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KBRA Assigns Preliminary Ratings to UBS 2019-C17

NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to 17 classes of UBS 2019-C17 (see ratings list below), a $807.3 million CMBS conduit transaction collateralized by 70 commercial mortgage loans secured by 97 properties.

The collateral properties are located in 32 states, with the top three states represented by California (20.6%), Michigan (8.1%), and Pennsylvania (6.6%). The pool has exposure to all the major property types, with the top three being retail (22.9%), lodging (21.8%), and industrial (15.3%). The loans have principal balances ranging from $875,000 to $50.4 million for the largest loan in the pool, Grand Canal Shoppes (6.2%), which is secured by a 759,891-sf specialty retail, entertainment, and dining complex located on the Strip in Las Vegas, Nevada. The five largest loans, which also include Phoenix Industrial Portfolio II (5.0%), 600 & 620 National Avenue (4.8%), Phoenix Industrial Portfolio I (4.1%) and 10000 Santa Monica Boulevard (3.1%), represent 23.2% of the initial pool balance, while the top 10 loans represent 37.4%.

KBRA’s analysis of the transaction incorporated our multi-borrower rating process that begins with our analysts’ evaluation of the underlying collateral properties’ financial and operating performance, which determine KBRA’s estimate of sustainable net cash flow (KNCF) and KBRA value using our U.S. CMBS Property Evaluation Methodology. On an aggregate basis, KNCF was 6.8% 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, 38.0% less than third party appraisal values. The pool has an in-trust KLTV of 103.1% and an all-in KLTV of 106.7%. The model deploys rent and occupancy stresses, probability of default regressions, and loss given default calculations to determine losses for each collateral loan that are then used to assign our credit ratings.

For complete details on the analysis, please see our pre-sale report published 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: UBS 2019-C17

Class

Initial Class Balance

Expected KBRA Rating

A-1

$29,683,000

AAA (sf)

A-2

$8,978,000

AAA (sf)

A-SB

$51,293,000

AAA (sf)

A-3

$75,000,000 – $230,000,0001

AAA (sf)

A-4

$245,181,000 – $400,181,0001

AAA (sf)

A-S

$60,550,000

AAA (sf)

B

$36,330,000

AA (sf)

C

$36,330,000

A (sf)

D

$23,211,000

A- (sf)

E

$20,184,000

BBB (sf)

F

$17,155,000

BB+ (sf)

G

$9,083,000

BB- (sf)

NR-RR

$39,358,117

NR

X-A

$565,135,0002

AAA (sf)

X-B

$133,210,0002

AAA (sf)

X-D

$43,395,0002

BBB (sf)

X-F

$17,155,0002

BB+ (sf)

X-G

$9,083,0002

BB- (sf)

1The exact initial certificate balances will not be determined until final pricing. 2Notional balance.

To access ratings, reports and disclosures, click here.

Related Publications: (available at www.kbra.com)

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About KBRA and KBRA Europe

KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.

Contacts

Analytical Contacts:
Christina Chou, Associate

(646) 731-3387

cchou@kbra.com

Michael Brown, Managing Director

(646) 731-2307

mbbrown@kbra.com

James Wang, Senior Director

(646) 731-2450

jwang@kbra.com

Susannah Keagle, Senior Director

(646) 731-3357

skeagle@kbra.com

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