KBRA Downgrades Eight Ratings and Affirms All Other Ratings for CD 2017-CD3
10 Jan 2025 | New York
KBRA downgrades the ratings of eight classes of certificates and affirms all other outstanding ratings of CD 2017-CD3, a $1.2 billion CMBS conduit transaction. The rating actions follow a surveillance review of the transaction, which has exhibited an increase in KBRA's estimated losses since the last ratings change in January 2024.
As of the December 2024 remittance period, there are five specially serviced assets (17.9%), of which four are in foreclosure (9.6%) and one is REO (8.3%). KBRA identified 18 K-LOCs (48.1%), including the specially serviced assets. Of the K-LOCs, ten (38.7%) have estimated losses. These include:
Four of the top 10 loans (26.5%):
- 229 West 43rd Street Retail Condo (largest, 8.3% of the pool balance, 85.4% loss severity)
- 1384 Broadway (2nd largest, 7.3%, 17.6%)
- 111 Livingston Street (5th largest, 5.6%, 24.5%)
- Prudential Plaza (7th largest, 5.4%, 9.0%)
Six additional loans (12.2%) have estimated losses:
- 16 E 40th Street (2.6%, 60.0%)
- 681 Fifth Avenue (2.4%, 49.7%)
- 166 Geary Street (2.4%, 62.0%)
- Cherry Creek Place I & II (2.3%, 63.6%)
- 8 Times Square & 163 Broadway (2.1%, 13.2%)
- 5042 Technology Parkway (0.5%, 2.8%)
The remaining 8 K-LOCs do not have estimated losses and represent 9.4% of the pool balance
Excluding the K-LOCs with estimated losses, the transaction's WA KLTV is 90.1% compared to 99.4% at last review and 100.3% at securitization. The KDSC is 1.62x, compared to 1.67x at last review and 1.81x at securitization.
Details concerning the rating change are as follows:
- Class B to A- (sf) from AA (sf)
- Class C to B- (sf) from BBB (sf)
- Class D to CC (sf) from CCC (sf)
- Class E to C (sf) from CC (sf)
- Class X-D to CC (sf) from CCC(sf)
- Class V1B to A- (sf) from AA (sf)
- Class V1C to B- (sf) from BBB (sf)
- Class V1D to CC (sf) from CCC (sf)
To access ratings and relevant documents, click here.
Click here to view the report.