Press Release|CMBS

KBRA Downgrades All Ratings for JPMCC 2021-BOLT

16 Aug 2024   |   New York

Contacts

KBRA downgrades all outstanding ratings for JPMCC 2021-BOLT, a CMBS single-borrower transaction. The outstanding ratings are simultaneously removed from Watch Downgrade (DN) where they were placed on May 21, 2024. The ratings actions follow a surveillance review of the transaction and are driven by the collateral’s continued decline in financial performance, weaker demand for office space, and the potential for interest shortfalls to reach higher in the capital structure as the special servicer works to resolve the loan. The loan was transferred to the special servicer in June 2024 ahead of its maturity default in August 2024.

The transaction collateral is a non-recourse, first lien mortgage loan secured by the borrower’s fee simple interest in Aspiria, formerly known as the Sprint Corporate Headquarters; a 20-building suburban office park containing 3,721,308 sf and situated on 190.4 acres in Overland Park, Kansas. The floating rate loan has an outstanding balance of $232.5 million ($62 per sf) as of July 2024. The loan, which had an initial maturity date of August 2023, was modified, resulting in a maturity date extension to August 2024 and an adjustment in payment terms which has resulted in ongoing interest shortfalls to classes C and D and the VRR interest. The loan failed to payoff by the modified maturity date, but remains current in payment based on the previously modified debt service.

The review utilized information obtained from the trustee and servicer to analyze the loan collateral. Due to the decline in occupancy following the space reduction by T-Mobile, KBRA performed a stabilized analysis to derive KNCF and KBRA Value. The analysis assumed a stabilized vacancy rate of 69.2%, in line with KBRA’s estimate at last review. The analysis produced a stabilized KNCF of $11.5 million, down 5.4% from last review and 13.4% from KNCF at closing ($13.2 million). The resulting in-trust KLTV is 238.7%, compared to 205.5% at last review and 139.7% at securitization. KBRA’s valuation takes into account the disposition value of the asset, deterioration in the office sector and weakening demand, coupled with a challenging commercial real estate financing landscape for the property type. In addition, KBRA maintains the loan’s K-LOC designation and KPO of Underperform due to the loan’s current status with the special servicer and the decline in collateral occupancy and performance since closing.

Details concerning the classes with rating changes are as follows:

Class A to A (sf) from AAA (sf) DN

Class B to CCC (sf) from BB- (sf) DN

Class C to CC (sf) from CCC (sf) DN

Class X to A (sf) from AAA (sf) DN

To access rating 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: 1005537

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