KBRA Assigns Preliminary Ratings to BX Commercial Mortgage Trust 2020-BXLP

NEW YORK--()--Kroll Bond Rating Agency (KBRA) announces the assignment of preliminary ratings to nine classes of BX Commercial Mortgage Trust 2020-BXLP, a CMBS single-borrower securitization.

The collateral for the transaction is a $3.4 billion non-recourse, first lien mortgage loan. The floating rate, interest-only loan has a two-year initial term and includes three, one-year extension options. The loan is secured by the borrowers’ fee simple and leasehold interests in 349 industrial assets, mostly warehouse/distribution facilities. The assets are located in 18 states, the three largest of which are Texas (75 properties, 21.4% of loan amount), Georgia (51, 14.0%), and Florida (32, 11.4%).

As of January 2020, the portfolio was 92.4% leased to over 850 tenants, with two that account for more than 1.0% of base rent: Snow Joe DC, LLC (1.1% of base rent), and UPS (1.1%), an HQCWT. The portfolio tenants operate within a variety of industries, including food distribution, home furnishings, manufacturing, and pharmaceuticals.

KBRA’s analysis of the transaction included a detailed evaluation of the properties’ cash flows using our U.S. CMBS Property Evaluation Methodology and the application of our U.S. CMBS Single Borrower & Large Loan Rating Methodology. In addition, KBRA also relied on its Global Structured Finance Counterparty Methodology for assessing counterparty risk in this transaction, to the extent deemed applicable.

The results of our analysis yielded a KBRA net cash flow (KNCF) of $205.7 million. To value the properties, we applied a blended capitalization rate of 7.58% to arrive at a KBRA value of $2.7 billion. The resulting KBRA Loan to Value (KLTV) is 125.3%. In our analysis of the transaction, we also reviewed and considered third party engineering, environmental, and appraisal reports; the results of our site inspection of the properties, and legal documentation review.

For further details on KBRA’s analysis, please see our pre-sale report, BX 2020-BXLP, published at www.kbra.com.

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 final ratings that differ from the preliminary ratings.

Preliminary Ratings Assigned: BX 2020-BXLP

Class

Initial Class Balance

Expected KBRA Rating

A

$1,650,000,000

AAA (sf)

X-CP1

$401,100,000

AAA (sf)

X-NCP1

$573,000,000

AAA (sf)

B

$178,000,000

AA- (sf)

C

$168,000,000

A (sf)

D

$227,000,000

BBB+ (sf)

E

$251,350,000

BBB- (sf)

F

$330,460,000

BB- (sf)

G

$424,690,000

B- (sf)

HRR

$170,500,000

NR

1 Notional amount.

To access ratings, reports and disclosures, click 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 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:

Min Qian, CFA, Director
(646) 731-3388
mqian@kbra.com

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

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

Keith Kockenmeister, Senior Managing Director
(646) 731-2349
kkockenmeister@kbra.com

Business Development:

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

Contacts

Analytical:

Min Qian, CFA, Director
(646) 731-3388
mqian@kbra.com

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

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

Keith Kockenmeister, Senior Managing Director
(646) 731-2349
kkockenmeister@kbra.com

Business Development:

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