KBRA Downgrades Four Ratings and Affirms All Other Outstanding Ratings for SGCMS 2016-C5
3 Jul 2025 | New York
KBRA downgrades the ratings of four classes of certificates and affirms all other outstanding ratings of SGCMS 2016-C5, a $542.5 million CMBS conduit transaction. The ratings actions follow a surveillance review of the transaction, which has exhibited a worsening in pool performance since KBRA's last ratings change in July 2024. The rating actions also reflect KBRA's estimated losses for eight K-LOCs (22.8% of the pool balance) and the resulting loss adjusted C/E levels.
As of the June 2025 remittance period, there are five specially serviced assets (14.6% of the pool balance), of which one (1.8%) is REO, one (1.3%) is 90+ days delinquent, one (4.1%) is 60 days delinquent, and one (3.7%) is 30 days delinquent. KBRA identified 16 K-LOCs (46.3%), including the specially serviced assets. The K-LOCs are depicted in the table below:
Excluding the K-LOCs with estimated losses, the transaction’s weighted average WA KLTV is 92.8%, compared to 94.0% at KBRA's last ratings change in July 2024 and 99.7% at securitization. The KDSC is 1.57x, a decline from 1.59x at KBRA's last ratings change and 1.75x at securitization.
Details concerning the classes with rating changes are as follows:
- Class D to B (sf) from BB- (sf)
- Class F to CC (sf) from CCC- (sf)
- Class X-D to B (sf) from BB- (sf)
- Class X-F to CC (sf) from CCC- (sf)
To access ratings and relevant documents, click here.
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