Kroll Bond Rating Agency Assigns Final Ratings to BB-UBS Trust 2012-SHOW

NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of final ratings to the BB-UBS Trust 2012-SHOW transaction (see ratings list below). BB-UBS Trust 2012-SHOW is an $835.0 million CMBS single borrower transaction.

The collateral for the securitization is comprised of a single, non-recourse, first lien mortgage loan with an original principal balance of $835.0 million, made by Barclays Bank PLC and UBS Real Estate Securities Inc. to a special purpose entity that is indirectly owned and controlled by GGP Limited Partnership, an affiliate of General Growth Properties, Inc. (GGP). The loan is secured by the borrower’s fee simple interest in 836,006 sf of a 1.86 million sf super-regional mall known as Fashion Show Mall, which is located on the Las Vegas Strip in Nevada. The mall features seven major tenants (> 10,000 sf) and 198 in-line (<10,000 sf), food court and kiosk tenants that are predominately leased to national retailers. There are seven anchor tenants, including Nordstrom, Macy’s, Saks Fifth Avenue, Forever 21, Bloomingdale’s Home, Neiman Marcus, and Dillard’s, of which Forever 21 serves as loan collateral. Dillard’s owns its improvements and the underlying land, and the remaining anchors own their improvements subject to a ground lease with the borrower.

The mall is currently undergoing a redevelopment of portion of the center that was formerly anchored by Robinson-May. The redevelopment space will serve as collateral for the loan, and will include a new 104,406 Macy’s Men’s anchor store, as well as 97,829 sf of in-line space. To mitigate completion risk, GGP funded a $25.5 million reserve, provided a completion guaranty, and signed a master lease.

KBRA’s analysis of the transaction included a detailed evaluation of the property’s cash flow using our CMBS Property Evaluation Guidelines, and the application of our CMBS Single Borrower and Loan Rating Methodology. The results of our analysis yielded a KBRA Net Cash flow (KNCF) of $78.0 million. To value the property, we applied a 7.0% capitalization rate to arrive at a KBRA value of $1.1 billion. Our resulting KBRA Loan to Value (KLTV) was 75.0%. In our analysis of the transaction, we also reviewed and considered third party engineering and environmental reports, as well as our own on-site inspection of the property and the competition.

For complete details on the analysis, please see our presale Report, BB-UBS Trust 2012-SHOW, published on October 23, 2012 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.

Final Ratings Assigned: BB-UBS Trust 2012-SHOW

Class	Rating	Balance (USD)	Rating Action
A	AAA (sf)	539,500,000	Preliminary
X-A	AAA (sf)	539,500,000	Preliminary
X-B	AAA (sf)	82,600,000	Preliminary
B	AA (sf)	82,600,000	Preliminary
C	A (sf)	77,800,000	Preliminary
D	BBB+ (sf)	42,100,000	Preliminary
E	BBB- (sf)	93,000,000	Preliminary

Related publications (available at www.krollbondratings.com):
CMBS: Single Borrower and Large Loan Rating Methodology
CMBS: CMBS Property Evaluation Guidelines

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 BB-UBS Trust 2012-SHOW Rule 17g-7 Disclosure Report.