KBRA Credit Profile (KCP) Releases Special Report: Coronavirus Impact: CMBS Exposure to Hawaii Lodging and Retail

NEW YORK--()--Kroll Bond Rating Agency (KBRA) releases a special report, Coronavirus Impact: CMBS Exposure to Hawaii Lodging and Retail, which examines CMBS exposure to lodging and retail properties in Hawaii. As concerns mount over the recent outbreak of coronavirus-related illness, world governments are focused on measures aimed at curbing the spread of the disease known as COVID-19. While financial markets react to the political and economic consequences of the coronavirus, KBRA is actively examining our coverage universe to gauge exposure to the potential impacts of the crisis across various markets and property types within CMBS. As a result of current prevention efforts, which include quarantines and travel restrictions, we believe properties located in markets with economies heavily dependent on tourism may experience early impacts to performance. This includes Hawaii, where tourism is the largest economic driver. We expect Hawaii’s lodging and retail segments to be particularly impacted, given our understanding of the dynamics of the tourism industry as it relates to commercial real estate performance.

Hawaii is home to 18 lodging properties—$4.33 billion by allocated loan amount (ALA)—that serve as collateral for 17 loans securitized in 25 CMBS transactions. Additionally, there are 28 retail properties collateralizing 28 loans ($2.95 billion) in 30 securitizations. While the duration and reach of the epidemic as well as the severity of its impact on tourism to Hawaii remain unknown, we attempt to quantify the risk to lodging performance in this report by stress testing collateral cash flow for selected loans secured by Hawaii lodging properties.

We will continue to monitor ongoing developments related to the coronavirus outbreak and report on the potential impact to CMBS collateral within our monthly KCP report for each transaction.

To read the full report, click here.

For subscribers of the KCP Platform, a list of loans with exposure to Hawaii lodging and retail properties can be accessed by clicking here.

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About KBRA Credit Profile

KCP is a research service and nothing herein or otherwise provided by KCP shall be construed as a rating. Any rating opinions, analysis, projections, observations, data or other items constituting part of any information provided or distributed by KCP or KBRA are and must be construed solely as statements of opinion and not statements of fact.

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:
Ryan Friend, Senior Analyst
+1 (215) 882-5915
rfriend@kbra.com

Santiago Alvarez, Director
+1 (215) 882-5851
salvarez@kbra.com

Patrick Czupryna, Senior Director
+1 (215) 882-5854
pczupryna@kbra.com

Laura Shannon, Managing Director
+1 (215) 882-5860
lshannon@kbra.com

Business Development Contact:
Marc Iadonisi, Senior Sales Director
+1 (215) 882-5877
miadonisi@kbra.com

Contacts

Analytical:
Ryan Friend, Senior Analyst
+1 (215) 882-5915
rfriend@kbra.com

Santiago Alvarez, Director
+1 (215) 882-5851
salvarez@kbra.com

Patrick Czupryna, Senior Director
+1 (215) 882-5854
pczupryna@kbra.com

Laura Shannon, Managing Director
+1 (215) 882-5860
lshannon@kbra.com

Business Development Contact:
Marc Iadonisi, Senior Sales Director
+1 (215) 882-5877
miadonisi@kbra.com