KBRA Assigns Preliminary Ratings to VB-S1 Issuer, LLC Secured Tower Revenue Notes Series 2016-1 and Series 2018-1

NEW YORK--()--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to six classes of secured tower revenue notes, Series 2016-1 and Series 2018-1 (the “Notes”) issued by VB-S1 Issuer, LLC.

The Secured Tower Revenue Notes, Series 2018-1 Class C Notes, Series 2018-1 Class D Notes, the Series 2018-1 Class F Notes and the Series 2018-1 Class R Notes (together, the “Series 2018-1 Notes”) anticipated to be issued by VB-S1 Issuer, LLC (the “Issuer”) represents Vertical Bridge Management, LLC’s (the “Manager” or the “Company”) third securitization and the Issuer’s second securitization. The Series 2018-1 Notes will be issued as an additional series of notes pursuant to the indenture dated June 8, 2016. The transaction structure is a master trust, and as such, the indenture permits the issuance of additional classes and series of notes. KBRA is providing preliminary ratings on both the Series 2016-1 Notes and the Series 2018-1 Notes. Both the Issuer and Manager are indirect subsidiaries of Vertical Bridge Holdings, LLC.

On the closing date, the closing date asset entities will own or lease 2,551 tower sites upon which the closing date asset entities have entered into 3,961 tenant leases. The portfolio has annualized run rate revenue of approximately $93.4 million and annualized run rate net cash flow of approximately $66.2 million.

The transaction will benefit from sufficient credit support, along with a dynamic transaction structure that accelerates principal payments to the noteholders upon the weakening of collateral performance. Such structural features include cash trap conditions, servicer termination events and reserve accounts as further described in the VB-S1 Issuer, LLC Secured Tower Revenue Notes Series 2016-1 and Series 2018-1 Pre-Sale Report.

KBRA analyzed the transaction using both KBRA’s Global General Rating Methodology for Asset Backed Securities published on November 28.2017 and KBRA’s CMBS Property Evaluation Methodology published on August 3, 2017.

For complete details on the analysis, please see KBRA’s pre-sale report, which was published today at www.kbra.com.

         
Series and Class*   Rating   Principal Balance (USD)
Series 2016-1, Class C   A (sf)   $240,000,000
Series 2016-1, Class D   BBB (sf)   $29,000,000
Series 2016-1, Class F   BB (sf)   $52,000,000
Series 2018-1, Class C   A (sf)   $185,000,000
Series 2018-1, Class D   BBB (sf)   $13,000,000
Series 2018-1, Class F   BB (sf)   $38,000,000
   

*Excludes Series 2018-1 Class R Notes, which will not be rated and are subordinated to the rated notes

Representations & Warranties 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 available here.

Related Publications: (available at www.kbra.com)

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About KBRA and KBRA Europe

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.

Contacts

Analytical:
Kroll Bond Rating Agency
Xilun Chen, 646-731-2431
Senior Director
xchen@kbra.com
or
Fred Perreten, 646-731-2454
Director
fperreten@kbra.com
or
Chris Baffa, 646-731-3312
Associate Director
cbaffa@kbra.com
or
Lenny Giltman, 646-731-2378
Managing Director
lgiltman@kbra.com

Contacts

Analytical:
Kroll Bond Rating Agency
Xilun Chen, 646-731-2431
Senior Director
xchen@kbra.com
or
Fred Perreten, 646-731-2454
Director
fperreten@kbra.com
or
Chris Baffa, 646-731-3312
Associate Director
cbaffa@kbra.com
or
Lenny Giltman, 646-731-2378
Managing Director
lgiltman@kbra.com