NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency, Inc. (KBRA) is pleased to announce the assignment of preliminary ratings to six classes of Colony 2014-FL2, a $307.6 million commercial real estate collateralized loan obligation transaction (see ratings listed below).
The collateral for the transaction consists of fifteen first-lien mortgage loans secured by the fee and leasehold interests in 37 properties located in fifteen states. Three of the loans (33.6%) allow for the future funding of pari passu companion debt, all of which will be held outside the trust. Additionally, three loans (33.7%) contain existing subordinate debt in the form of a mezzanine loan, one of which (9.6%) permits future mezzanine funding.
KBRA’s analysis of the transaction involved a detailed evaluation of the underlying cash flows using our CMBS Property Evaluation Guidelines and the application of our CMBS Single-Borrower & Large Loan Rating Methodology. The results of the analysis yielded KNCF for the underlying collateral properties that was, on average, 26.5% less than issuer cash flow. KBRA applied our stressed capitalization rates to KNCF to arrive at valuations of the underlying properties. The KBRA values were, on average, 40.1% less than the appraiser’s respective valuation. The resulting KBRA in-trust Loan to Value (KLTV) was 115.1%. The weighted average all-in KLTV for the loans was 126.7%. As part of our analysis of the transaction, we also reviewed and considered third party engineering and environmental reports, our analysts’ site visits of the collateral properties, and the transaction structure.
For complete details on the analysis, please see our presale report, Colony 2014-FL2 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 final ratings that differ from the preliminary ratings.
Preliminary Ratings Assigned: Colony 2014-FL2
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