Press Release|CMBS
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KBRA Downgrades All Ratings for BAMLL 2015-ASTR

2 Jul 2024   |   New York

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KBRA downgrades the ratings for all classes of BAMLL 2015-ASTR, a CMBS SASB transaction KBRA simultaneously removes the Watch Downgrade (DN) status for the Class A, X-A, and B certificates where the ratings were placed on May 21, 2024. The rating actions follow a surveillance review of the transaction and are driven by the high upcoming lease rollover which includes the property’s largest tenant, IBM Watson Group, a subsidiary of International Business Machines (IBM, 36.0% of total base rent). IBM is expected to vacate the entirety of its space by December 2024. In addition, KBRA considered the weakening of the subject property’s office submarket fundamentals.

The transaction collateral is a single, non-recourse, first lien mortgage loan secured by the borrower’s leasehold interest in a 385,831 sf, Class-A office building located in the Manhattan borough, New York City, New York. The loan has an outstanding principal balance of $273.5 million ($709 per sf) as of June 2024. The sponsors of the Borrower are Edward J. Minskoff Equities, Inc. and Edward J. Minskoff.

The review utilized information obtained from the trustee and servicer to analyze the loan collateral. As the property’s occupancy is expected to decrease with the departure of IBM, KBRA is utilizing a stabilized analysis to derive property value and KLTV. The analysis produced a stabilized KNCF of $17.8 million and a KBRA value of $224.4 million. The resulting in-trust KLTV is 121.9%, a change from 103.4% at KBRA’s last review and 89.1% at securitization. Due to upcoming lease rollover along with the deterioration in the office sector amid weakening demand, coupled with a challenging commercial real estate finance landscape caused by rising interest rates and uncertainty in valuations, KBRA has identified the loan as a K-LOC and maintains the loan’s KPO of Underperform

Details for the classes with ratings changes are as follows:

  • Class A to AA- (sf) from AAA (sf)
  • Class B to A- (sf) from AA- (sf)
  • Class X-A to AA- (sf) from AAA (sf)

To access rating and relevant documents, click here.

Click here to view the report.

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Methodologies

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

Doc ID: 1004987

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