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KBRA Downgrades All Ratings for River Green Finance 2020 DAC

13 Jun 2024   |   London

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KBRA downgrades the ratings of four classes of River Green Finance 2020 DAC, a CMBS single borrower transaction. The rating actions follow a surveillance review of the transaction. The ratings of the downgraded class certificates are simultaneously removed from Watch Downgrade (DN) where they were placed on 15 December 2023 and 15 March 2024, respectively. The downgrades are the result of the loan’s status with the special servicer and the deteriorating credit strength of the largest tenant, Atos (83.0% of GRI).

The loan is collateralised by River Ouest, a seven-story office building and an adjacent two-story service/amenity building located in the commune of Bezons, France, within the Val-d’Oise department and approximately five kilometres north of La Défense and 18 kilometres northwest of central Paris. As of the April 2024 IPD, the total outstanding debt balance was €186.9 million (€2,907 per sqm), down 4.8% from issuance (€196.2 million) due to scheduled amortisation.

The loan transferred to special servicing on 15 January 2024 after the borrower did not exercise the loan’s second extension option and did not pay all amounts due. As of the April 2024 IPD the loan continued to perform and all interest and principal due was paid in full. The borrower, servicer, and special servicer have entered into a standstill agreement through 1 July 2024 with the aim of a consensual loan restructuring.

KBRA analysed the cash flow for the property utilising information from the trustee and servicer to determine KNCF. The analysis produced a KNCF of €14.5 million and a KBRA value of €166.4 million (€2,589 per sqm). The resulting in-trust KLTV is 112.3%, up from 83.8% at last review and 75.9% at securitisation. KBRA identified the loan as a K-LOC and maintained the loan’s KPO of Underperform due to its status with the special servicer and Atos’s financial issues.

Details for the classes with rating changes are as follows:

  • Class A to AA (sf) from AAA (sf) DN
  • Class B to A- (sf) from AA (sf) DN
  • Class C to BBB- (sf) from A (sf) DN
  • Class D to B (sf) from BBB (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.

This credit rating is endorsed by Kroll Bond Rating Agency Europe Limited for use in the European Union. Information on a credit rating’s endorsement status is available on its rating page at KBRA.com.

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.

There are certain issuers, entities or transactions rated by KBRA Europe or KBRA UK that may be or have relationships with Shareholders and/or Shareholder-Related Companies, as that term is defined in KBRA’s Shareholder and Shareholder Related Companies for KBRA Europe and KBRA UK Policy and Procedure. Relevant disclosure information may be found here.

About KBRA UK

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. Kroll Bond Rating Agency UK is located at 1 Connaught Place, 2nd Floor London, England.

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