NEW YORK--(EON: Enhanced Online News)--Kroll Bond Rating Agency, Inc. (KBRA) is pleased to announce the assignment of preliminary ratings to sixteen classes of the CGCMT 2016-P6 transaction. CGCMT 2016-P6 is a $913.4 million CMBS conduit transaction collateralized by 54 commercial mortgage loans secured by 94 properties.
The properties in the collateral pool are located in 28 states and Washington DC, with three states that represent more than 10.0% of the pool balance: California (16.6%), New York (14.5%), and Virginia (10.1%). The pool has exposure to all of the major property types with the exception of industrial. Three of the property types represent more than 10.0% of the pool balance: retail (33.6%), mixed-use (26.8%), and office (18.9%). The loans have principal balances ranging from $2.3 million to $75.0 million for the largest loan in the pool, 8 Times Square & 1460 Broadway (8.2%), a 214,341 sf mixed-use office/retail building in the Times Square South neighborhood of New York City. The top five loans, which also include 681 Fifth Avenue (6.3%), Quantum Park (5.5%), Potomac Mills (4.0%), and Walgreens Net lease Portfolio 6 (3.8%), represent 27.8% of the initial pool balance, while the top 10 loans represent 44.9%.
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 Methodology. On an aggregate basis, KNCF was 6.2% less than the issuer cash flow. KBRA capitalization rates were applied to each asset’s KNCF to derive values that were, on an aggregate basis, 41.3% less than third party appraisal values. The pool has an in-trust KLTV of 102.0% and an all-in KLTV of 104.3%. The 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, CGCMT 2016-P6 published today at www.kbra.com. The report includes our KBRA Comparative Analytic Tool (KCAT), an easy to use, Excel based workbook that provides the following information:
- KBRA Deal Tape – Contains KBRA loan level details for every loan in the pool, and the ability for users to input adjustments to KNCF and KBRA Cap Rates and see the related impact on key deal metrics.
- KBRA Credit Metrics Comparison Tool – Enables the user to compare the subject transaction to a user-defined transaction comp set. The feature provides many of the fields that are provided in our CMBS Monthly Trend Watch publication.
- Excel based property cash flow statements for the top 20 loans.
Preliminary Ratings Assigned: CGCMT 2016-P6
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Representations & Warranties Disclosure
All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC Rule 17g-7, to provide a description of a transaction’s asset-level representations, warranties and enforcement mechanisms set forth in the related offering documents when issuing credit ratings. KBRA’s disclosure for this transaction can be found in the report entitled CMBS: CGCMT 2016-P6 Representations & Warranties Disclosure Report.
Related publications (available at www.kbra.com):
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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).