KBRA Assigns Preliminary Ratings to MSC 2019-H6

NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of
preliminary ratings to 17 classes of MSC 2019-H6 (see ratings list
below), a $686.8 million CMBS conduit transaction collateralized by 46
commercial mortgage loans secured by 255 properties.


The collateral properties are located in 21 states, with two states,
California (34.8%) and New York (11.6%), representing more than 10.0% of
the pool balance. The pool has exposure to all the major property types,
with the top three being retail (29.7%), lodging (21.9%), and office
(21.7%). The loans have principal balances ranging from $2.0 million to
$65.0 million for the largest loan in the pool, 9201 West Sunset
Boulevard (9.5%), which is secured by a 166,706-sf medical office
building located in West Hollywood, California, approximately 11 miles
northwest of the Los Angeles CBD. The five largest loans, which also
include SoCal Retail Portfolio (9.4%), Marriott San Diego Mission Valley
(9.3%), ILPT Hawaii Portfolio (5.8%), and Tower 28 (4.4%), represent
38.4% of the initial pool balance, while the top 10 loans represent
57.1%.


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 6.0% less than the issuer cash flow. KBRA
capitalization rates were applied to each assets’ KNCF to derive values
that were, on an aggregate basis, 37.8% less than third party appraisal
values. The pool has an in-trust KLTV of 93.4% and an all-in KLTV of
98.9%. 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: MSC 2019-H6


Class


 


 


 


Initial Class Balance


 


 


 


Expected KBRA Rating


A-1


 


 


 


$18,000,000


 


 


 


AAA (sf)


A-2


 


 


 


$21,100,000


 


 


 


AAA (sf)


A-SB


 


 


 


$27,300,000


 


 


 


AAA (sf)


A-3


 


 


 


$90,000,000 – $190,000,0001

 


 


 


AAA (sf)


A-4


 


 


 


$224,382,000 – $324,382,0001

 


 


 


AAA (sf)


A-S


 


 


 


$63,532,000


 


 


 


AAA (sf)


B


 


 


 


$26,615,000


 


 


 


AA+ (sf)


C


 


 


 


$30,908,000


 


 


 


A (sf)


D


 


 


 


$12,534,000 – $17,342,0001

 


 


 


A- (sf)


E-RR2

 


 


 


$9,272,000 – $14,080,0001

 


 


 


BBB+ (sf)


F-RR2

 


 


 


$10,303,000


 


 


 


BBB (sf)


G-RR2

 


 


 


$7,727,000


 


 


 


BBB- (sf)


H-RR2

 


 


 


$10,302,000


 


 


 


BB (sf)


J-RR2

 


 


 


$6,869,000


 


 


 


B (sf)


K-RR2

 


 


 


$23,180,759


 


 


 


NR


X-A


 


 


 


$480,782,0003

 


 


 


AAA (sf)


X-B


 


 


 


$121,055,0003

 


 


 


AAA (sf)


X-D


 


 


 


$12,534,000 – $17,342,0001,3

 


 


 


AAA (sf)


1 The exact initial certificate balance will be determined at
final pricing.


2 In satisfaction of the US Risk Retention rules, these
classes are expected to be purchased and retained by a third-party
purchaser on the closing date. Such classes will represent an “eligible
horizontal residual interest” and will represent at least 5.0% of the
fair market value of all non-residual certificates issued.


3 Notional balance.


To access ratings, reports and disclosures, click here.


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


MSC
2019-H6 Pre-Sale Report


MSC
2019-H6 KBRA Conduit KCAT


U.S.
CMBS Property Evaluation Methodology


U.S.
CMBS Multi-Borrower Rating Methodology


Methodology
for Rating Interest-Only Certificates in CMBS Transactions


Global
Structured Finance Counterparty Methodology


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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:Courtney
Kelly, Associate(646) 731-3362ckelly@kbra.com


Michael Brown, Managing Director(646) 731-2307mbrown@kbra.com


Sacheen Shah, Director(646) 731-3363sshah@kbra.com


Dayna Carley, Senior Director(646) 731-3357dcarley@kbra.com