KBRA Upgrades Five Ratings and Affirms Two Ratings for MHC 2021-MHC2

KBRA upgrades the ratings of Classes C, D, E, F and G and affirms all other outstanding ratings of MHC 2021-MHC2, a $164.3 CMBS single-borrower transaction. The rating actions follow a surveillance review of the transaction, which has experienced meaningful deleveraging from principal paydown following property releases since KBRA’s last review.

The collateral at issuance for the transaction was the borrowers’ fee simple interests in 39 manufactured housing communities (MHC) totaling 7,417 pads and 15 RV sites located across eight states. Since issuance, 19 properties have been released, including five properties since last review, leaving 20 MHCs totaling 3,680 pads and six RV sites located across six states. The floating-rate loan is structured with an initial two-year term with three one-year extension options. Along with the first extension option executed effective May 9, 2023, the interest rate benchmark was converted to one-month term SOFR. The third extension option was executed May 9, 2025, and a new interest rate cap agreement was obtained with a strike rate of 5.14%. The loan requires monthly interest-only payments based on one-month SOFR plus the WA component spread of 2.70% and a 0.11% adjusted SOFR replacement spread.

KBRA analyzed the cash flow for the properties utilizing information from the trustee and servicer to determine KNCF. The analysis produced a KNCF of $11.9 million and a KBRA value of $153.9 million ($41,817 per pad), representing a 5.6% increase from securitization, net of property releases. The resulting in-trust KLTV is 106.8% compared to 130.3% at last review and 131.2% at securitization. KBRA maintains the loan’s KPO of Perform.

Details concerning the classes with rating changes are as follows:

To access ratings and relevant documents, click here.

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