KBRA Downgrades Three Ratings and Affirms All Other Ratings for LSTAR 2017-5
22 Mar 2024 | New York
KBRA downgrades the ratings of three classes of certificates and affirms all other outstanding ratings of LSTAR 2017-5, a $514.4 million CRE multi-borrower transaction. The rating actions follow a surveillance review of the transaction, which has exhibited a worsening in credit metrics since last review, including an increase in the number of specially serviced loans, K-LOCs and KBRA's estimated losses. The transaction's credit enhancement has improved due to loan payoffs and amortization.
As of the March 2024 remittance period, two loans (16.0%) are specially serviced. KBRA identified four K-LOCs (21.6%), including the specially serviced loans. Of the K-LOCs, three (19.0%) have estimated losses. The K-LOCs include:
Two top 10 loans (16.7%), both of which have estimated losses:
- Charlotte Plaza (largest, 13.6% of pool balance, 42.6% estimated loss severity)
- Dowlen Town Center (10th largest, 3.1%, 17.4%)
The two remaining K-LOCs are 4.9% of the pool, one of which also has an estimated loss:
- Whitehorse Road (2.3%, 61.5% estimated loss severity)
Excluding K-LOCs with estimated losses, the transaction’s WA KLTV is 113.5%, compared to 126.4% at last review and 108.4% at securitization. The KDSC is 1.23x, compared to 1.30x at last review and 1.52x at securitization.
Details concerning the classes with ratings changes are as follows:
- Class D to BB- (sf) from BBB- (sf)
- Class E to CCC (sf) from B (sf)
- Class F to CC (sf) from CCC (sf)
To access rating and relevant documents, click here.
Click here to view the report.
Related Publication
Methodologies
- CMBS: U.S. CMBS Multi-Borrower Rating Methodology
- CMBS: U.S. CMBS Property Evaluation Methodology
- CMBS: Methodology for Rating Interest-Only Certificates in CMBS Transactions
- Structured Finance: Global Structured Finance Counterparty Methodology
- CMBS: U.S. CMBS Single Borrower & Large Loan Rating Methodology
- ESG Global Rating Methodology