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KBRA Downgrades Two Ratings, Affirms Twelve Ratings, and Removes Seven Ratings from Watch Downgrade for MSC 2016-UBS12

10 Dec 2025   |   New York

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KBRA downgrades the ratings of two classes of certificates and affirms all other outstanding ratings of MSC 2016-UBS12, a $667.1 million CMBS conduit transaction. Simultaneously, KBRA removes seven classes from Watch Downgrade (DN), where they were placed on September 24, 2025. The ratings actions follow a surveillance review of the transaction, which has exhibited an increase in interest shortfalls since the last ratings change in December 2024. The shortfalls are primarily due to the 681 Fifth Avenue loan (largest, 12.0% of the pool balance) being deemed non-recoverable in July 2025. In addition, KBRA’s estimated losses for four K- LOCs (39.4%) have increased. The downgrades also reflect the possibility that interest shortfalls may affect higher tranches of the capital structure, as the servicer continues to work through the resolution of specially serviced assets.

As of the November 2025 remittance report, there are 12 specially serviced assets (20.2%), including one REO asset (2.3%), one loan in foreclosure (12.0%), and 10 current loans (5.9%). KBRA identified seventeen K-LOCs (50.5%) including the specially serviced loans. Ten (5.9%) of the K-LOCs have the same sponsor and transferred to the special servicer for non-monetary default as a result of court appointed receivership. The remaining seven K-LOCs (44.6%) are depicted in the table below:

K-LOCs Loss Given Default (000s) Loss Severity 01A1 681 Fifth Avenue MU 80,000 12.0% Y FCL Y Foreclosure Sep-20 $53,905 67.4% 02A1 191 Peachtree OF 80,000 12.0% N C N Occupancy Dec-24 $4,494 5.6% 03A1 Wolfchase Galleria RT 65,822 9.9% N C Y Modification Apr-20 $29,230 44.4% 07A3 101 Hudson Street OF 37,250 5.6% N C N Occupancy Nov-24 $4,341 11.7% 15 Arkansas Multifamily Portfolio MF 15,500 2.3% Y REO N REO Aug-20 - - 18 Hampton Inn & Suites - Hillsboro LO 12,602 1.9% N C Y Occupancy Apr-20 - - 26 Hamden Retail Center RT 6,818 1.0% N C N DSCR Feb-24 - - Remaining K-LOCs (10) MF 39,209 5.8% Y C N SS Sep-24 - - Total K-LOCs $337,201 50.5% $91,970 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 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 92.7%, compared to 98.7% at KBRA's last ratings change in December 2024 and 98.8% at KBRA's previous ratings change in December 2023. The KDSC is 1.53x, compared to 1.62x at KBRA's last ratings change and 1.68x at KBRA's previous ratings change.

Details concerning the classes with ratings changes are as following:

  • Class B to BBB (sf) from A (sf) DN
  • Class C to BB (sf) from BBB- (sf) DN

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.

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