KBRA Downgrades Four Ratings and Affirms All Other Ratings for MSBAM 2017-C34
4 Oct 2024 | New York
KBRA downgrades the ratings of four classes of certificates and affirms all other outstanding ratings for MSBAM 2017-C34, a $979.4 million CMBS conduit transaction. The rating actions follow a surveillance review of the transaction, which has exhibited an increase in estimated losses from four K-LOCs (15.1%), two of which are among the top 10 loans. The rating actions also reflect the transaction’s deleveraging from loan payoffs, amortization and defeasance.
As of the September 2024 remittance period, there are two specially serviced assets (7.1% of the pool balance), including one that is in foreclosure (2.6%). KBRA identified eight K-LOCs (25.0%), including the specially serviced assets. The K-LOCs include three top 10 loans (16.1%):
- 237 Park Avenue (2nd largest, 7.2% of the pool)
- Ocean Park Plaza (4th largest, 4.5%, 30.2% estimated loss severity)
- OKC Outlets (5th largest, 4.5%, 12.5%)
Two other K-LOCs (6.2%) have estimated losses:
- Corporate Woods (3.6%, 14.8%)
- 444 West Ocean (2.6%, 18.6%)
The remaining three K-LOCs do not have estimated losses and represent 2.7% of the pool balance.
Excluding the K-LOCs with estimated losses, the transaction’s WA KLTV is 96.2%, compared to 102.7% at last review and 99.9% at issuance. The KDSC is 1.85x, up slightly from 1.79x at last review but down slightly from 1.87x at issuance.
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)
- Class X-E to B (sf) from BB- (sf)
- Class X-F to CCC (sf) from B- (sf)
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