KBRA Downgrades Four Ratings and Affirms All Other Ratings for BACM 2016-UBS10
16 Apr 2025 | New York
KBRA downgrades four ratings and affirms all other ratings for BACM 2016-UBS10, a $565.9 million CMBS conduit transaction. The rating actions follow a surveillance review of the transaction, which has exhibited a worsening in pool performance since securitization, including an increase in estimated losses since KBRA's last ratings change in April 2023. KBRA’s estimated losses for five K-LOCs (25.8%) would result in loss-adjusted C/E levels that are meaningfully lower than current levels.
As of the March 2025 remittance period, there are three specially serviced assets (14.4% of the pool balance), one (9.1%) of which is in foreclosure and one (3.5%) of which is 30 days delinquent. KBRA identified 11 K-LOCs (37.9%), of which five (25.8%) have estimated losses. These include five of the top ten loans (29.6%):
- Belk Headquarters (2nd largest, 9.1% of the pool balance, 49.4% estimated loss severity)
- 525 Seventh Avenue (3rd largest, 7.2%, 13.9%)
- 2100 Ross (6th largest, 5.6%)
- Grove City Premium Outlets (7th largest, 4.2%, 17.4%)
- Princeton Pike Corporate Center (9th largest, 3.5%, 36.8%)
One other K-LOC has an estimated loss:
- Burbank Retail Center (1.8%, 25.8%)
The remaining five K-LOCs do not have estimated losses and represent 6.5% of the pool balance.
Excluding the K-LOCs with estimated losses, the transaction’s WA KLTV is 97.0%, compared to 101.2% at KBRA’s last ratings change and 101.0% at issuance. The KDSC is 1.46x, compared to 1.47x at KBRA’s last ratings change and 1.56x 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)
To access ratings and relevant documents, click here.
Click here to view the report.