Press Release|CMBS

KBRA Upgrades Three Ratings and Affirms All Other Ratings for MHC 2021-MHC2

24 May 2024   |   New York


Kroll Bond Rating Agency (KBRA) upgrades the ratings of Classes B, C, and D and affirms all other outstanding ratings of MHC 2021-MHC2, a $230.9 CMBS single-borrower transaction. The ratings actions follow a surveillance review of the transaction, which has experienced meaningful deleveraging from principal paydown following property releases since KBRA’s last review. Although there has been a slight worsening in some credit metrics, the magnitude of the changes is not enough to warrant negative rating adjustments.

The collateral at issuance for the transaction was the borrowers’ fee simple interests in 39 manufactured housing communities (MHC) totaling 7,417 pads and 15 RV sites located across eight states. Since last review, 14 properties have been released, leaving 25 MHCs totaling 4,508 pads and six RV sites located across six states. The floating-rate loan is structured with an initial two-year term with three one-year extension options. Along with the first extension option executed effective May 9, 2023, the interest rate benchmark was converted to one-month term SOFR. The second extension option was executed May 9, 2024, and a new interest rate cap agreement was obtained with a strike rate of 4.34%. The loan requires monthly interest-only payments based on one-month SOFR plus the initial spread of 1.95% and a 0.11% adjusted SOFR replacement spread.

KBRA analyzed the cash flow for the properties utilizing information from the trustee and servicer to determine KNCF. The analysis produced a KNCF of $13.7 million and a KBRA value of $177.3 million ($39,320 per pad), representing a 7.4% decrease from securitization, net of property releases. The resulting in-trust KLTV is 130.3% compared to 140.3% at last review and 131.2% at securitization. KBRA maintains the loan’s KPO of Perform.

Details concerning the classes with ratings changes are as follows:

  • Class B to AAA (sf) from AA+ (sf)
  • Class C to AA (sf) from AA- (sf)
  • Class D to A (sf) from A- (sf)

To access rating and relevant documents, click here.

Click here to view the report.

Related Publication



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

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency 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 by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

Doc ID: 1004451

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