NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency, Inc. (KBRA) is pleased to announce the assignment of preliminary ratings to the $388.5 million loan-specific Class CM certificates issued in connection with the COMM 2015-CCRE23 transaction (see ratings list below). No other certificates issued by COMM 2015-CCRE23 will be rated by KBRA. The Class CM certificates are collateralized by a $33.5 million A-note and a subordinate $355.0 million B-note that comprise part of the $670.0 million fixed-rate Courtyard by Marriott Portfolio whole loan originated by German American Capital Corporation. The loan has a five-year term. Proceeds from the mortgage loan were used to refinance $566.8 million of debt, which was securitized in the LBUBS 2005-C3, LBUBS 2005-C5, LBUBS 2005-C7, LBUBS 2006-C1 transactions.
The Courtyard by Marriott Portfolio loan is collateralized by first priority mortgages secured by the borrower’s fee simple interests in nine hotels with 1,297 keys; fee and leasehold interests in 49 hotels with 7,261 keys, and the borrower’s leasehold interests in seven hotels with 1,032 keys. All of the properties are select-service hotels operated under the Courtyard by Marriott flag. The assets were built between 1985 and 1990 and range in size from 131 to 155 keys. Since its acquisition in 2005, approximately $318.7 million has been invested in capital improvements across the portfolio.
The assets are located in 40 different MSAs in 29 states. Over 93% of the collateral properties by ALA are located in markets considered to be primary or secondary by KBRA. The primary market exposure (42.3%) includes seven of the ten largest properties by ALA that equate to 22.2% of the portfolio balance. In addition, the portfolio’s four largest MSA concentrations are all primary markets, which include San Francisco (two properties, 8.4%), Chicago (six properties, 8.3%), Denver (three properties, 6.8%) and Los Angeles (two properties, 4.9%).
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 net cash flow (KNCF) for each asset, and applied KBRA capitalization rates to each property’s KNCF to determine property value. The weighted average variance to the issuer’s NCF was 0.1%, and the weighted average value variance to each property’s third party appraisal values was 32.0%. The analysis produced an aggregate KBRA value of $759.3 million and an in- trust KLTV of 88.2%.
For further details on KBRA’s analysis of the transaction, please see our Pre-Sale Report, entitled COMM 2015-CCRE 23 – Courtyard by Marriott Portfolio, which was published today at www.kbra.com.
The preliminary ratings are based on information known to KBRA at the time of this publication. Information received subsequent to this release could result in the assignment of final ratings that differ from the preliminary ratings.
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Preliminary Ratings Assigned: COMM 2015-CCRE23 Courtyard by Marriott Portfolio |
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| Class | Expected Rating | Balance (US$) | |||||||||||
| CM-A | AA(sf) | $33,500,000 | |||||||||||
| CM-X-CP | AA(sf) | $205,381,000(1) | |||||||||||
| CM-X-EXT | AA(sf) | $33,500,000(2) | |||||||||||
| CM-B | A-(sf) | $84,500,000 | |||||||||||
| CM-C | BBB-(sf) | $87,381,000 | |||||||||||
| CM-D | BB-(sf) | $121,483,000 | |||||||||||
| CM-E | B(sf) | $61,636,000 | |||||||||||
| (1) Notional balance equal to the aggregate certificate balance of the Class CM-A, CM-B and CM-C certificates, and for any distribution date on and after the distribution date in May 2016, the notional balance will be equal to the Class CM-B and CM-C certificates. | |||||||||
| (2) Notional balance equal to the certificate balance of the Class CM-A certificates. | |||||||||
17g-7 Disclosure:
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 COMM 2015-CCRE 23 – Courtyard by Marriott Portfolio 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).
