Kroll Bond Rating Agency Assigns Preliminary Ratings to COMM 2012-LTRT Certificates

NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings for the COMM 2012-LTRT transaction (see ratings list below). COMM 2012-LTRT is a $259.0 million CMBS large loan transaction.

The collateral for the securitization is comprised of two, non-recourse, first lien mortgage loans. The loans which are not cross-collateralized or cross-defaulted are each secured by a mall property. The larger loan is secured by the borrowers’ fee simple interests in 540,304 sf of Westroads Mall, a 1.1 million sf super-regional mall located in Omaha, Nebraska. The second loan is secured by 581,849 sf of the Oaks Mall, a 906,349 sf super-regional mall located in Gainesville, Florida. Both properties have maintained average occupancy rates of at least 94.9% since 2008, and have experienced increasing in-line sales per sf in recent years. The loans have a ten year term and are structured with a 30-year amortization schedule.

KBRA’s analysis of the transaction included a detailed evaluation of the malls’ cash flows using our CMBS Property Evaluation Guidelines, and the application of our CMBS Single Borrower & Large Loan Rating Methodology. The results of our analysis yielded a KBRA Net Cash Flow (KNCF) of $28.3 million. To value the properties, we selected capitalization rates of 8.25% and 8.50% for the Westroads Mall and the Oaks Mall, respectively. The results of our analysis yielded an aggregate KBRA value of $338.5 million, which was 27.8% less than the collateral’s aggregate third party appraisal values. Our resulting KBRA Loan to Value (KLTV) was 77.3% for Westroads Mall and 75.6% for the Oaks Mall. In our analysis of the transaction, we also reviewed and considered third party engineering, environmental and appraisal reports, our own on-site inspections of the properties and the competition and legal documentation and opinions.

For complete details on the analysis, please see our Pre-Sale Report, entitled COMM 2012-LTRT which was published today at www.krollbondratings.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 final ratings that differ from the preliminary ratings.

Preliminary Ratings Assigned: COMM 2012-LTRT
Class	Expected Rating	Balance (US$)
A-1	AAA (sf)	$49,141,000
A-2	AAA (sf)	$130,859,000
X-A*	AAA (sf)	$180,000,000
B	AA (sf)	$28,423,000
C	A (sf)	$25,303,000
D	BBB+ (sf)	$13,488,000
E	BBB-(sf)	$11,786,000
*Notional Amount

17g-7 Disclosure:

All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC Rule 17g-7, to provide a description of a transaction’s representations, warranties and enforcement mechanisms that are available to investors when issuing credit ratings. KBRA’s disclosure for this transaction can be found in the report entitled COMM 2012-LTRT 17g7 Disclosure Report.

Related publications:

CMBS Property Evaluation Guidelines, published June 10, 2011

CMBS Single Borrower & Large Loan Rating Methodology, published August 8, 2011

About Kroll Bond Rating Agency

Kroll Bond Rating Agency, Inc. (www.krollbondratings.com) is registered with the SEC as a nationally recognized statistical rating organization (NRSRO). Kroll Bond Rating Agency was established in 2010 to restore trust in credit ratings by establishing new standards for assessing risk and by offering accurate, clear, and transparent ratings.