KBRA Affirms All Ratings for UBS 2017-C2
9 May 2024 | New York
KBRA affirms all of its outstanding ratings for UBS 2017-C2, a $679.6 million CMBS conduit transaction. The affirmations follow a surveillance review of the transaction, which has benefitted from deleveraging from loan pay offs and amortization (24.4% of the initial pool balance) as well as defeasance (17.5%). Offsetting the deleveraging, pool performance has shown signs of worsening based on an increase in the number of specially serviced loans and loans identified as K-LOCs since closing.
As of the April 2024 remittance period, there are two specially serviced assets (5.4%), one of which (0.8%) is in foreclosure. KBRA identified nine K-LOCs (19.4%), including the specially serviced assets. This includes three top 10 loan (14.3%):
- 85 Broad Street (4th largest, 5.0% of the pool balance)
- 245 Park Avenue (5th largest, 4.7%)
- AHIP Northeast Portfolio III (6th largest, 4.6%, 27.9% estimated loss severity)
One other K-LOC has an estimated loss:
- Comfort Inn Westport (1.1% of the pool balance, 7.2% estimated loss severity)
The remaining five K-LOCs do not have estimated losses and represent 4.1% of the pool balance.
Excluding the K-LOCs with estimated losses, the transaction’s WA KLTV is 91.2%, compared to 97.3% at last review and 91.0% at securitization. The KDSC is 1.93x, compared to 1.92x at last review and 2.18x at securitization.
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