NEW YORK--(UBS-Barclays 2012-C3 certificates in a $1.08 billion CMBS conduit transaction. Concurrently, we have withdrawn our preliminary ratings on the certificates, which were assigned on September 11, 2012 (see our ratings listed below).)--Kroll Bond Rating Agency (KBRA) assigned its final ratings to thirteen classes of
The transaction is collateralized by 76 fixed rate commercial mortgage loans that are secured by 113 properties. The top five loan exposures represent 31.8% of the initial pool balance and the top ten loan exposures represent 45.6%. The largest loan represents 10.4% of the pool and is secured by 1000 Harbor Boulevard, an office building located in the Lincoln Harbor development in Weehawken, NJ. No other loans have a balance in excess of 10.0% of the pool. The properties are geographically diverse and located across 29 states. 13.2% of the collateral properties, by balance, are located in New Jersey. The only other states with concentrations in excess of 9% are Michigan (9.7%) and Minnesota (9.6%).
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. The analysis included a detailed evaluation of the underlying collateral properties’ financial and operating performance using our CMBS Property Evaluation Guidelines to determine KNCF. The resulting KNCF for the collateral properties was 3.0% below the issuer net cash flow on a weighted average basis. KBRA capitalization rates were applied to each asset’s KCNF to derive individual property values that, on an aggregate basis, were 30.1% less than third party appraisal values. The pool has an in-trust KLTV of 94.3% and an all-in KLTV of 95.5%.
KNCF and KBRA capitalization rates were among the key inputs used in our credit modeling process. The model deploys rent and occupancy stresses, probability of default regressions, and loss given default calculations to determine losses for each collateral loan that were used by KBRA to assign our credit ratings for this transaction.
For complete details on the analysis, please see our presale Report, UBS-Barclays 2012-C3, available at www.krollbondratings.com.
Final Ratings: UBS-Barclays 2012-C3
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About Kroll Bond Rating Agency
KBRA was established in 2010 by Jules Kroll to restore trust in credit ratings by creating new standards for assessing risk and by offering accurate, clear and transparent ratings. 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).