NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to the BBCMS Trust 2015-RRI transaction (see ratings list below). BBCMS Trust 2015-RRI is a CMBS single borrower transaction that is collateralized by a $360.0 million floating rate loan that was originated by Barclays Bank PLC. The loan has an initial two-year term with three, one-year extension options. Proceeds from the mortgage loan, along with $90.0 million of mezzanine financing, were used to facilitate the acquisition of a portfolio of 89 hospitality assets.
The loan is secured by the borrower's fee simple interests in 87 lodging properties totaling 10,432 keys as well as the leasehold interests in two hotels totaling 283 keys. The properties consist of a total of 72 economy hotels operating under the Red Roof Inn flag and 17 hotels operating under the Red Roof Plus+ flag. The properties were built between 1975 and 2001 and range in size from 79 to 212 rooms. A total of $83.5 million ($7,796 per key) has been spent on capital improvements across the portfolio since 2011.
The assets are located in 39 different MSAs in 25 states. Over 71% of the collateral properties by ALA are located in markets considered to be primary or secondary by KBRA. The primary market exposure (28.6%) includes six of the ten largest properties by ALA that equate to 17.8% of the portfolio balance. In addition, the portfolio’s three largest MSA concentrations are all primary markets consisting of Washington DC-NoVA-MD (6.7%), San Francisco (5.9%) and Boston (5.3%).
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. The weighted average variance to the issuer’s NCF was 1.9%, and the weighted average value variance to each property’s third party appraisal values was 30.7%. The analysis produced an aggregate KBRA value of $416.0 million and an in- trust KLTV of 86.5%.
For further details on KBRA’s analysis of the transaction, please see our Pre-Sale Report, entitled BBCMS Trust 2015-RRI, which was published today at www.kbra.com.
The preliminary ratings are based on information known to KBRA at the time of this publication. Information received subsequent to this release could result in the assignment of final ratings that differ from the preliminary ratings.
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Preliminary Ratings Assigned: BBCMS Trust 2015-RRI |
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| Class | Expected Rating | Balance (US$) | ||||
| A | AAA(sf) | $117,700,000 | ||||
| B | AA+(sf) | $42,900,000 | ||||
| C | AA-(sf) | $32,000,000 | ||||
| D | A-(sf) | $41,900,000 | ||||
| E | BB+(sf) | $66,700,000 | ||||
| F | B+(sf) | $58,800,000 | ||||
| X-CP | AAA(sf) | $324,000,000(1) | ||||
| X-NCP | AAA(sf) | $360,000,000(1) | ||||
| X-E | BB+(sf) | $66,700,000(1) | ||||
| X-F | B+(sf) | $58,800,000(1) | ||||
| ES(2) | BB+(sf) | $66,700,000 | ||||
| FS(2) | B+(sf) | $58,800,000 | ||||
| X-EXT(1)(2) | BB+(sf) | $66,700,000 | ||||
| X-FXT(1)(2) | B+(sf) | $58,800,000 | ||||
(1) Notional balance calculated as described in the Legal Analysis section of the presale report.
(2) The Class ES and X-EXT certificates will be issued upon an exchange of Class E certificates and the Class FS and X-FXT certificates will be issued upon an exchange of Class F certificates, as described in the Legal Analysis section of the presale report.
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 BBCMS Trust 2015-RRI 17g-7 Disclosure Report.
Related publications:
CMBS
Presale: BBCMS
Trust 2015-RRI
CMBS
Property Evaluation Guidelines, published March 3, 2015
CMBS
Single Borrower & Large Loan Rating Methodology, published March 3, 2015
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).
