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KBRA Downgrades Three Ratings and Affirms All Other Ratings for CD 2018-CD7

13 Jun 2025   |   New York

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KBRA downgrades the ratings of three classes of certificates and affirms all other outstanding ratings for CD 2018-CD7, a $678.0 million CMBS conduit transaction. The ratings actions follow a surveillance review of the transaction, which has exhibited a worsening in pool performance compared to KBRA's last ratings change in June 2024. The rating actions also reflect KBRA's estimated losses for four K-LOCs (18.6%) and the resulting loss adjusted C/E levels.

As of the May 2025 remittance period, there are three specially serviced assets (13.6%), including one (4.7%) that is in foreclosure and one (1.4%) that is 30+ days delinquent. KBRA identified six K-LOCs (20.9%), including the specially serviced assets. The K-LOCs are depicted in the table below:

Loss Given Default (000s) Loss Severity 2 Bank of America Center OF $50,500 7.5% Y C N Specially Serviced 08/30/2023 $11,856 23.5% 5 Zenith Ridge OF $34,072 5.0% N C N Occupancy 06/12/2025 $8,436 24.8% 8 NoLIta Multifamily Portfolio MF $32,000 4.7% Y 90+ N Foreclosure 05/22/2020 $6,882 21.5% 22 Rohnert Park Center RT $9,780 1.4% Y 30+ Y Delinquent 05/06/2020 $1,215 12.4% 26 Kinston Portfolio LO $8,884 1.3% N C Y Occupancy 10/25/2018 - - 32 Hampton Inn Port Charlotte LO $6,491 1.0% N C N Property Damage 09/08/2023 - - Total K-LOCs $141,728 20.9% $28,388 1. K-LOC Date is the date when the most recent K-LOC was initially determined. 2. Loss Given Default assumes a 100% probability of default (PD). KBRA may determine a lower PD when estimating losses to a transaction. KBRA Estimated 2 K-LOCs Prosp. ID Loan Name Prop Type Current In-Trust Balance (000s) % of Deal Balance SS Loan Status Mod (Y/N) Primary K-LOC Reason K-LOC Date 1
Source: KBRA

Excluding the K-LOCs with estimated losses, the transaction’s WA KLTV is 94.3%, compared to 97.2% at KBRA's last ratings change in June 2024 and 96.2% at securitization. The KDSC is 1.69x, which is in line with KBRA's last rating change and down from 1.77x at securitization.

Details concerning the classes with rating changes are as follows:

  • Class E-RR to BBB- (sf) from BBB (sf)
  • Class F-RR to B- (sf) from BB- (sf)
  • Class G-RR to CCC (sf) from B- (sf)

To access ratings and relevant documents, click here.

Click here to view the report.

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Methodologies

Disclosures

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 www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA 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 (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1009882

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