KBRA Releases CMBS Exposure to Toys “R” Us

NEW YORK--()--Kroll Bond Rating Agency (KBRA) releases CMBS Exposure to Toys “R” Us.

On Wednesday, March 14, Toys “R” Us announced plans to sell or close all of its U.S. stores, including those in Puerto Rico. The retailer operated stores under both the Toys “R” Us and Babies “R” Us brands. The announcement comes on the heels of several failed attempts to find a buyer to keep the business running and restructure its current debt obligations.

KBRA has been monitoring the developing situation and the potential impact, if any, that it may have on ratings assigned to CRE securitizations. We have identified 64 loans ($2.43 billion in principal balance) inclusive of 13 pari-passu notes within 61 KBRA rated transactions that have Toys “R” Us or Babies “R” Us as either a collateral or non-collateral tenant. As a percentage of a transaction’s principal balance, the loan amount for those properties ranges from 0.3% to 12.1%. In each case, the rent contribution from Toys “R” Us collateral tenants is a relatively small percentage of the related property’s revenues.

As a result, no rating actions are imminent at this time. However, for those affected properties, particularly in cases where a retail center is already facing challenges, there could be adverse consequences to the property.

We will continue to monitor the situation and any impact that the closure or sale of these stores could have on our rated securities. For a list of KBRA’s rated transactions that includes properties with Toys “R” Us as a tenant, including non-collateral exposure, please click here.

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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

Kroll Bond Rating Agency
Analytical:
Larry Kay, 646-731-2452
Senior Director
lkay@kbra.com
or
William Petersen, 215-882-5861
Managing Director
wpetersen@kbra.com
or
Eric Thompson, 646-731-2355
Senior Managing Director
ethompson@kbra.com

Contacts

Kroll Bond Rating Agency
Analytical:
Larry Kay, 646-731-2452
Senior Director
lkay@kbra.com
or
William Petersen, 215-882-5861
Managing Director
wpetersen@kbra.com
or
Eric Thompson, 646-731-2355
Senior Managing Director
ethompson@kbra.com