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KBRA Affirms All Outstanding Ratings for BB-UBS Trust 2012-TFT

1 Aug 2025   |   New York

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KBRA affirms all outstanding ratings for BB-UBS Trust 2012-TFT, a CMBS large-loan transaction. The rating actions follow a surveillance review of the transaction, which has deleveraged since last review following the payoff of the Town East Mall loan and a principal curtailment for the Tucson Mall loan, which is the last remaining mortgage loan in the transaction. The affirmations reflect KBRA’s value of the loan’s collateral property, the sponsor’s inability to refinance the loan since its June 2024 maturity date, the uncertainty surrounding the final resolution of the loan—which is in special servicing—and the ongoing operational challenges facing many mid-tier regional shopping malls. KBRA also considered the potential for interest shortfalls while the special servicer works to resolve the loan, as well as principal losses and recoveries from the collateral property.

As of the July 2025 remittance period, the transaction consists of a first-lien mortgage loan secured by the borrower’s fee simple and leasehold interests in the Tucson Mall. The loan has an outstanding balance of $179.3 million ($205.5 million balance at securitization) and is secured by a portion of a 1.3 million-sf super-regional mall in Tucson, Arizona. The loan required interest-only debt service payments prior to being modified in 2021. Post-modification, the principal balance of the loan began to amortize, and property cash flow was set to be managed until the debt is paid in full. The loan transferred to the special servicer in April 2024 due to imminent maturity default ahead of its June maturity date. A forbearance and modification agreement was executed in October 2024 that granted maturity forbearance through November 2024 and required a $7.9 million principal curtailment from excess cash reserves. The maturity forbearance was extended through March 2025, and the collateral property was marketed for sale in April 2025; however, offers were not sufficient to pay off the loan and the servicer began reviewing a proposal for receivership and property management.

The borrower sponsor, Brookfield Property Partners, has repaid two of the three mall loans that originally secured the transaction at securitization. The $202.0 million Fashion Place Mall loan was paid off in June 2021 and the $102.4 million Town East Mall loan ($145.4 million balance at securitization) was paid off in June 2025. The principal balance of the Class A certificates was reduced to zero as result of the payoffs as well as the notional balance of the Class X-A certificates. Additionally, the resolution of the Town East Mall loan reduced the principal balance of the Class TE rake certificates to zero.

KBRA analyzed the cash flow for the remaining property utilizing information from the trustee and servicer to determine KNCF. The analysis produced a KNCF of $12.9 million and a KBRA value of $85.9 million ($127 per sf). Based on KBRA’s liquidation value of the mall, there is an implied principal loss of $93.4 million to the trust. The resulting in-trust KLTV is 208.7%. The property was appraised since its transfer to the special servicer; however, the updated appraisal has not been provided to KBRA. The loan carries an ARA of $48.8 million as of July 2025.

KBRA maintains the loan’s K-LOC designation and KPO of Underperform because of the sponsor’s inability to refinance the debt at the original extended maturity date, the significant decline in the value of the mall since securitization, and the uncertainty regarding the final disposition of the collateral asset.

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), one of the major credit rating agencies (CRA), is a full-service CRA 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 (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

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