KBRA used a hybrid analysis to evaluate the SFR transaction, which incorporated elements of both our CMBS and RMBS methodologies, as the underlying real estate contains commercial and residential characteristics. As the properties generate a cash flow stream from tenant rental payments, CMBS methodologies were used to determine the loan’s probability of default (PD). To determine loss given default (LGD), KBRA assumed the underlying collateral properties would be liquidated in the residential property market. For details, see our pre-sale report: https://www.krollbondratings.com/show_report/1357.
Silver Bay 2014-1 is a securitization of SFR homes. Seven classes of certificates will be issued, six of which are entitled to monthly distributions of interest and principal and one of which is a residual class.
All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC Rule 17g-7, to provide a description of a transaction’s representations, warranties and enforcement mechanisms that are available to investors when issuing credit ratings. KBRA’s disclosure for this transaction can be found at http://www.krollbondratings.com/regulatory/17g-7.
KBRA was established in 2010 by