NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) releases its Environmental, Social and Governance (ESG) Considerations by Sector: CRE Securitizations report.
In this report, we highlight ESG factors as they relate to commercial real estate (CRE) securitizations and credit risk. It does not introduce new credit variables but, rather, expands upon the factors that KBRA considers in our ratings analysis as they relate to ESG.
ESG factors are considered at both the loan and transaction level and have always been a part of our analysis. As part of this, KBRA considers credit-relevant ESG factors that could affect the likelihood that investors will receive scheduled interest payments and a full repayment of principal.
Some examples of ESG factors that KBRA may consider in CRE transactions include:
- Environmental: Contamination, climate change, energy efficiency.
- Social: Consumer behavior and demographic changes.
- Governance: Transaction and payment structure.
KBRA’s analytical approach intends to capture all meaningful factors into our ratings when we believe there will be an impact on the credit in the near term or in the future, after considering risk mitigation efforts. Factors that may influence credit analysis are not always static and require continuous surveillance. As credit factors develop more clarity, they are incorporated into KBRA’s surveillance reviews. And as new information becomes available and as future expectations evolve, the information and expectations may trend in a way that could meaningfully impact KBRA’s credit analyses and ratings.
To view the report, click here.
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KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.
