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Kroll Bond Rating Agency Assigns Preliminary Ratings to MSCI 2015-XLF1

NEW YORK–(BUSINESS WIRE)–

Kroll Bond Rating Agency, Inc. (KBRA) is pleased to announce the assignment of preliminary ratings to two classes of the MSCI 2015-XLF1 securitization, a $545.1 million large loan floating-rate CMBS transaction (see ratings listed below).

MSCI 2015-XLF1 is a CMBS large loan floating-rate transaction collateralized by five, non-recourse, first lien mortgage loans with an aggregate in-trust principal balance of $545.1 million. The senior pooled notes, together with 680 Madison Avenue, total $348.4 million and include Ashford Full Service Portfolio ($103.8 million), Ashford Select Service Portfolio ($31.4 million), and SOMA Towers ($28.2 million). Both the senior pooled and the subordinate non-pooled notes, which total $85.6 million, will be contributed to the trust. There is one non-pooled loan, Elad Portfolio, which is the sole source of cash flow for the “ELD” certificates, which are not rated by KBRA. As a result, the trust loan counts, balances, and percentages herein exclude the non-pooled Elad Portfolio loan.

The majority of the pool consists of lodging properties (50.0%) which serve as collateral for two loans, Ashford Full Service Portfolio ($103.8 million, 5 assets) and Ashford Select Service Portfolio ($31.4 million, 5 assets). Retail exposure (42.6%) is represented by 680 Madison Avenue ($185.0 million, 1 asset). The remaining property type exposure, multifamily (7.4%), consists of the SOMA Towers loan. The properties are located in ten states with three individual state exposures that represent more than 10.0% of the pool balance: New York (42.6%), California (12.7%), and Minnesota (10.2%).

KBRA’s analysis of the transaction involved a detailed evaluation of the underlying cash flows using our CMBS Property Evaluation Guidelines and the application of our CMBS Single-Borrower & Large Loan Rating Methodology. The results of the analysis yielded a KNCF for the underlying collateral properties that was, on average, 4.9% less than the issuer cash flow for the pooled loan components. KBRA applied our stressed capitalization rates to the KNCF to arrive at valuations of the underlying properties. The KBRA values were, on average, 29.7% less than the appraiser’s valuation for the pooled loan components. The resulting KBRA in-trust loan to value (KLTV) was 66.5% for the pooled loan components and the KLTV was 88.8% for the total in-trust balance, inclusive of the subordinate loan components. All of the loans have additional financing in place in the form of mezzanine debt. Inclusive of this additional debt, the weighted average all-in KLTV for the trust assets was 118.4%. As part of our analysis of the transaction, we also reviewed and considered third party engineering and environmental reports, our analysts’ site visits to the collateral properties, and the transaction structure.

Preliminary Ratings Assigned: MSCI 2015-XLF1

Class Balance Rating A $213,400,000 AAA(sf) X-CP(1) $348,400,000 NR X-EXT(1) $348,400,000 NR B $60,500,000 AA-(sf) C $45,100,000 NR D $29,400,000 NR AFS1(2) $37,100,000 NR AFS2(2) $27,600,000 NR ASL1(2) $9,100,000 NR ASL2(2) $8,000,000 NR SOMA(2) $3,800,000 NR ELD1(3) $55,100,000 NR ELD2(3) $14,100,000 NR ELD3(3) $10,300,000 NR ELD4(3) $8,200,000 NR ELD5(3) $15,900,000 NR ELD6(3) $7,500,000 NR ELDX(3) $87,700,000 NR

1 Notional amount
2 Represents a loan-specific class of certificates and is only entitled to distributions from the corresponding subordinate non-pooled component of the related mortgage loan.
3 Represents a loan-specific class that is only entitled to proceeds received with respect to the Elad Portfolio loan.

Related publications: (available at www.kbra.com)

CMBS: MSCI 2015–XLF1 Presale Report

CMBS: Single Borrower & Large Loan Rating Methodology, published August 8, 2011

CMBS Property Evaluation Guidelines, published June 10, 2011

About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).

