KBRA Downgrades All Ratings for River Green Finance 2020 DAC
7 Jul 2025 | London
KBRA UK (KBRA) downgrades the ratings on all classes of River Green Finance 2020 DAC, a CMBS single borrower transaction. The rating actions follow our June review of the transaction and were precipitated by the most-recent valuation for the collateral property, which was disclosed in the regulatory information service (RIS) notice dated 27 June 2025. The downgrades are driven by the latest valuer opinion which indicates a significant market value decline since the last market appraisal in 2023. In addition, the appraiser’s negative view of the collateral property’s location, weak demand for office space in the submarket, and poor outlook for re-leasing any future vacant space in the building resulted in a meaningful decrease in KNCF and KBRA value. The appraiser also indicated that market rents in the submarket have declined significantly since the prior valuation.
The appraised value as of 31 March 2025 is €139.1 million, which represents a reduction in value of 54.7% from €307 million in January 2023. Consequently, the Special Servicer has determined that an appraisal reduction has occurred in the sum of €55.8 million and the appraisal reduction factor is 69.2%. The liquidity facility commitment will reduce by the appraisal reduction factor to €7.0 million from €10.1 million previously and will continue to cover potential interest shortfalls on classes A to C. KBRA calculates approximately 1.5 years of interest coverage on the covered notes. The revised market value of €139.1 million is insufficient to cover the full amount of outstanding note balances. If the borrower defaults and the collateral property is liquidated, there could be a total principal loss to Class D and a partial loss to Class C (of approximately €7.0 million).
Tenant rollover risk for the property’s two tenants, Atos and EMC2 (Dell Technologies), continues to be an important consideration in KBRA’s analysis. The former is in arrears on a portion of its service charge and building maintenance expenses, while the latter has a lease expiring in October 2025, and is expected to vacate at that time.
The loan is collateralised by River Ouest, a seven-story office building and an adjacent two-story service/amenity building located in the commune of Bezons, France, within the Val-d’Oise department. The property is five kilometres north of La Défense and 18 kilometres northwest of central Paris. As of the April 2025 IPD, the total outstanding debt balance was €180.9 million (€2,815 per sqm), down 3.2% since the last review (€186.9 million) and down 7.8% from issuance (€196.2 million) due to a combination of scheduled amortization and cash sweep.
The loan transferred to special servicing on 15 January 2024 after the borrower did not exercise the loan’s second extension option and did not pay all amounts due. Following that, the loan was restructured on 7 August 2024, wherein the maturity date was extended to 15 April 2026 with the option to extend for another year to 15 April 2027. As of the April 2025 IPD, the loan continued to perform and all interest and principal due was paid in full.
KBRA analysed the cash flow for the property utilizing information from the trustee and servicer to determine KNCF. The analysis produced a KNCF of €9.2 million and a KBRA value of €110.8 million (€1,724 per sqm). The resulting in-trust KLTV is 163.3%, up from 112.1% in our June review, and up from 75.9% at securitisation. KBRA maintains the loan’s K-LOC designation and its KPO of Underperform due to its status with the special servicer and concerns surrounding the collateral property’s tenants.
Details concerning the classes with rating changes are as follows:
- Class A to BBB (sf) from A (sf)
- Class B to BB (sf) from BBB- (sf)
- Class C to B- (sf) from BB- (sf)
- Class D to CCC (sf) from B- (sf)
To access ratings and relevant documents, click here.
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