Kroll Bond Rating Agency Releases Research Report: As KBRA’s Value Variances to Appraisals Rise, So Does Credit Enhancement

NEW YORK--()--Kroll Bond Rating Agency (KBRA) released a report summarizing trends in KBRA values to third party appraisals, as well as KLTVs and credit enhancements.

The KBRA value variance to appraisal has trended upward across our rated universe since we began rating conduits in 2Q 2012 as property prices have increased over the same period. The average variance across our rated transactions now stands at 34.8%, and is the highest for lodging assets located in primary markets at 40.7%. The value variance has risen given our consistent approach to property valuation, which is outlined in our CMBS Property Evaluation Guidelines. The piece further highlights the additional stress that is applied in our credit modeling process and recent trends in credit enhancements.

Absent a market dislocation, KBRA does not expect its value variances to appraisals, KLTVs, or credit enhancement levels to deviate much from recent trends. To view the full report, please use the following link, As KBRA’s Value Variances to Appraisals Rise, So Does Credit Enhancement.

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
Pramit Sheth, 646-731-2330
Director
psheth@kbra.com
or
Larry Kay, 646-731-2452
Director
lkay@kbra.com
or
Nitin Bhasin, 646-731-2334
Managing Director
nbhasin@kbra.com
or
Eric Thompson, 646-731-2335
Senior Managing Director
ethompson@kbra.com

Contacts

Kroll Bond Rating Agency
Pramit Sheth, 646-731-2330
Director
psheth@kbra.com
or
Larry Kay, 646-731-2452
Director
lkay@kbra.com
or
Nitin Bhasin, 646-731-2334
Managing Director
nbhasin@kbra.com
or
Eric Thompson, 646-731-2335
Senior Managing Director
ethompson@kbra.com