FinanceLoansCMBS Contact: Kroll Bond Rating Agency, Inc.
Analytical Contacts:

Michael McGorty, (646) 731-2393

mmcgorty@kbra.com

or

Michael Brown, (646) 731-2307

mbbrown@kbra.com

or

Ken Kor, (646) 731-2339

kkor@kbra.com

or

Robin Regan, (646) 731-2358

rregan@kbra.com

or

Follow us on Twitter!
@KrollBondRating […]

Kroll Bond Rating Agency Assigns Preliminary Ratings to Hyatt Hotel Portfolio Trust 2015-HYT

NEW YORK–(BUSINESS WIRE)–

Kroll Bond Rating Agency, Inc. (KBRA) is pleased to announce the assignment of preliminary ratings to the Hyatt Hotel Portfolio Trust 2015-HYT transaction (see ratings list below). Hyatt Hotel Portfolio Trust 2015-HYT is a CMBS single borrower transaction that is collateralized by a $340.0 million floating rate loan that was originated by JPMorgan Chase Bank, National Association and an affiliate of Goldman Sachs Mortgage Company. The loan has an initial two year term with three, one-year extension options. Proceeds from the mortgage loan, along with $167.0 million of mezzanine financing, $117.7 million of cash equity and a $19.0 million letter of credit contributed by the loan sponsor, were used to facilitate the acquisition of a portfolio of 38 hospitality assets.

The loan is secured by the borrower’s fee simple interests in 35 lodging properties totaling 4,530 keys, as well as the leasehold interest in three assets totaling 420 keys. Twenty-seven of the properties are select-service hotels operated under the Hyatt Place flag. These assets were built between 1990 and 2013, and range in size from 79 to 162 keys. The remaining 11 assets are extended-stay hotels operated under the Hyatt House flag. These assets were built between 1997 and 2010. All of the properties in the portfolio have been renovated since 2007, and a total of $41.0 million ($8,277 per key) has been spent on capital improvements across the portfolio from 2007 to 2014. Over 95% of the collateral properties by ALA are located in markets considered to be primary or secondary by KBRA. The primary market exposure (19.9%) includes two of the ten largest properties by ALA which equates to 9.4% of the portfolio balance. In addition, one of the portfolio’s five largest MSA concentrations is in a primary market, Boston (4.9%).

KBRA’s analysis of the transaction included a detailed evaluation of the properties’ cash flows using our CMBS Property Evaluation Guidelines, and the application of our CMBS Single Borrower & Large Loan Rating Methodology. For the purposes of our analysis, we determined KBRA net cash flow (KNCF) for each asset, and applied KBRA capitalization rates to each property’s KNCF to determine property value. KBRA adjusted this value to give partial credit in the amount of $30.0 million for a capital improvement reserve that was funded at origination. The weighted average variance to the issuer’s NCF was 2.4%, and the weighted average value variance to each property’s third party appraisal values was 34.0%. The analysis produced an aggregate KBRA value of $371.3 million and an in- trust KLTV of 91.6%.

For further details on KBRA’s analysis of the transaction, please see our Pre-Sale Report, entitled Hyatt Hotel Portfolio Trust 2015-HYT, which was published today at www.kbra.com.

The preliminary ratings are based on information known to KBRA at the time of this publication. Information received subsequent to this release could result in the assignment of final ratings that differ from the preliminary ratings.

Preliminary Ratings Assigned: Hyatt Hotel Portfolio Trust 2015-HYT

Class Expected Rating Balance (US$) A AAA(sf) $110,070,000 X-CP AAA(sf) $289,000,000(1) X-EXT AAA(sf) $340,000,000(1) B AA-(sf) $40,130,000 C A-(sf) $29,800,000 D BBB-(sf) $43,000,000 E BB-(sf) $62,100,000 F B-(sf) $54,900,000

(1)Notional balance.

17g-7 Disclosure:

All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC Rule 17g-7, to provide a description of a transaction’s representations, warranties and enforcement mechanisms that are available to investors when issuing credit ratings. KBRA’s disclosure for this transaction can be found in the report entitled Hyatt Hotel Portfolio Trust 2015-HYT 17g-7 Disclosure Report.

Related publications: (available at www.kbra.com)

CMBS Presale: Hyatt Hotel Portfolio Trust 2015-HYT

CMBS Property Evaluation Guidelines, published June 10, 2011

CMBS Single Borrower & Large Loan Rating Methodology, published February 23, 2012

About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).

