Kroll Bond Rating Agency Assigns Preliminary Ratings to COMM 2015-CCRE25

NEW YORK--()--Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to 14 classes of the COMM 2015-CCRE25 transaction (see ratings list below). COMM 2015-CCRE25 is a $1.1 billion CMBS conduit transaction collateralized by 84 fixed rate commercial mortgage loans that are secured by 145 properties.

The underlying collateral properties are located in 32 states, with one state representing more than 10.0% of the pool balance: California (12.4%). The pool has exposure to all the major property types, with four that represent more than 10.0% of the pool balance: retail (31.5%), industrial (19.7%), multifamily (19.6%), and lodging (17.4%). The loans have principal balances ranging from $1.3 million to $120.0 million for the largest loan in the pool, Heartland Industrial Portfolio. Heartland Industrial Portfolio is comprised of 22 warehouse/distribution industrial properties that together comprise 6,697,299 sf in seven states, including Indiana (7), Tennessee (5), Kentucky (5), North Carolina (2), Ohio (1), South Carolina (1), and Illinois (1). The top five loans, which also include Courtyard Miami Downtown (2nd largest, 4.6%), Shopko Industrial Portfolio (3rd largest, 4.5%), Pearlridge Center (4th largest, 4.3%), and Sheraton Raleigh (5th largest, 3.4%), represent 27.4% of the initial pool balance, while the top 10 loans represent 40.3%.

KBRA’s analysis of the transaction incorporated our multi-borrower rating process that begins with our analysts' evaluation of underlying collateral properties' financial and operating performance, which determine KBRA’s estimate of sustainable net cash flow (KNCF) and KBRA value using our CMBS Property Evaluation Guidelines. On an aggregate basis, KNCF was 3.8% less than the issuer cash flow. KBRA capitalization rates were applied to each asset’s KNCF to derive values that were, on an aggregate basis, 36.1% less than third party appraisal values. The pool has an in-trust KLTV of 104.7% and an all-in KLTV of 107.8%. The model deploys rent and occupancy stresses, probability of default regressions, and loss given default calculations to determine losses for each collateral loan, which are then used to assign our credit ratings.

For complete details on the analysis, please see our presale report, COMM 2015-CCRE25 published today at www.krollbondratings.com. The report includes our new KBRA Comparative Analytic Tool (KCAT). KCAT is an easy to use, Excel based workbook that provides the following information:

  • KBRA Deal Tape – contains KBRA loan level details for every loan in the pool, and the ability for users to input adjustments to KNCF and KBRA Cap Rates and see the related impact on key deal metrics.
  • KBRA Credit Metrics Comparison Tool – Enables the user to compare the subject transaction to a user-defined transaction comp set. The feature provides many of the fields that are provided in our CMBS Monthly Trend Watch publication.
  • Excel based property cash flow statements for the top 20 loans.

Preliminary Ratings Assigned: COMM 2015-CCRE25

Class           Class Balance (US$)           Expected Rating
A-1           $49,855,000           AAA(sf)
A-2           $15,061,000           AAA(sf)
A-SB           $88,315,000           AAA(sf)
A-3           $225,000,000           AAA(sf)
A-4           $410,926,000           AAA(sf)
X-A           $856,831,0001           AAA(sf)
X-B           $119,788,0001           AAA(sf)
X-C           $57,780,0001           BBB-(sf)
A-M           $67,644,000           AAA(sf)
B           $69,054,000           AA(sf)
C           $50,734,000           A-(sf)
D           $57,780,000           BBB-(sf)
E           $29,594,000           BB-(sf)
F           $22,548,000           B-(sf)
G           $40,869,434           NR

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 CMBS: COMM 2015-CCRE25 Representations & Warranties Disclosure Report.

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

CMBS: COMM 2015-CCRE25 Presale Report

CMBS: U.S. CMBS Multi-Borrower Rating Methodology, published February 23, 2012

CMBS Property Evaluation Guidelines, published June 10, 2011

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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:
Lynn D’Eugenio, 646-731-2487
Director
ldeugenio@kbra.com
or
Joe Kelly, 646-731-2365
jkelly@kbra.com
or
Dayna Volpe, 646-731-2391
dvolpe@kbra.com
or
Erika Hinman, 646-731-2418
Senior Analyst
ehinman@kbra.com

Contacts

Analytical:
Lynn D’Eugenio, 646-731-2487
Director
ldeugenio@kbra.com
or
Joe Kelly, 646-731-2365
jkelly@kbra.com
or
Dayna Volpe, 646-731-2391
dvolpe@kbra.com
or
Erika Hinman, 646-731-2418
Senior Analyst
ehinman@kbra.com