KBRA Assigns Preliminary Ratings to BBCMS 2019-C5

NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to 16 classes of BBCMS 2019-C5 (see ratings list below), a $1.0 Billion CMBS conduit transaction collateralized by 55 commercial mortgage loans secured by 115 properties.

The collateral properties are located in 36 states, with the top three states represented by California (13.8%), New York (8.9%), and Pennsylvania (8.3%). The pool has exposure to all the major property types, with the top three being retail (21.7%), office (21.6%), and multifamily (18.7%). The loans have principal balances ranging from $2.2 million to $66.0 million for the largest loan in the pool, GNL Office and Industrial Portfolio (6.6%), which is secured by 12 single-tenant industrial and office properties located in 10 states that together comprise 2.2 million sf. The five largest loans, which also include Presidential City (4.5%), Ceasar’s Bay Shopping Center (4.2%), NEMA San Francisco (4.0%) and Equinix Data Center (4.0%), represent 23.3% of the initial pool balance, while the top 10 loans represent 40.6%.

KBRA’s analysis of the transaction incorporated our multi-borrower rating process that begins with our analysts’ evaluation of the underlying collateral properties’ financial and operating performance, which determine KBRA’s estimate of sustainable net cash flow (KNCF) and KBRA value using our U.S. CMBS Property Evaluation Methodology. On an aggregate basis, KNCF was 6.0% less than the issuer cash flow. KBRA capitalization rates were applied to each asset’s KNCF to derive values that were, on an aggregate basis, 40.8% less than third party appraisal values. The pool has an in-trust KLTV of 98.2% and an all-in KLTV of 108.6%. The model deploys rent and occupancy stresses, probability of default regressions, and loss given default calculations to determine losses for each collateral loan that are then used to assign our credit ratings.

Preliminary Ratings Assigned: BBCMS 2019-C5

Class

Initial Class Balance

Expected KBRA Rating

A-1

$21,460,000

AAA (sf)

A-2

$86,300,000

AAA (sf)

A-3

$100,000,000 – $260,000,0001

AAA (sf)

A-4

$276,400,000 – $436,400,0001

AAA (sf)

A-SB

$30,830,000

AAA (sf)

A-S

$94,017,000

AAA (sf)

B

$40,981,000

AA (sf)

C

$39,776,000

A (sf)

D

$25,313,000

BBB+ (sf)

E

$19,285,000

BBB (sf)

F

$22,902,000

BB (sf)

G-RR

$9,642,000

B+ (sf)

H-RR

$37,366,303

NR (sf)

X-A

$674,990,0002

AAA (sf)

X-B

$174,774,0002

AAA (sf)

X-D

$44,598,0002

BBB (sf)

X-F

$22,902,0002

BB (sf)

VRR Interest

$37,048,884

NR

1The exact initial certificate balances will not be determined until final pricing; however, they are expected to fall within the above ranges. 2Notional balance.

For complete details on the analysis, please see our pre-sale report 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 ratings that differ from the preliminary ratings.

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 Contacts:
Caitlin Parrella, Associate

(646) 731-3310

cparrella@kbra.com

James Wang, Senior Director

(646) 731-2450

jwang@kbra.com

Dayna Carley, Senior Director

(646) 731-2391

dcarley@kbra.com

Business Development Contact:
Michele Patterson, Managing Director

(646) 731-2397

mpatterson@kbra.com

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