KBRA assigns preliminary ratings to BX 2021-XL2

NEW YORK–(COMMERCIAL THREAD) – Kroll Bond Rating Agency (KBRA) announces preliminary ratings assigned to seven classes of BX 2021-XL2, a single-borrower CMBS securitization.

The collateral for the transaction is a $ 2.19 billion non-recourse first mortgage. The variable rate loan has an initial term of two years with three options for one year extension and requires monthly interest payments based solely on one month’s LIBOR. The loan is secured by the borrowers’ fee simple (99.7% of ALA) and leasehold interest (0.3%) on 121 properties, mainly made up of industrial assets (99.8%). The portfolio comprises 17.0 million square feet, with properties located in 10 states. In August 2021, the portfolio had an occupancy rate of 95.3%.

KBRA’s analysis of the transaction included a detailed cash flow assessment of the properties cash flows using our Methodology for evaluating the properties of CMBS in the United States and the application of our CMBS Single Borrower and Large Loans Rating Methodology. In addition, KBRA also relied on its Global structured finance counterpart methodology to assess the counterparty risk in this transaction, to the extent deemed applicable.

The results of our analysis yielded a KBRA Net Cash Flow (KNCF) for the portfolio of approximately $ 98.7 million, or 8.3% less than the issuer’s NCF, and an aggregate value of KBRA by approximately $ 1.3 billion, or 57.1% less than the total of the appraiser’s individual as-is values ​​for each property in the portfolio. The resulting KBRA Loan to Value (KLTV) trust is 168.6%. In our analysis of the transaction, we also reviewed and considered third party technical, environmental, seismic and appraisal reports; the results of our site inspection of the properties and review of legal documentation.

Click on here to view the report. To access the assessments and relevant documents, click on here.

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Further information on key credit considerations, sensitivity analyzes that examine the factors that may affect these credit ratings and how they might lead to an upgrade or downgrade, and ESG factors (where they are a key factor in changing the credit rating or rating outlook) can be viewed in the full rating report mentioned above.

A description of all substantially significant sources that were used to prepare the credit rating and information about the method (s) (including significant models and sensitivity analyzes of the relevant key rating assumptions, if any) used to determine the credit rating is available in the information disclosure form (s) located here.

Information on the meaning of each rating category can be located here.

Further information relating to this rating measure is available in the information disclosure form (s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures can be found at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the United States Securities and Exchange Commission as NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a credit rating agency with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a credit rating agency with the UK Financial Conduct Authority under the temporary registration regime. In addition, KBRA is appointed as the designated rating agency by the Ontario Securities Commission for issuers of asset-backed securities to file a simplified prospectus or a shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a credit rating provider.

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