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KBRA Downgrades Four Ratings and Affirms All Other Ratings for LCCM 2017-LC26

8 Apr 2026   |   New York

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KBRA downgrades the ratings of four classes of certificates and affirms all other outstanding ratings for LCCM 2017-LC26, a $450.2 million CMBS conduit transaction. The rating actions follow a surveillance review of the transaction. The downgrades are based on an increase in KBRA’s estimated losses and the resulting loss-adjusted C/E levels. If realized, KBRA’s estimated losses would reduce the principal balances of classes F and G to zero and reduce class E by more than 30.0%. At the top of the capital structure, the classes benefit from defeasance, which accounts for 29.8% of the aggregate certificate balance.

As of the March 2026 remittance period, there are two specially serviced assets (10.7% of the pool balance). KBRA identified seven K-LOCs (35.9%), including the specially serviced assets. Of the K-LOCs, two (19.0%) have estimated losses. The largest estimated loss is from the Regions Center and Bank Tower asset (7.3%), which went through a foreclosure sale in March with a successful credit bid by the trust. The K-LOCs are depicted in the table below.

Loss Given Default (000s) Loss Severity 1 Marriott LAX LO $52,520 11.7% N C Y DSCR 01/23/2025 $13,989 26.6% 4 Peoples Center OF $44,031 9.8% N C N Maturity 01/26/2026 - - 6 Regions Center and Bank Tower OF $32,940 7.3% Y FCL N Foreclosure 09/10/2022 $25,645 77.9% 9 Hilton Garden Inn Corvallis LO $15,063 3.4% Y FCL N Foreclosure 04/09/2020 - - 20 Telegraph Plaza Shopping Center RT $8,194 1.8% N C N Maturity 10/31/2025 - - 23 3295 River Exchange OF $7,595 1.7% N C N Maturity 04/10/2024 - - 36 San Angelo Plaza RT $1,476 0.3% N C N Maturity 03/28/2025 - - Total K-LOCs $161,818 35.9% $39,634 1. K-LOC Date is the date when the most recent K-LOC was initially determined. 2. Loss Given Default assumes a 100% probability of default (PD). KBRA may determine a lower PD when estimating losses to a transaction. KBRA Estimated 2 K-LOCs Prosp. ID Loan Name Prop Type Current In- Trust Balance (000s) % of Deal Balance SS Loan Status Mod (Y/N) Primary K-LOC Reason K-LOC Date 1
Source: KBRA

Details concerning the classes with ratings changes are as follows:

  • Class D to BB (sf) from BBB- (sf)
  • Class E to CCC (sf) from B- (sf)
  • Class F to CC (sf) from CCC (sf)
  • Class X-D (sf) to BB (sf) from BBB- (sf)

To access ratings and relevant documents, click here.

Click here to view the report.

Related Publication

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.

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.

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