Loan Rating Methodology. For the purposes of our analysis, we determined KBRA net cash flow (KNCF) for each asset and applied KBRA capitalization rates to each property’s KNCF to determine property value. KBRA adjusted this value to give partial credit in the amount of $54.1 million for an upfront capital improvement reserve that was funded at origination. The weighted average variance to the issuer’s NCF was 1.4%, and the weighted average value variance to each property’s third party appraisal values was 28.1%. The analysis produced an aggregate KBRA value of $645.1 million and an in trust KLTV of 95.3%.
For further details on KBRA’s analysis of the transaction, please see our Pre-Sale Report, entitled BAMLL 2014-INLD, which was published today at www.kbra.com.
The preliminary ratings are based on information known to KBRA at the time of this publication. Information received subsequent to this release could result in the assignment of final ratings that differ from the preliminary ratings.
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Preliminary Ratings Assigned: BAMLL 2014-INLD |
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| Class | Expected Rating | Balance (US$) | ||
| A | AAA(sf) | $201,800,888 | ||
| X-CP | AAA(sf) | $492,000,000(1) | ||
| X-EXT | AAA(sf) | $615,000,000(1) | ||
| B | AA-(sf) | $73,600,000 | ||
| C | A-(sf) | $54,700,000 | ||
| D | BBB-(sf) | $78,800,000 | ||
| E | BB-(sf) | $113,900,000 | ||
| F | B-(sf) | $92,200,000 | ||
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(1) Notional balance. |
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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 BAMLL 2014-INLD 17g-7 Disclosure Report.
Related publications:
CMBS
Presale: BAMLL 2014-INLD
CMBS
Property Evaluation Guidelines, published June 10, 2011
CMBS
Single Borrower & Large Loan Rating Methodology, published August 8, 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).
