NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to seven classes of TRTX 2018-FL1, a commercial real estate collateralized loan obligation (CRE CLO) securitization with post-closing ability to acquire loan participations related to the transaction collateral, provided that the pool’s loan HERF is 21.0 or higher, and dispose of loans at par under certain circumstances. The transaction, at $932.4 million, is the second largest CRE CLO to be issued post crisis.
The transaction will initially be collateralized by 26 commercial mortgage loans, comprised of 25 non-controlling participations (96.1%) and one whole loan (3.9%), secured by a total of 63 properties. Together, these assets (along with the related non-trust companion participations) represent a total committed balance of $2.1 billion. In aggregate, the non-trust companion participations consist of $883.9 million of funded participations in 23 loans (89.0%), and $275.1 million of unfunded future funding commitments that relate to 19 loans (80.5%). Throughout the life of the securitization, the transaction’s principal proceeds can be used to purchase eligible funded companion participations.
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 were, on average, 11.8% and 21.0% less than the issuer as-is and stabilized net cash flow, and KBRA property values that were 40.6% and 52.0% lower, on average, than the as-is and stabilized third party appraisal value. The resulting KBRA in-trust Loan to Value (KLTV) was 124.9%.
Ratings Assigned: TRTX 2018-FL1
|Class of Notes||Balance||Subordination||
|Stated Maturity Date|
|A||$491,831,000||47.250%||No||AAA (sf)||February 2035|
|A-S||$72,259,000||39.500%||No||AAA (sf)||February 2035|
|B||$55,943,000||33.500%||No||AA- (sf)||February 2035|
|C||$52,446,000||27.875%||Yes||A- (sf)||February 2035|
|D||$73,425,000||20.000%||Yes||BBB- (sf)||February 2035|
|E||$37,295,000||16.000%||Yes||BB- (sf)||February 2035|
|F||$37,296,000||12.000%||Yes||B- (sf)||February 2035|
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: TRTX 2018-FL1 Representations & Warranties Disclosure.
Related Publications (available at www.kbra.com):
- CMBS: TRTX 2018-FL1 Pre-Sale Report
- U.S. CMBS Multi-Borrower Rating Methodology
- CMBS Property Evaluation Methodology
- KBRA Comparative Analytic Tool (CRE CLO KCAT)
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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 recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and 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.