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Home>KBRA Assigns Preliminary Ratings to LCCM 2017-FL1

KBRA Assigns Preliminary Ratings to LCCM 2017-FL1

KBRA Assigns Preliminary Ratings to LCCM 2017-FL1

10/02/2017

KBRA Assigns Preliminary Ratings to LCCM 2017-FL1

Kroll Bond Rating Agency (KBRA) is pleased to assign preliminary ratings to seven classes of LCCM 2017-FL1, a $456.9 million CRE CLO transaction with limited post-closing acquisition ability.

The transaction will initially be collateralized by 19 mortgage loan assets with an aggregate cut-off date principal balance of $456.9 million. The initial collateral consists of whole loans or participations in whole loans. With respect to the participations, eleven loans (74.1%) have related unfunded future advance obligations represented by companion pari passu participations with an aggregate unfunded amount of $54.8 million. During the transaction’s acquisition period, which ends in April 2020, principal proceeds can be used to acquire non-trust companion pari passu participations; provided that such participations have been funded and satisfy the acquisition criteria set forth in the indenture.

KBRA’s analysis of the transaction involved a detailed evaluation of the underlying cash flows using our CMBS Property Evaluation Methodology and the application of our US CMBS Multi-Borrower Rating Methodology. The results of the analysis yielded KNCF for the underlying collateral properties that was, on average, 11.9% less than the issuer cash flow. KBRA primarily relied on the direct capitalization approach to arrive at valuation of each of the underlying properties. The KBRA values were, on average, 34.5% and 48.1% lower than the appraiser’s as-is values and stabilized values, respectively. The resulting KBRA in-trust Loan to Value (KLTV) was 119.4%.

For complete details on the analysis, please see our pre-sale report, LCCM 2017-FL1 published today 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.

Preliminary Ratings Assigned: LCCM 2017-FL1

             
Class     Initial Note Balance     Expected KBRA Rating
A     $244,415,000     AAA (sf)
A-S     $35,997,000     AAA (sf)
B     $26,269,000     AA- (sf)
C     $25,698,000     A- (sf)
D     $39,974,000     BBB- (sf)
E     $12,564,000     BB (sf)
F     $19,987,000     B (sf)

G

    $51,966,476     NR
       

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