KBRA Credit Profile (KCP) Releases Research – Sizing Up CMBS Exposure to Simon Property Group

NEW YORK--(BUSINESS WIRE)--KBRA Credit Profile (KCP), a division of KBRA Analytics, releases a special report which identifies CMBS exposure to Simon Property Group (SPG) sponsorship and examines the credit risks of individual loans and properties using a variety of commercial real estate metrics, including in-line tenant occupancy, net cash flow, and debt yield. The examination also considers qualitative characteristics including anchor rosters, competitive landscape, and market tier.

SPG is the largest retail REIT and shopping mall operator in the U.S., including ownership of 83 properties collateralizing 73 CMBS loans ($14.47 billion) securitized across 151 transactions. But despite its size, operational expertise, and deep brand relationships, SPG is not immune to the adverse effects of the coronavirus (COVID-19) pandemic. The company’s retail properties were closed, in aggregate, for approximately 10,500 days during Q2 2020 and rent abatements were provided to tenants for the period in which they were closed. In recent months, SPG revealed its intention to hand over the keys to four underperforming CMBS malls ($410.9 million). Other SPG properties in CMBS, through KCP’s analysis, exhibit similar credit profiles to the assets being conveyed to the lenders. While most SPG-sponsored loans reported current, KCP anticipates that the COVID-19 pandemic, among other factors, will continue to put downward pressure on retail loan performance and may limit SPG’s commitment to underperforming assets.

The KCP platform is a subscription-based surveillance service that covers over 1,100 commercial real estate (CRE) securitizations with an aggregate balance of over $700 billion. For each deal, monthly reports are posted to our website that contain color and commentary for CMBS transactions and their underlying loan collateral. Unlike other sources of valuation and loss data, which primarily rely on models, the service is supported by a dedicated team of analysts, who can more readily appreciate the nonhomogeneous nature of CRE, loan, and transaction structures, as well as imperfect servicer information.

Click here to review the report.

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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.

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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 is registered with ESMA as a CRA. Kroll Bond Rating Agency Europe is located at 6-8 College Green, Dublin 2, Ireland.