NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings for the COMM 2013-CCRE10 transaction (see ratings list below). COMM 2013-CCRE10 is a $1.0 billion CMBS conduit transaction collateralized by 59 commercial mortgage loans that are secured by 87 properties.
The loans have principal balances ranging from $2.1 million to $100.0 million for the largest loan in the pool, which is secured by One Wilshire - Downtown (9.9%), a 663,035 sf, Class-A office tower located in El Segundo, California. The top five loans, which also include RHP Portfolio IV (5.4%), RHP Portfolio V (5.3%), Raytheon & DirecTV Buildings (4.8%), and Brighton Towne Square (4.5%), represent 29.8% of the initial pool balance, while the top 10 loans represent 48.2%. Four mortgage loan sellers, Cantor Commercial Real Estate, L.P. (53.9%), German American Capital Corporation (27.4%), KeyBank National Association (13.8%), and UBS Real Estate Securities Inc. (5.0%), contributed the loans. The majority of the loans (41 loans, 59.9% of the pool balance) were used to refinance existing debt, while the proceeds from 17 loans (39.7%) were used for property acquisitions. With respect to one loan (0.4%), the proceeds were used for recapitalization purposes.
The underlying mortgage loans are secured by the borrowers' interests in 87 collateral properties. 54 loans (89.0%) are secured by the borrowers' fee simple interest in the related properties, two loans (5.4%) are secured by the borrowers' leasehold interests in the related properties, and three loans (5.7%) are secured by the borrowers' fee and leasehold interests. The collateral properties are located in 25 different states, with only one exposure, California (25.2%), representing more than 10.0% of the pool balance. The pool has exposure to all the major property type segments with only two property type exposures, office (27.6%) and retail (17.8%), that exceed 15.0% of the pool balance.
KBRA's analysis of the transaction incorporated our multi-borrower rating process that begins with our analysts' evaluation of underlying collateral properties' financial and operating performance, which determine KBRA's estimate of sustainable net cash flow (KNCF) and KBRA value using our CMBS Property Evaluation Guidelines. KNCF was, on an aggregate basis,4.0% less than the issuer cash flow. KBRA capitalization rates were applied to each asset's KNCF to derive individual property values that, on an aggregate basis, were 34.3% lower than third party appraisal values. The weighted average capitalization rate for the transaction was 9.6%. The pool has an in-trust KLTV of 96.5% and an all-in KLTV of 99.6%.
The KBRA credit model deploys rent and occupancy stresses, probability of default regressions, and loss given default calculations to determine losses for each collateral loan, which are then used to assign our credit ratings.
For complete details on the analysis, please see our presale report, COMM 2013-CCRE10 published today at www.krollbondratings.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 final ratings that differ from the preliminary ratings.
| Preliminary Ratings Assigned: COMM 2013-CCRE10 |
| | | | | | | | |
| Class | | | | Expected Ratings | | | | Balance ($) |
| A-1 | | | | AAA(sf) | | | | $67,569,000 |
| A-2 | | | | AAA(sf) | | | | $100,105,000 |
| A-3 | | | | AAA(sf) | | | | $140,000,000 |
| A-3FL | | | | AAA(sf) | | | | $40,000,000 |
| A-4 | | | | AAA(sf) | | | | $278,534,000 |
| A-SB | | | | AAA(sf) | | | | $81,070,000 |
| X-A1 | | | | AAA(sf) | | | | $807,054,000 |
| X-B2 | | | | NR | | | | $203,343,899 |
| A-M | | | | AAA(sf) | | | | $99,776,000 |
| B | | | | AA-(sf) | | | | $59,362,000 |
| PEZ3 | | | | A-(sf) | | | | $190,712,000 |
| C | | | | A-(sf) | | | | $31,574,000 |
| D | | | | BBB-(sf) | | | | $45,469,000 |
| E | | | | BB(sf) | | | | $17,682,000 |
| F | | | | B(sf) | | | | $15,155,000 |
| G | | | | NR | | | | $34,101,899 |
1 Class X-A has a notional balance equal to the aggregate outstanding balance of the Class A-1, A-2, A-3, A-4, A-SB and A-M certificates and the Class A-3FL/FX regular interest
2 Class X-B has a notional balance equal to the aggregate outstanding balance of the Class B, C, D, E, F and G certificates.
3 Represents the maximum amount of Class PEZ certificates that could be issued in an exchange. See "Legal Analysis – Exchangeable Certificates"
17g-7 Disclosure
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 in the report entitled CMBS: COMM 2013-CCRE10 17g-7 Disclosure Report.
Related publications (available at www.krollbondratings.com):
CMBS: U.S. CMBS Multi-Borrower Rating Methodology, published February 23, 2012
CMBS Property Evaluation Guidelines, published June 10, 2011
