KBRA Affirms All Ratings for Atom Mortgage Securities DAC
17 Sep 2024 | London
KBRA UK (KBRA) affirms all of its outstanding ratings for Atom Mortgage Securities DAC, a CMBS single-borrower transaction. The affirmations follow a surveillance review of the transaction, which has exhibited a decrease in the KLTV from the prior review and an increase since securitisation. However, the magnitude of the change does not warrant rating changes at this time.
The transaction collateral at closing consisted of a £391.2 million limited recourse, first lien mortgage loan secured by the borrowers’ freehold interests in four office (92.2% of loan balance) and two industrial (7.8%) assets located in the United Kingdom (UK). Since the transaction closing date in September 2021, the loan has been paid down by £83.4 million due to the sale of the two industrial properties and one of the office properties. As of the July 2024 IPD, the senior outstanding debt balance was £307.8 million. There is also £77.2 million of outstanding mezzanine debt that is held outside of the trust.
KBRA utilised information obtained from the trustee and servicer to analyse the remaining loan collateral. The analysis produced a KNCF of £21.5 million and KBRA value of £340.0 million (£350 per sf). The resulting in-trust KLTV is 90.5%, down from 95.2% at last review and up from 88.5% at securitisation. KBRA maintains a KPO of Underperform on the loan due to elevated vacancy risk related to the lease maturity schedule prior to the loan’s fully extended maturity date in July 2026.
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