-

KBRA Releases Research - Time Is Not Free: Loan Modifications in SASB CMBS 2.0

NEW YORK--(BUSINESS WIRE)--KBRA releases research examining loan modifications in the single-asset single borrower (SASB) commercial mortgage-backed securities (CMBS) sector. SASB activity is expected to remain an important part of the market, while upcoming loan maturities will continue to test refinancing availability and lender selectivity. Following KBRA’s prior SASB default and loss research, this report reviews 54 SASB CMBS 2.0 loans that were modified. The analysis focuses on what borrowers provided in exchange for additional time and whether the modifications included meaningful lender protections.

Key Takeaways

  • Loan extensions were the most common workout tool (65%), and all but one extended loan included at least one additional modification feature.
  • Additional sponsor contribution (56%), cash management (50%), and liquidity management (48%) were among the most common borrower or structural concessions.
  • Reperforming loans had the highest modification complexity, averaging 2.6 workout features excluding loan extensions.
  • The data does not show that modifications consistently led to improved property operations; however, characterizing them as “extend and pretend” is also an oversimplification. Rather, outcomes are loan-specific, with most extensions granted in exchange for capital, controls, deleveraging, or liquidity support.
  • While property type influenced the form of modification, the overall trend in the number of modification features was similar across major property types.
  • Resolved loans with no- or low-loss outcomes generally maintained stronger debt service coverage (DSC) (1.90x) and debt yield (DY) (10.4%) metrics than loans resolved with significant losses (1.10x DSC and 6.1% DY).

Click here to view the report.

Recent Publications

About KBRA

KBRA, one of the major credit rating agencies, is registered in the U.S., EU, and the UK. KBRA is recognized as a Qualified Rating Agency in Taiwan, and is also a Designated Rating Organization for structured finance ratings in Canada. As a full-service credit rating agency, investors can use KBRA ratings for regulatory capital purposes in multiple jurisdictions.

Doc ID: 1015865

Contacts

Gina McKeever, Associate Director
+1 215-882-5870
gina.mckeever@kbra.com

Kevin Lagerquist, Associate
+1 646-731-1404
kevin.lagerquist@kbra.com

Robert Grenda, Managing Director
+1 215-882-5494
robert.grenda@kbra.com

Business Development Contact

Andrew Foster, Senior Director
+1 646-731-1470
andrew.foster@kbra.com

Kroll Bond Rating Agency, LLC

Details
Headquarters: New York City, New York
CEO: Jim Nadler
Employees: 400+
Organization: PRI

Release Versions

Contacts

Gina McKeever, Associate Director
+1 215-882-5870
gina.mckeever@kbra.com

Kevin Lagerquist, Associate
+1 646-731-1404
kevin.lagerquist@kbra.com

Robert Grenda, Managing Director
+1 215-882-5494
robert.grenda@kbra.com

Business Development Contact

Andrew Foster, Senior Director
+1 646-731-1470
andrew.foster@kbra.com

Social Media Profiles
More News From Kroll Bond Rating Agency, LLC

KBRA Assigns Preliminary Ratings to RCKT Mortgage Trust 2026-CES10 (RCKT 2026-CES10)

NEW YORK--(BUSINESS WIRE)--KBRA assigns preliminary ratings to 20 classes of mortgage-backed notes from RCKT Mortgage Trust 2026-CES10 (RCKT 2026-CES10). RCKT Mortgage Trust 2026-CES10 (RCKT 2026-CES10) is a $548.1 million RMBS transaction, as of the cut-off date, sponsored by Woodward Capital Management LLC, a wholly owned affiliate of Rocket Mortgage, LLC, and Loan Funding Structure V LLC, and consists entirely of newly originated closed-end second lien mortgages (CES; 100.0%). The underlying...

KBRA Assigns AAA Rating to the Los Angeles Unified School District General Obligation Bonds, Series QRRUS (2026); Outlook Stable

NEW YORK--(BUSINESS WIRE)--KBRA has assigned a long-term rating of AAA to the Los Angeles Unified School District (County of Los Angeles, California) General Obligation Bonds, Series QRRUS (2026) (Dedicated Unlimited Ad Valorem Property Tax Bonds). Concurrently, KBRA has affirmed the long-term rating of AAA on outstanding parity General Obligation Bonds of the District. The Outlook is Stable. The long-term rating reflects the exceptionally strong security structure supporting repayment of the D...

KBRA Assigns Preliminary Ratings to GW Issuer LLC, Series 2026-1

NEW YORK--(BUSINESS WIRE)--KBRA assigns preliminary ratings to the Series 2026-1, Class A-2 Notes, Class A-1-L Notes, Class B Notes and Class C Notes (the Series 2026-1 Notes) from GW Issuer, LLC (the Issuer), a communications infrastructure securitization. The transaction represents the Issuer’s first securitization. The transaction structure is a master trust, and as such, the indenture permits the issuance of additional classes and series of notes subject to certain conditions, including rat...
Back to Newsroom