KBRA Downgrades Six Ratings and Affirms All Other Ratings for SGCMS 2016-C5
3 Jul 2024 | New York
KBRA downgrades the ratings of six classes of certificates and affirms all other outstanding ratings of SGCMS 2016-C5, a $587.1 million CMBS conduit transaction. The ratings actions follow a surveillance review of the transaction, which has exhibited a worsening in pool performance since KBRA's last ratings change in July 2021 including an increase in KBRA's estimated losses from four K-LOCs (15.3% of the pool balance).
As of the June 2024 remittance period, there are three specially serviced assets (6.6% of the pool balance), including one REO asset (1.8%), and one loan that is 90+ days delinquent (1.3%).
KBRA identified 11 K-LOCs (33.1%), four of which (15.3%) have estimated losses. This includes:
Four of the top 10 loans (20.2%):
- The Mall at Rockingham Park (largest, 6.8%)
- 85 Bluxome (2nd largest, 6.5%, 26.8% estimated loss severity)
- East Lake Tower Corporate Center (9th largest, 3.5%, 74.8%)
- TEK Park (10th largest, 3.5%, 25.2%)
One other K-LOC has an estimated loss:
- Regent Portfolio (1.8%, 59.4%)
The remaining six loans do not have estimated losses and represent 11.1% of the pool balance.
Excluding the K-LOCs with estimated losses, the transaction’s weighted average WA KLTV is 94.0%, compared to 101.3% at KBRA's last ratings change and 99.7% at securitization. The KDSC is 1.59x, in line with 1.60x at KBRA's last ratings change and compared to 1.75x at securitization.
Details concerning the ratings changes are as follows:
- Class D to BB- (sf) from BBB- (sf)
- Class E to CCC (sf) from B (sf)
- Class F to CCC- (sf) from CCC (sf)
- Class X-D to BB- (sf) from BBB- (sf)
- Class X-E to CCC (sf) from B (sf)
- Class X-F to CCC- (sf) from CCC (sf)
To access rating and relevant documents, click here.
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