KBRA Downgrades Two Ratings and Affirms All Other Ratings for TRTX 2021-FL4
27 Mar 2025 | New York
KBRA downgrades the ratings of two notes and affirms the remaining outstanding ratings for TRTX 2021-FL4, a CRE CLO transaction. The downgrades reflect the transaction’s increase in REO assets and K-LOCs with estimated losses. In addition, the transaction remains undercollateralized following the sale by the trust to a third party of the 1525 Wilson asset at a loss.
At the time of this review, the total collateral balance is $849.3 million, which is comprised of 18 first mortgage loans secured by 77 properties. During the transaction’s reinvestment period, the issuer had the ability to acquire previously unidentified whole loans and senior participations with principal proceeds from the mortgage assets, provided such assets satisfied the reinvestment criteria and eligibility criteria. The reinvestment period ended as expected in March 2023.
As of the March 2025 remittance period, there are three specially serviced assets (18.1%), all of which are REO. KBRA identified six K-LOCs (44.7%), including the REO assets. These include five top 10 loans (41.2%):
- Towson Town (largest, 13.2% of the pool)
- 575 Fifth Avenue (2nd largest, 9.8%, 16.7% estimated loss severity)
- Tower Plaza (6th largest, 7.1%, 85.8%)
- San Antonio 2-Pack (7th largest, 6.5%, 22.8%)
- Upshore Chapter (10th largest, 4.6%, 20.6%)
The transaction’s WA KLTV is 147.2%, compared to 139.6% at last review and 127.4% at securitization. The KDSC at Index Cap is 0.91x, compared to 0.96x at last review and 1.02x at closing. The overcollateralization and interest coverage tests have each been satisfied during each distribution date since issuance.
At securitization, 16 loans (91.2% of the issuance loan pool) had related companion participations representing unfunded future advance obligations, with an aggregate unfunded amount of $137.9 million. In total, there are currently seven loans (29.8% of the current loan pool), with unfunded future advance obligations with an aggregate of $41.0 million unfunded as of February 2025.
Details concerning the classes with ratings changes are as follows:
- Class F to B (sf) from BB- (sf)
- Class G to CCC (sf) from B- (sf)
To access ratings and relevant documents, click here.
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