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KBRA Assigns Preliminary Ratings to UBS 2018-C14

November 15, 2018

NEW YORK--(BUSINESS WIRE)--Nov 15, 2018--Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to 17 classes of UBS 2018-C14 (see ratings list below), a $650.9 million CMBS conduit transaction collateralized by 45 commercial mortgage loans secured by 236 properties.

The collateral properties are located in 36 states, with one state exposure, Florida (14.8%), representing more than 10.0% of the pool balance. The pool has exposure to all of the major property types, three of which represent 10.0% or more of the pool balance: retail (34.9%), office (29.0%), and lodging (19.9%). The loans have principal balances ranging from $2.2 million to $44.3 million for the largest loan in the pool, GNL Portfolio (6.8%), which is comprised of seven, single-tenant office (5) and industrial (2) properties located in six states that together comprise 647,713 sf. The five largest loans, which also include Heartland Dental Medical Office Portfolio (6.8%), Lafayette Park (5.7%), Nebraska Crossing (5.4%) and Riverwalk II (5.4%), represent 30.0% of the initial pool balance, while the top 10 loans represent 50.6%

KBRA’s analysis of the transaction incorporated our multi-borrower rating process that begins with our analysts’ evaluation of the underlying collateral properties’ financial and operating performance, which determine KBRA’s estimate of sustainable net cash flow (KNCF) and KBRA value using our . On an aggregate basis, KNCF was 8.6% less than the issuer cash flow. KBRA capitalization rates were applied to each asset’s KNCF to derive values that were, on an aggregate basis, 37.6% less than third party appraisal values. The pool has an in-trust KLTV of 95.7% and an all-in KLTV of 100.2%. The model deploys rent and occupancy stresses, probability of default regressions, and loss given default calculations to determine losses for each collateral loan that are then used to assign our credit ratings.

For complete details on the analysis, please see our pre-sale report, published at . The report includes our , an easy to use, Excel-based workbook that provides the following information:

KBRA Deal Tape – Contains KBRA loan level details for every loan in the pool, and the ability for users to input adjustments to KNCF and KBRA Cap Rates and see the related impact on key deal metrics. KBRA Credit Metrics Comparison Tool – Enables the user to compare the subject transaction to a user-defined transaction comp set. The feature provides many of the fields that are included in our CMBS Monthly Trend Watch publication. Excel-based property cash flow statements for the top 20 loans.

Preliminary Ratings Assigned: UBS 2018-C14

1 Notional balance. 2 To satisfy the US risk retention rules, an affiliate of Rialto Mortgage Finance, LLC is expected to purchase the RR Interest which is expected to be an “eligible vertical interest”. The RR Interest will equal approximately 5.0% of each class of non-residual certificates issue.

To access ratings, reports and disclosures, click .

Related Publications: (available at )

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About KBRA and KBRA Europe

KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. 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, is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.

View source version on businesswire.com:https://www.businesswire.com/news/home/20181115005664/en/

CONTACT: Analytical:

Ken Kor, Associate Director

(646) 731-2339

kkor@kbra.com

or

James Wang, Senior Director

(646) 731-2450

jwang@kbra.com

or

Yee Cent Wong, Senior Managing Director

(646) 731-2374

ywong@kbra.com

or

Susannah Keagle, Senior Director

(646) 731-3357

skeagle@kbra.com

KEYWORD: UNITED STATES NORTH AMERICA NEW YORK

INDUSTRY KEYWORD: PROFESSIONAL SERVICES BANKING FINANCE INSURANCE

SOURCE: Kroll Bond Rating Agency

Copyright Business Wire 2018.

PUB: 11/15/2018 10:59 AM/DISC: 11/15/2018 11:00 AM

http://www.businesswire.com/news/home/20181115005664/en

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