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KBRA Downgrades Three Ratings and Affirms All Other Ratings for WFCM 2017-C42

13 Nov 2026   |   New York

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KBRA downgrades the ratings of three classes of certificates and affirms all other outstanding ratings for WFCM 2017-C42, a $630.8 million CMBS conduit transaction. The rating actions follow a surveillance review of the transaction, which has exhibited a worsening in pool performance since KBRA's last ratings change in November 2025. The rating actions also reflect KBRA’s estimated losses for five K-LOCs (24.3%) and the resulting loss-adjusted C/E levels.

As of the October 2026 remittance report, there are three specially serviced assets (13.4% of the pool). KBRA identified six K-LOCs (27.9%), including the specially serviced assets. Five of the K-LOCs (24.3%) have estimated losses. The K-LOCs are depicted in the table below.

Loss Given Default (000s) Loss Severity 2 16 Court Street OF $66,600 10.6% Y 90+ N Foreclosure 04/04/2023 $36,912 55.4% 4 One Century Place OF $44,000 7.0% N C N Occupancy 08/01/2023 $11,083 25.2% 12 Lakeside Shopping Center RT $25,000 4.0% N C N Maturity 03/14/2025 $4,632 18.5% 14 One Lakeshore Center OF $22,452 3.6% N C N Occupancy 03/04/2024 - - 18 One Cleveland Center OF $15,719 2.5% Y C N Specially Serviced 01/03/2025 $1,427 9.1% 36 Collins MHC & Underwood Estates MH $1,907 0.3% Y 90+ N REO 07/15/2019 $1,599 83.8% Total K-LOCs $175,678 27.9% $55,652 1. K-LOC Date is the date when the most recent K-LOC was initially determined. 2. Loss Given Default assumes a 100% probability of default (PD). KBRA may determine a lower PD when estimating losses to a transaction. KBRA Estimated 2 K-LOCs Prosp. ID Loan Name Prop Type Current In- Trust Balance (000s) % of Deal Balance SS Loan Status Mod (Y/N) Primary K-LOC Reason K-LOC Date 1
Source: KBRA

Excluding the K-LOCs with estimated losses, the transaction's WA KLTV is 89.9%, compared to 99.1% at KBRA's last ratings change and 101.4% at securitization. The WA KDSC is 1.83x, compared to 1.77x at KBRA's last rating change and 1.85x at issuance.

Details concerning the classes with rating changes are as follows:

  • Class C to BBB (sf) from A- (sf)
  • Class D to B- (sf) from BB (sf)
  • Class X-D to B- (sf) from BB (sf)

To access ratings and relevant documents, click here.

Click here to view the report.

Related Publication

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.

Information on certain affiliations between directors of KBRA Ratings and rated entities or related third parties 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 US 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. Kroll Bond Rating Agency Japan K.K. is registered as a CRA with the Japan Financial Services Agency. 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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