KBRA Downgrades Six Ratings and Affirms All Other Ratings for UBS 2018-C12
28 Jun 2024 | New York
KBRA downgrades the ratings of five classes of certificates and the rating of one reference class of certificates, and affirms all other outstanding ratings of UBS 2018-C12, a $679.4 million CMBS conduit transaction. The rating actions follow a surveillance review of the transaction, which has exhibited a worsening in pool performance since KBRA's last ratings change in August 2021, including an increase in the number of K-LOCs and specially serviced loans. The rating actions also reflect an increase in realized losses since last ratings change, as well as KBRA’s estimated losses for three K-LOCs (4.4%) and the resulting loss adjusted C/E levels.
As of the June 2024 remittance period, there are five specially serviced assets (12.6% of the pool balance), of which two(3.4%) are REO and two (2.3%) are delinquent. KBRA identified 15 K-LOCs (31.2%), including the specially serviced assets. These include five top 10 assets (20.2%):
- Riverfront Plaza (2nd largest, 6.8% of the pool balance)
- Aspect RHG Hotel Portfolio (4th largest, 4.7% of the pool balance)
- 20 Times Square (6th largest, 3.4%)
- Copeland Tower & Stadium Place (8th largest, 2.8%, REO, 60.8% estimated loss severity)
- Smithridge Plaza (9th largest, 2.6%)
Two other K-LOCs have an estimated loss:
- Holiday Inn Houston SW - Sugar Land Area (1.0% of the pool balance, 88.8% estimated loss severity)
- 24 Hour Fitness - Cedar Hill (0.6%, REO, 62.2%)
The remaining seven K-LOCs do not have estimated losses and represent 8.0% of the pool balance.
Excluding K-LOCs with estimated losses, the transaction’s WA KLTV is 101.0%, compared to 103.9% at KBRA’s last ratings change and 97.3% at securitization. The KDSC is 1.70x, compared to 1.71x at KBRA’s last ratings change and 1.93x at securitization.
Details concerning the classes with rating changes are as follows:
- Class D to BBB- (sf) from BBB (sf)
- Class D-RR to B (sf) from BB- (sf)
- Class E-RR to CCC+ (sf) from B (sf)
- Class F-RR to CCC (sf) from B- (sf)
- Class G-RR to CC (sf ) from CCC (sf)
- Class X-D to BBB- (sf) from BBB (sf)
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