Kroll Bond Rating Agency Assigns Preliminary Ratings to GP Portfolio Trust 2014-GPP
NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to the GP Portfolio Trust 2014-GPP transaction (see ratings list below). GP Portfolio Trust 2014-GPP is a CMBS single borrower transaction that is collateralized by a $460.2 million, floating rate loan that was co-originated by JPMorgan Chase Bank, National Association (with respect to 60% of the original principal balance of the mortgage loan) and German American Capital Corporation (with respect to 40% of the original principal balance of the mortgage loan). The loan has an initial two year term with three one year extension options. Proceeds from the mortgage loan along with approximately $268.3 million of cash equity contributed by the loan sponsor were used to acquire 94 office and industrial assets from Liberty Property Trust for an aggregate purchase price of $697.3 million.
The loan is secured by the borrower’s fee simple interests in 94 real estate assets, as well as six vacant land parcels that are adjacent to certain of those assets. Of the 94 real estate assets, 89 assets each consist of one structure located on one parcel, two assets consist of two structures located on a single parcel, and three assets each consist of two structures located on a single parcel. 80 buildings, representing 86.2% of the aggregate allocated loan amount (ALA), are clustered together within 17 business parks. The assets are located in 17 different submarkets in five states, which include Maryland (28.5%), Florida (27.4%), New Jersey (18.4%), Pennsylvania (16.6%), and Minnesota (9.1%). The properties are leased to approximately 364 tenants with a weighted average lease term of 6.8 years, with only two tenants that account for more than 3.0% of total base rent.
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 cash flow and KLTV on an individual property basis to account for provisions in the loan documents that permit the release of any individual property without regard to whether it is located in a business park that contains other collateral assets. The results of the analysis produced an individual KNCF for each property. We applied KBRA capitalization rates to each property’s KNCF to arrive at KBRA value. The analysis produced an aggregate KNCF and KBRA value of $50.0 million and $524.5 million, respectively. The resulting in trust KLTV is 87.7%.
For further details on KBRA’s analysis of the transaction, please see our Pre-Sale Report, entitled GP Portfolio Trust 2014-GPP, which was published today at www.krollbondratings.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: GP Portfolio Trust 2014-GPP
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*Balance represents notional amount.
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 GP Portfolio Trust 2014-GPP 17g-7 Disclosure Report.
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).