KBRA Assigns Preliminary Ratings to BX Commercial Mortgage Trust 2019-ATL

NEW YORK--()--Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to nine classes of BX Commercial Mortgage Trust 2019-ATL, a $243.7 million CMBS single-asset, single-borrower transaction.

The collateral for the transaction consists of a $243.7 million non-recourse, first lien mortgage loan. The floating rate loan has an initial two-year term with three one-year extension options and requires monthly interest-only payments based on one-month LIBOR plus a spread of 1.85%. The loan is secured by the borrower’s fee simple interest in the Hyatt Regency Atlanta, a 1,260-key full-service hotel located along Peachtree Street in Atlanta, Georgia. The hotel was developed by Hyatt in 1967 and was subsequently expanded in 1972 and 1981. The seller, Hyatt, has spent $133.8 million ($106,211 per key) on capital improvements since 2008.

KBRA’s analysis of the transaction included a detailed evaluation of the property’s cash flow using our U.S. CMBS Property Evaluation Methodology, and the application of our U.S. CMBS Single Borrower and Large Loan Rating Methodology. The results of our analysis yielded a KBRA net cash flow (KNCF) for the property of $26.4 million. We applied a capitalization rate of 10.75% and arrived at a KBRA value of $245.1 million and a KBRA Loan to Value (KLTV) of 99.4%. In our analysis of the transaction, we also reviewed and considered third party engineering, environmental and appraisal reports; management agreement; STR reports; the results of our site inspection; and legal documentation.

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 ratings that differ from the preliminary ratings.

For further details on KBRA’s analysis, please see our pre-sale report published at www.kbra.com. To access ratings, reports and disclosures, click here.

Preliminary Ratings Assigned: BX Commercial Mortgage Trust 2019-ATL

Class

 

Initial Class Balance

 

Expected
KBRA Rating

A

 

$87,590,000

 

AAA (sf)

X-CP

 

$129,200,0001

 

AAA (sf)

X-NCP

 

$129,200,0001

 

AAA (sf)

B

 

$22,800,000

 

AA- (sf)

C

 

$18,810,000

 

A (sf)

D

 

$21,090,000

 

BBB+ (sf)

E

 

$24,358,000

 

BBB- (sf)

F

 

$34,931,000

 

BB- (sf)

G

 

$21,936,000

 

B (sf)

VRR

 

$12,185,0002

 

NR

R

 

N/A

 

NR

1Notional balance. 2Represents the “eligible vertical interest” in satisfaction of the US Risk Retention Rules.

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 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:

Laura Wolinsky, Director
(646) 731-2379
lwolinsky@kbra.com

Michael Brown, Managing Director
(646) 731-2307
mbbrown@kbra.com

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

Business Development Contact:

Michele Patterson, Managing Director
(646) 731-2397
mpatterson@kbra.com

Contacts

Analytical Contacts:

Laura Wolinsky, Director
(646) 731-2379
lwolinsky@kbra.com

Michael Brown, Managing Director
(646) 731-2307
mbbrown@kbra.com

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

Business Development Contact:

Michele Patterson, Managing Director
(646) 731-2397
mpatterson@kbra.com