KBRA Downgrades Two Ratings and Affirms All Other Outstanding Ratings for UBS 2017-C3

KBRA downgrades the ratings of two classes of certificates and affirms all other outstanding ratings of UBS 2017-C3, a $604.1 million CMBS conduit transaction. The rating actions follow a surveillance review of the transaction, which has experienced increases in specially serviced assets and estimated losses since last review. However, the transaction, particularly among higher rated classes, has benefited from deleveraging from loan payoffs, amortization, and defeasances.

As of the June 2024 remittance period, there are five specially serviced assets (17.4% of the pool balance), of which one (4.7%) is REO. KBRA identified nine K-LOCs (26.8%), including the specially serviced assets. The K-LOCs include:

Four of the top 10 loans (20.6%), of which three (15.9%) have estimated losses:

One other K-LOC has an estimated loss:

The remaining four K-LOCs, representing 4.0% of the pool balance, do not have estimated losses.

Excluding K-LOCs with estimated losses, the transaction’s WA KLTV is 89.6%, compared to 103.4% at last review and 90.7% at securitization. The KDSC is 1.81x, compared to 1.85x at last review and 2.17x at securitization.

Details concerning the classes with rating changes are as follows:

To access rating and relevant documents, click here.

Click here to view the report.

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