KBRA Upgrades Two Ratings and Affirms All Other Ratings for LMNT 2021-FL1
13 Jun 2024 | New York
KBRA upgrades the ratings of two notes and affirms the remaining outstanding ratings for LMNT 2021-FL1, a CRE CLO transaction with the ability to reinvest principal proceeds for 30 months. The upgrades reflect the transaction’s increased note subordination levels, primarily the result of loan pay-offs and principal curtailments. Since the end of the reinvestment period in December 2023, seven loans totaling $140.7 million have paid off in full and three loans (5.5% of current pool balance) have received principal curtailments. This resulted in the notes paying down by $152.0 million (15.2% of the securitization note balance).
At the time of this review, the total collateral balance is $850.2 million, which is comprised of 54 first mortgage loans secured by 72 properties. During the reinvestment period, the issuer could acquire previously unidentified whole loans and senior participations that satisfied the eligibility criteria. The reinvestment period ended in December 2023, as expected. As of the May 2024 remittance period, there are no delinquent or defaulted loans and no loans have been identified as K-LOCs.
The transaction’s WA KLTV is 132.9%, compared to 134.9% at last review and 124.3% at securitization. The KDSC at Index Cap is 1.07x, compared to 1.06x at last review and 1.03x at securitization. The overcollateralization and interest coverage tests have each been satisfied during each distribution date since issuance.
At securitization, 34 loans (66.2% of issuance balance) had related companion participations representing unfunded future advance obligations, with an aggregate unfunded amount of $41.8 million. In total, there are currently 46 loans (92.3% of current balance), with unfunded future advance obligations with an aggregate of $49.4 million unfunded.
Details concerning the classes with ratings changes are as follows:
- Class B to AA (sf) from AA- (sf)
- Class C to A (sf) from A- (sf)
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