Kroll Bond Rating Agency Assigns Preliminary Ratings to Citigroup Commercial Mortgage Trust 2013-SMP

NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings for the Citigroup Commercial Mortgage Trust 2013-SMP transaction (see ratings list below). Citigroup Commercial Mortgage Trust 2013-SMP is a $240.0 million CMBS large loan transaction.

The collateral for the securitization is a single, non-recourse, first lien mortgage loan that is secured by the borrower’s fee simple and leasehold interests in 397,928 square feet (sf) of Santa Monica Place and the land underlying the Nordstrom’s anchor space. The collateral is a fee simple interest with the exception of the center’s two parking garages and 1,805 sf of retail space. The property is a 519,593 sf, three-level open-air super-regional mall located in Santa Monica, California. The property is anchored by Nordstrom and Bloomingdale’s. As of December 2012, Santa Monica Place was 94.5% occupied and sales were $723 per sf for tenants under 10,000 sf, an increase of 6.6% over the December 2011 figure of $678 per sf. These sales were 60% higher than the average in-line sales for US malls of $452 per sf reported.

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 Large Loan Rating Methodology. The results of our analysis yielded a KBRA Net Cash flow (KNCF) of $21.3 million. To value the property, we applied a 7.25% capitalization rate to arrive at a value of $293.8 million. This was further adjusted to account for the value of 43,887 sf of shell space to arrive at an ultimate KBRA value of $306.1 million. Our resulting KBRA Loan to Value (KLTV) was 78.1%. 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 Citigroup Commercial Mortgage Trust 2013-SMP, 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: Citigroup Commercial Mortgage Trust 2013-SMP
Class	Expected Rating	Balance (US$)
A	AAA (sf)	$163,379,000
X-A	AAA (sf)	$163,379,000
X-B	AAA (sf)	$50,621,000
B	AA- (sf)	$29,996,000
C	A- (sf)	$20,625,000
D	BBB- (sf)	$24,147,293
*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 Citigroup Commercial Mortgage Trust 2013-SMP 17g-7 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.