KBRA Downgrades Four Ratings and Affirms All Other Ratings for LCCM 2017-LC26
8 Apr 2026 | New York
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.
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.