Kroll Bond Rating Agency Assigns Preliminary Ratings to UBS 2017-C1

NEW YORK--()--Kroll Bond Rating Agency, Inc. (KBRA) is pleased to announce the assignment of preliminary ratings to 15 classes of the UBS 2017-C1 transaction. UBS 2017-C1 is a $959.0 million CMBS conduit transaction collateralized by 67 commercial mortgage loans secured by 134 properties.

The properties in the collateral pool are located in 27 states, with only California (28.5%) representing more than 10.0% of the pool balance. The pool has exposure to all of the major property types, with three that represent more than 15.0% of the pool balance: retail (28.1%), office (20.0%), and lodging (17.2%). The loans have principal balances ranging from $1.6 million to $50.0 million for the largest loan in the pool, Save Mart Portfolio (5.2%), which is comprised of 33 single-tenant properties in Northern and Central California. The five largest loans, which also GM Logistics Center 1 (4.7%), Moffett Place Google (4.2%), Garden Village (3.6%), and Apple Sunnyvale (3.5%), represent 21.3% of the initial pool balance, while the 10 largest loans represent 37.8%.

KBRA’s analysis of the transaction incorporated our multi-borrower rating process that begins with our analysts' evaluation of the 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 Methodology. On an aggregate basis, KNCF was 7.0% 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, 39.3% less than third party appraisal values. The pool has an in-trust KLTV of 95.1% and an all-in KLTV of 105.9%. The model deploys rent and occupancy stresses, probability of default regressions, and loss given default calculations to determine losses for each collateral loan that are then used to assign our credit ratings.

For complete details on the analysis, please see our presale report, UBS 2017-C1 published today at www.kbra.com. The report includes our KBRA Comparative Analytic Tool (KCAT), 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 included in our CMBS Monthly Trend Watch publication.
  • Excel-based property cash flow statements for the top 20 loans.

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 asset-level representations, warranties and enforcement mechanisms set forth in the related offering documents when issuing credit ratings. KBRA’s disclosure for this transaction is contained in the report entitled CMBS: UBS 2017-C1 Representations & Warranties Disclosure Report.

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

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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

Kroll Bond Rating Agency, Inc.
Analytical:
James Wang, 646-731-2450
jwang@kbra.com
or
Yee Cent Wong, 646-731-2374
ywong@kbra.com
or
Robin Regan, 646-731-2358
rregan@kbra.com
or
Alec Abrams, 646-731-2401
aabrams@kbra.com

Contacts

Kroll Bond Rating Agency, Inc.
Analytical:
James Wang, 646-731-2450
jwang@kbra.com
or
Yee Cent Wong, 646-731-2374
ywong@kbra.com
or
Robin Regan, 646-731-2358
rregan@kbra.com
or
Alec Abrams, 646-731-2401
aabrams@kbra.com