NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) releases a report on special servicing and watchlist trends that have occurred due to disruption of property operating cash flows related to the coronavirus (COVID-19) pandemic across our rated universe of private label CMBS including conduits, single-asset, single borrower (SASB), and large loan transactions. The report also touches on what could be different during this pandemic on the management and reporting of servicer watchlist loans and specially serviced loans.
The disruption has given rise to a wave of relief requests from borrowers that is resulting in servicer watchlist placements and special servicing transfers. KBRA’s rated universe pre-pandemic ($282.5 billion) contained 1.5% of loans in special servicing, a figure which has almost doubled since March 1 to 2.7% ($7.8 billion). In terms of servicer watchlist loans, 13.3% of our rated universe were on servicer watchlists pre-coronavirus. Since March 1, this number has grown by $6.1 billion, representing 15.5% of loans.
We expect these figures will likely ramp up over the next couple of months owing to the economic disruptions from shelter-in-place and shutdown requirements. While major CMBS master servicers have told us they have received over 5,000 borrower inquiries and relief requests, much of that has yet to make it to the servicer watchlist due to the lag in data reporting and cutoff dates and/or has yet to be assessed for transfer to special servicing.
Click here to view the report.
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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) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA. Kroll Bond Rating Agency Europe Limited is located at 6-8 College Green, Dublin 2, Ireland.