KBRA Downgrades Six Ratings and Affirms All Other Ratings for CGCMT 2016-P3

KBRA downgrades the ratings of six classes of certificates and affirms all other outstanding ratings for CGCMT 2016-P3, a $635.1 million CMBS conduit transaction. Simultaneously, four classes have been removed from Watch Downgrade (DN), where they were placed on December 20, 2023. The rating actions follow a surveillance review of the transaction, which has exhibited a worsening in overall pool performance compared to KBRA's last review including a high concentration of assets that have been identified as K-LOCs (48.2%). The rating actions also reflect an increase in estimated losses since KBRA's last review.

As of the March 2024 remittance period, there is one specially serviced asset (7.9%). KBRA identified nine K-LOCs (48.2% of the pool balance). Of the K-LOCs, three have estimated losses (20.4%). The K-LOCs include:

Six of the top 10 loans (42.9%)

One other K-LOC has an estimated loss:

The remaining two K-LOCs do not have estimated losses and represent 2.1% of the pool balance.

Excluding the K-LOCs with estimated losses, the transaction’s WA KLTV is 109.7%, compared to 105.2% at KBRA's last ratings change and 100.0% at securitization. The KDSC is 1.48x, compared to 1.52x at KBRA's last ratings change and 1.70x at securitization.

Details concerning the classes with ratings changes are as follows:

To access rating and relevant documents, click here.

Click here to view the report.

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