KBRA Affirms All Ratings for BBCMS 2016-ETC

KBRA affirms all of its outstanding ratings for BBCMS 2016-ETC, a $512.5 million CMBS SASB transaction. The affirmations follow a surveillance review of the transaction, which remains consistent with last review. However, credit metrics have deteriorated since securitization, primarily due to an increase in KBRA’s capitalization rate. However, the magnitude of the change in KBRA value and KLTV does not warrant rating changes at this time.

The transaction collateral consists of a 1.3 million sf portion of Easton Town Center, a 1.8 million sf super-regional open air retail center with 204,672 sf of second floor office space located in Columbus, Ohio, approximately 10 miles north of the city’s CBD. The trust collateral consists of two senior A-notes totaling $150.0 million and two subordinate B-notes totaling $362.5 million, together representing a $512.5 million portion of a $700.0 million ($537 per sf) interest-only, first lien mortgage loan secured by the borrower’s fee simple interest. The whole mortgage loan is represented by six pari passu A-notes totaling $337.5 million and the two subordinate B-notes. The sponsors of the borrower are Bath & Body Works Inc. and certain principals of The Georgetown Company.

KBRA analyzed the cash flow for the property utilizing information from the trustee and servicer to determine KNCF. The analysis produced a KNCF of $49.2 million and a KBRA value of $597.0 million ($458 per sf). The resulting KLTV is 117.3%, in line with last review but up from 99.6% at securitization. KBRA maintains a KPO of Perform for the loan.

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