Press Release|CMBS
View PDF

KBRA Removes One Rating from Watch Downgrade and Affirms All Outstanding Ratings for MSBAM 2025-C1

29 May 2026   |   New York

Contacts

KBRA affirms all of its outstanding ratings for MSBAM 2025-5C1, a $934.5 million CMBS conduit transaction. Simultaneously, KBRA removes its rating for the Class G-RR certificates from Watch Downgrade (DN), where it was placed on April 2, 2026, due to the Waterford Grove Apartments loan ($62.5 million, 6.7% of the pool balance) transferring to the special servicer for imminent monetary default. The affirmations follow a surveillance review of the transaction, which included reanalyzing property cash flows for the specially serviced Waterford Grove Apartments.

The Waterford Grove Apartments loan transferred to special servicing in February 2026 following the borrower’s failure to obtain a Housing Finance Corporate (HFC) tax exemption, which triggered a principal paydown requirement on the loan’s outstanding principal balance to satisfy DSC and debt yield thresholds pursuant to the terms of the loan agreement. According to the servicer, a potential modification is being negotiated with the borrower for the Waterford Grove Apartments loan. As of May 2026, the loan was current on payments and subject to cash management.

When reanalyzing property cash flows for Waterford Grove Apartments, KBRA assumed no economic benefit from the HFC tax exemption and that the property was subject to full unabated real estate taxes. KBRA also considered the likelihood of a partial principal prepayment for the loan, which would deleverage the asset and reduce any potential value deficit in the event of a future liquidation scenario. Any principal prepayments distributed to the first-pay certificates would be subject to yield maintenance premiums.

As of the May 2026 remittance period, the CMBS conduit transaction had 40 loans. KBRA identified the Waterford Grove Apartments loan as a K-LOC. No other loans are delinquent or specially serviced.

KBRA removes from Watch Downgrade and affirms the following rating:

  • Class G-RR to BB- (sf) from BB- (sf) DN

To access ratings and relevant documents, click here.

Related Publication

Methodologies

Disclosures

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), one of the major credit rating agencies (CRA), is a full-service CRA 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 (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1015142