KBRA Assigns Preliminary Ratings to BANK 2019-BNK18

NEW YORK--()--Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to 17 classes of BANK 2019-BNK18 (see ratings list below), a $1.05 billion CMBS conduit transaction collateralized by 57 commercial mortgage loans secured by 243 properties.

The collateral properties are located in 17 states, with only one state exposure, California (49.7%), representing more than 10.0% of the pool balance. The pool has exposure to all of the major property types, with two each representing 10.0% or more of the pool balance: office (55.8%) and lodging (16.4%). The loans have principal balances ranging from $1.3 million to $100.0 million for the largest loan in the pool, 350 Bush Street (9.6%), which is secured by a 387,599 sf, LEED Gold certified office building located in the Financial District of San Francisco, California. The five largest loans, which also include The Alhambra (9.6%), Ford Factory (9.1%), Newport Corporate Center (7.1%), and 9201 West Sunset Boulevard (6.7%), represent 41.9% of the initial pool balance, while the top 10 loans represent 65.8%.

KBRA’s analysis of the transaction incorporated our multi-borrower rating process that begins with our analysts' evaluation of the underlying collateral properties' financial and operating performance, which determine KBRA’s estimate of sustainable net cash flow (KNCF) and KBRA value using our U.S. CMBS Property Evaluation Methodology. On an aggregate basis, KNCF was 8.3% less than the issuer cash flow. KBRA capitalization rates were applied to each asset’s KNCF to derive values that were, on an aggregate basis, 38.9% less than third party appraisal values. The pool has an in-trust KLTV of 88.3% and an all-in KLTV of 95.7%. The model deploys rent and occupancy stresses, probability of default regressions, and loss given default calculations to determine losses for each collateral loan that are then used to assign our credit ratings.

For complete details on the analysis, please see our pre-sale report, BANK 2019-BNK18 published at www.kbra.com. The report includes our BANK 2019-BNK18 KBRA Conduit Comparative Analytic Tool (KCAT), an easy to use, Excel-based workbook that provides the following information:

  • KBRA Deal Tape – Contains KBRA loan level details for every loan in the pool, and the ability for users to input adjustments to KNCF and KBRA Cap Rates and see the related impact on key deal metrics.
  • KBRA Credit Metrics Comparison Tool – Enables the user to compare the subject transaction to a user-defined transaction comp set. The feature provides many of the fields that are included in our CMBS Monthly Trend Watch publication.
  • Excel-based property cash flow statements for the top 20 loans.

To access ratings, reports and disclosures, click here.

Preliminary Ratings Assigned: BANK 2019-BNK18

             
Class       Initial Class Balance   Expected KBRA Rating
A-1       $18,052,000       AAA (sf)
A-2       $32,774,000       AAA (sf)
A-SB       $30,882,000       AAA (sf)
A-3       $100,000,000 - $305,000,0001       AAA (sf)
A-4       $308,935,000 - $513,935,0001       AAA (sf)
A-S       $90,682,000       AAA (sf)
B       $49,689,000       AA (sf)
C       $40,993,000       A- (sf)
D       $29,813,000       BBB+ (sf)
E       $23,602,000       BBB- (sf)
F       $19,876,000       BB- (sf)
G       $9,938,000       B- (sf)
H       $33,539,971       NR
X-A       $695,643,0002       AAA (sf)
X-B       $181,364,0002       AAA (sf)
X-D       $53,415,0002       BBB- (sf)
X-F       $19,876,0002       BB- (sf)
X-G       $9,938,0002       B- (sf)
X-H       $33,539,9712       NR
         

1The exact initial certificate balances of the Class A-3 and A-4 certificates will not be determined until final pricing. However, the aggregate certificate balance of the Class A-3 and A-4 certificates is expected to be $613.935 million.
2Notional balance.

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 designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is 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 Contacts:
Kenneth Kor, Associate Director
(646) 731-2339
kkor@kbra.com

James Wang, Senior Director
(646) 731-2450
jwang@kbra.com

Susannah Keagle, Senior Director
(646) 731-3357
skeagle@kbra.com

Contacts

Analytical Contacts:
Kenneth Kor, Associate Director
(646) 731-2339
kkor@kbra.com

James Wang, Senior Director
(646) 731-2450
jwang@kbra.com

Susannah Keagle, Senior Director
(646) 731-3357
skeagle@kbra.com