Kroll Bond Rating Agency Assigns Preliminary Ratings to Great Wolf Trust 2015-WOLF

NEW YORK--()--Kroll Bond Rating Agency, Inc. (KBRA) is pleased to announce the assignment of preliminary ratings to seven classes to be issued in the $715.0 million Great Wolf Trust 2015-WOLF transaction (see ratings list below). Great Wolf Trust 2015-WOLF is a CMBS single borrower transaction that is collateralized by a $715.0 million fixed rate loan that was originated by JPMorgan Chase Bank, National Association and Citigroup Global Markets Realty Corp. The loan has an initial three-year term with four, one year extension options. Proceeds from the mortgage loan, along with $360.0 million of mezzanine financing, were used to facilitate the $1.3 billion acquisition of Great Wolf Resorts, Inc. from funds managed by affiliates of Apollo Global Management, LLC.

The loan collateral includes the fee simple interest in eight wholly owned properties; the minority equity interests in two joint venture entities that each own a resort property; a pledge of the franchise management agreements for two properties owned by third parties; and the license agreement for a third party-owned and managed property. The mortgage loan is also secured by non-real estate collateral including certain franchise assets, equity interests and intellectual property.

The wholly-owned properties consist of a total of eight indoor waterpark resort hotels, which are all operated under the Great Wolf Lodge brand, were constructed between 2003 and 2009, and range in size from 280 to 605 keys. Great Wolf Lodges are indoor waterpark resorts that are considered destination resorts with many on-site amenities for guests including an expansive indoor/outdoor water park, meeting space, numerous food & beverage outlets, an arcade, full-service spa, fitness center, and multiple retail outlets. The waterparks feature hot tubs, interactive water forts, water slides, river tubing, wave pools and swimming pools. Since 2008, approximately $76.2 million ($23,954 per key) has been spent on capital improvements across the eight wholly-owned resorts.

The wholly-owned assets are located in eight different MSAs in eight states. Over 82% of the collateral properties by ALA are located in markets considered to be primary or secondary by KBRA. The primary market exposure (41.7%) includes two of the wholly-owned properties.

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 7.0%, and the weighted average value variance to each property’s third party appraisal values was 42.3%. The analysis produced an aggregate KBRA value of $820.1 million and an in-trust KLTV of 87.2%.

For further details on KBRA’s analysis of the transaction, please see our Pre-Sale Report, entitled Great Wolf Trust 2015-WOLF, 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.

 

Preliminary Ratings Assigned: Great Wolf Trust 2015-WOLF

Class         Expected Rating         Balance (US$)
A         AAA(sf)         $229,600,000
X-CP         AAA(sf)         $572,000,000(1)
X-EXT         AAA(sf)         $715,000,000(1)
B         AA-(sf)         $86,500,000
C         A-(sf)         $64,200,000
D         BBB-(sf)         $85,000,000
E         BB-(sf)         $133,900,000
F         NR         $115,800,000

(1) Notional balance

 

Representations & Warranties 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 Great Wolf Trust 2015-WOLF Representations & Warranties Disclosure.

Related publications:

CMBS Presale Report: Great Wolf Trust 2015-WOLF
CMBS Property Evaluation Guidelines, published March 3, 2015
CMBS Single Borrower and 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).

Contacts

Analytical:
Kroll Bond Rating Agency, Inc.
Laura Wolinsky, 646-731-2379
Associate Director
lwolinsky@kbra.com
or
Ken Kor, 646-731-2339
Senior Analyst
kkor@kbra.com
or
Robin Regan, 646-731-2358
Managing Director
rregan@kbra.com
or
Michael Brown, 646-731-2307
Senior Director
mbbrown@kbra.com
or
Follow us on Twitter!
@KrollBondRating

Contacts

Analytical:
Kroll Bond Rating Agency, Inc.
Laura Wolinsky, 646-731-2379
Associate Director
lwolinsky@kbra.com
or
Ken Kor, 646-731-2339
Senior Analyst
kkor@kbra.com
or
Robin Regan, 646-731-2358
Managing Director
rregan@kbra.com
or
Michael Brown, 646-731-2307
Senior Director
mbbrown@kbra.com
or
Follow us on Twitter!
@KrollBondRating