News Column

Kroll Bond Rating Agency Assigns Preliminary Ratings to CG-CCRE 2014-FL1

June 12, 2014

NEW YORK--(BUSINESS WIRE)-- Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to ten classes of CG-CCRE 2014-FL1, a $343.0 million large loan floating rate CMBS transaction (see ratings listed below).

The collateral for the transaction consists of three first-lien mortgage loans secured by a total of three properties. The loans have principal balances ranging from $48.0 million to $150.0 million for the largest loan in the pool, which is secured by Yorktown Center (43.7% of trust). Yorktown Center is a 1.4 million sf, retail complex located in Lombard, Illinois. All three loans in the pool are secured by the borrowers' fee simple interests in the related properties. The mortgaged properties are located in three states, Illinois, Kansas and Texas.

KBRA’s analysis of the transaction involved a detailed evaluation of the underlying cash flows using our CMBS Property Evaluation Guidelines and the application of our CMBS Single-Borrower & Large Loan Rating Methodology. The results of the analysis yielded KNCF for the underlying collateral properties that was, on average, 6.3% less than issuer cash flow. KBRA applied our stressed capitalization rates to KNCF to arrive at valuations of the underlying properties. The KBRA values were, on average, 30.1% less than the appraiser’s as-is valuation. The resulting KBRA in-trust Loan to Value (KLTV) was 75.7%, and the all-in KLTV was 106.1%. As part of our analysis of the transaction, we also reviewed and considered third party engineering and environmental reports, our analysts’ site visits of the collateral properties, and the transaction structure.

           

Preliminary Ratings Assigned: CG-CCRE 2014-FL1

Class     Balance     Credit Enhancement     Expected Rating
A     $205,978,000     36.96%     AAA(sf)
X-CP(1)     $326,750,000     N/A     AAA(sf)
X-EXT(1)     $326,750,000     N/A     AAA(sf)
B     $48,376,000     22.16%     AA-(sf)
C     $28,924,000     13.30%     A-(sf)
D     $35,749,000     2.36%     BBB-(sf)
E     $7,723,000     0.00%     BB+(sf)
YC1(2)     $6,875,000     N/A     BB+(sf)
YC2(2)     $6,875,000     N/A     BB(sf)
YC3(2)     $2,500,000     N/A     BB-(sf)


1 Notional amount. 2 Represents a loan-specific class of certificates and is only entitled to distributions from a junior participation interest in the related mortgage loan, as described further in the “Legal Analysis” section.

Related publications (available at www.krollbondratings.com):

CMBS: CG-CCRE 2014-FL1 Presale Report

CMBS: Single Borrower & Large Loan Rating Methodology, published August 8, 2011

CMBS Property Evaluation Guidelines, published June 10, 2011

About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).



Analytical Contacts:

Michael B. Brown, 646-731-2307

mbbrown@kbra.com

or

Michael McGorty, 646-731-2393

mjoshi@kbra.com

or

Robin Regan, 646-731-2358

rregan@kbra.com


Source: Kroll Bond Rating Agency


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