KBRA Assigns Preliminary Ratings to BPR 2021-NRD

NEW YORK–(BUSINESS WIRE)–#KBRA–Kroll Bond Rating Agency (KBRA) announces the assignment of preliminary ratings to six classes of BPR 2021-NRD, a CMBS single-borrower securitization.

The collateral for the transaction is a $275.0 million non-recourse, first lien mortgage loan that was originated by Morgan Stanley Bank, N.A. on December 1, 2021. The floating rate loan has an initial two-year term with three, one-year extension options and requires monthly interest-only payments based on SOFR. The loan is secured by the borrower’s interest in Northridge Fashion Center, a two- and three-story, 1.4 million sf super-regional mall located in Northridge, California, approximately 27 miles northwest of the Los Angeles CBD. Of the total square footage, 882,117 sf serve as collateral for the subject loan.

KBRA’s analysis of the transaction included a detailed evaluation of property cash flow using our U.S. CMBS Property Evaluation Methodology and the application of our U.S. CMBS Single Borrower & Large Loan Rating Methodology. In addition, KBRA also relied on its Global Structured Finance Counterparty Methodology for assessing counterparty risk in this transaction and its ESG Global Rating Methodology, to the extent deemed applicable.

The results of our analysis yielded a KBRA net cash flow (KNCF) for the portfolio of approximately $22.4 million, which is 14.0% below the issuer’s NCF, and a KBRA value of approximately $253.8 million, which is 54.8% below the appraiser’s as-is value for the property. The resulting in-trust KBRA Loan to Value (KLTV) is 116.6%. In our analysis of the transaction, we also reviewed and considered third party engineering, environmental, seismic and appraisal reports, the results of our site inspection of the property, and legal documentation review.

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

Related Publications

• U.S. CMBS Property Evaluation Methodology
• U.S. CMBS Single Borrower & Large Loan Rating Methodology
• Methodology for Rating Interest-Only Certificates in CMBS Transactions
• Global Structured Finance Counterparty Methodology
• ESG Global Rating Methodology

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining 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 disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority pursuant to the Temporary Registration Regime. 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.

Contacts

Analytical Contacts
Michael McGorty, Senior Director (Lead Analyst)

+1 (646) 731-2393

michael.mcgorty@kbra.com

Michael Brown, Managing Director

+1 (646) 731-2307

michael.b.brown@kbra.com

Keith Kockenmeister, Senior Managing Director (Rating Committee Chair)

+1 (646) 731-2349

keith.kockenmeister@kbra.com

Business Development Contact
Michele Patterson, Managing Director

+1 (646) 731-2397

michele.patterson@kbra.com