KBRA Affirms All Ratings for LCCM 2017-LC26
11 Apr 2024 | New York
KBRA affirms all of its outstanding ratings for LCCM 2017-LC26, a $469.1 million CMBS conduit transaction. The affirmations follow a surveillance review of the transaction. Since KBRA's last ratings change in June 2021, C/E levels have improved due to amortization and deleveraging and there has been a decrease in specially serviced assets in the pool. However, the pool continues to have an elevated exposure to K-LOCs and has exhibited a declining trend in pool credit metrics such as WA KLTV and KDSC.
As of the March 2024 remittance period, there are two specially serviced loans (4.2% of the pool balance) which are in foreclosure. KBRA identified four K-LOCs (14.4%), including the specially serviced assets. These include three top 10 loans (13.5%):
- Regions Center and Bank Tower (4th largest, 7.3% of the pool balance)
- Hilton Garden Inn Corvallis (6th largest, 3.4%)
- Wilmington Hotel Portfolio (9th largest, 2.8%)
One K-LOC has an estimated loss:
- 1867-1871 Amsterdam Avenue (0.9% of the pool balance, 19.4% estimated loss severity)
Excluding the K-LOC with an estimated loss, the transaction's WA KLTV is 108.3%, compared to 104.1% at KBRA's last ratings change and 100.5% at securitization. The KDSC is 1.35x, compared to 1.61x at KBRA's last ratings change and 1.72x at securitization.
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