NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) is pleased to assign preliminary ratings to seven classes of LCCM 2017-FL1, a $456.9 million CRE CLO transaction with limited post-closing acquisition ability.
The transaction will initially be collateralized by 19 mortgage loan assets with an aggregate cut-off date principal balance of $456.9 million. The initial collateral consists of whole loans or participations in whole loans. With respect to the participations, eleven loans (74.1%) have related unfunded future advance obligations represented by companion pari passu participations with an aggregate unfunded amount of $54.8 million. During the transaction’s acquisition period, which ends in April 2020, principal proceeds can be used to acquire non-trust companion pari passu participations; provided that such participations have been funded and satisfy the acquisition criteria set forth in the indenture.
KBRA’s analysis of the transaction involved a detailed evaluation of the underlying cash flows using our CMBS Property Evaluation Methodology and the application of our US CMBS Multi-Borrower Rating Methodology. The results of the analysis yielded KNCF for the underlying collateral properties that was, on average, 11.9% less than the issuer cash flow. KBRA primarily relied on the direct capitalization approach to arrive at valuation of each of the underlying properties. The KBRA values were, on average, 34.5% and 48.1% lower than the appraiser’s as-is values and stabilized values, respectively. The resulting KBRA in-trust Loan to Value (KLTV) was 119.4%.
For complete details on the analysis, please see our pre-sale report, LCCM 2017-FL1 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 ratings that differ from the preliminary ratings.
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Preliminary Ratings Assigned: LCCM 2017-FL1 |
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| Class | Initial Note Balance | Expected KBRA Rating | ||||
| A | $244,415,000 | AAA (sf) | ||||
| A-S | $35,997,000 | AAA (sf) | ||||
| B | $26,269,000 | AA- (sf) | ||||
| C | $25,698,000 | A- (sf) | ||||
| D | $39,974,000 | BBB- (sf) | ||||
| E | $12,564,000 | BB (sf) | ||||
| F | $19,987,000 | B (sf) | ||||
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G |
$51,966,476 | 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 asset level representations, warranties and enforcement mechanisms that are set forth in the offering document when issuing credit ratings. KBRA’s disclosure for this transaction can be found in the report entitled CMBS: LCCM 2017-FL1 Representations & Warranties Disclosure.
Related Publications (available at www.kbra.com):
- CMBS: LCCM 2017-FL1 Pre-Sale Report
- U.S. CMBS Multi-Borrower Rating Methodology
- CMBS Property Evaluation Methodology
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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).
