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KBRA Downgrades Two Ratings and Affirms All Other Ratings for GSMS 2016-GS4

25 Oct 2024   |   New York

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KBRA downgrades the ratings of two classes and affirms all other outstanding ratings for GSMS 2016-GS4, a $752.7 million CMBS conduit transaction. The rating actions follow a surveillance review of the transaction, which has exhibited an increase in KBRA's estimated losses on five of the K-LOCs (19.0% of the pool balance). The ratings actions also consider the transaction's capital structure which has benefitted from deleveraging through loan payoffs and amortization.

As of the October 2024 remittance period, there are two specially serviced loans (7.7% of the pool balance), one of which (0.9%) is 90+ days delinquent. KBRA identified seven K-LOCs (32.9%), including the specially serviced assets. These include:

Four top 10 loans (25.4%)

  • Quad at Whittier (4th largest, 9.3%)
  • Westchester Office Portfolio 700 Series (5th largest, 6.8% of the pool balance, 20.9% estimated loss severity)
  • Village Square (7th largest, 4.7%)
  • Hamilton Place (8th largest, 4.7%, 15.9%)

Three additional K-LOCs (7.5%) have an estimated loss:

  • Embassy Suites Portland Airport (3.3% of the pool balance, 5.7% estimated loss severity)
  • Westchester Office Portfolio 2500-2700 Series (3.2%, 20.2%)
  • Republic Place (1.0%, 32.4%)

Excluding the K-LOCs with estimated losses, the transaction’s WA KLTV is 99.5%, compared to 99.7% at last review and 89.4% at securitization. The KDSC is 2.07x, compared to 2.20x at last review and 2.81x at securitization.

Details concerning the classes with rating changes are as follows:

  • Class E to B (sf) from BB- (sf)
  • Class F to CCC (sf) from B- (sf)

To access ratings and relevant documents, click here.

Click here to view the report.

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Methodologies

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. 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.

Doc ID: 1006562

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