BondsFinanceHyatt Hotel Contact: Analytical Contacts:

Laura Wolinsky, (646) 731-2379

lwolinsky@kbra.com

or

Ken Kor, (646) 731-2339

kkor@kbra.com

or

Robin Regan, (646) 731-2358

rregan@kbra.com

or

Michael B. Brown, (646) 731-2307

mbbrown@kbra.com […]

Kroll Bond Rating Agency Assigns Preliminary Ratings to JPMCC 2014-FL5

NEW YORK–(BUSINESS WIRE)–

Kroll Bond Rating Agency, Inc. (KBRA) is pleased to announce the assignment of preliminary ratings to 21 classes of JPMCC 2014-FL5, a $671.3 million large loan floating rate CMBS transaction (see ratings listed below).

The collateral for the transaction consists of ten first-lien mortgage loans, with eight loans (92.4%) secured by hospitality properties and the remaining loans (7.6%) secured by office properties. Nine (96.9%) of the ten loans have been participated into a pooled component and a non-pooled component, which total $516.7 million and $154.6 million, respectively. Each non-pooled loan component serves as the sole source of cash flow for a loan-specific class of certificates.

KBRA’s analysis of the transaction involved a detailed evaluation of the underlying cash flows using our CMBS Property Evaluation Guidelines and the application of our CMBS Single-Borrower & Large Loan Rating Methodology. The results of the analysis yielded KNCF for the underlying collateral properties that was, on average, 3.1% less than issuer cash flow. KBRA applied our stressed capitalization rates to KNCF to arrive at valuations of the underlying properties. The KBRA values were, on average, 41.7% less than the appraiser’s as-is valuation. The resulting KBRA in-trust Loan to Value (KLTV) was 78.8%. Six loans (52.0%) have additional financing in the form of mezzanine debt and three loans (27.1%) have subordinate B-notes in place. The weighted average all-in KLTV for the loans was 111.3%. As part of our analysis of the transaction, we also reviewed and considered third party engineering and environmental reports, our analysts’ site visits of the collateral properties, and the transaction structure.

For complete details on the analysis, please see our presale report, JPMCC 2014-FL5 published today at www.kbra.com. The preliminary ratings are based on information known to KBRA at the time of this publication. Information received subsequent to this release could result in the assignment of final ratings that differ from the preliminary ratings.

Preliminary Ratings Assigned: JPMCC 2014-FL5

Class Balance Expected Rating A $300,500,000 AAA(sf) X-CP(1) $516,700,000 AAA(sf) X-EXT(1) $516,700,000 AAA(sf) B $76,400,000 AA-(sf) C $57,300,000 A-(sf) D $82,500,000 NR RH(2) $29,300,000 BB-(sf) FH1(2) $26,400,000 BB-(sf) FH2(2) $21,600,000 B(sf) DBM(2) $7,700,000 NR BRS1(2) $16,800,000 BB-(sf) BRS2(2) $17,400,000 NR DFW(2) $13,200,000 NR ESA1(2) $8,600,000 NR ESA2(2) $2,600,000 NR OVL(2) $1,250,000 A-(sf) RVW1(2) $1,900,000 BB-(sf) RVW2(2) $1,600,000 B(sf) RPD(2) $6,200,000 NR

1 Notional amount. 2 Represents a loan-specific class of certificates and is only entitled to distributions from a non-pooled interest in the related mortgage loan.

Related publications (available at www.kbra.com):

CMBS: JPMCC 2014-FL5 Presale Report

CMBS: Single Borrower & Large Loan Rating Methodology, published August 8, 2011

CMBS Property Evaluation Guidelines, published June 10, 2011

Follow us on Twitter!

@KrollBondRating

About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).

BondsFinanceCMBS Contact: Analytical Contacts:

Kroll Bond Rating Agency

Michael McGorty, 646-731-2393

mmcgorty@kbra.com

or

Michael B. Brown, 646-731-2307

mbbrown@kbra.com

or

Robin Regan, 646-731-2358

rregan@kbra.com […]

Kroll Bond Rating Agency Assigns Preliminary Ratings to JPMCC 2014-INN

NEW YORK–(BUSINESS WIRE)–

Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to the JPMCC 2014-INN transaction (see ratings list below). JPMCC 2014-INN is a CMBS single borrower transaction that is collateralized by a $635.0 million, floating rate loan that was originated by JPMorgan Chase Bank, National Association. The loan has an initial two year term with three, one-year extension options. Proceeds from the mortgage loan, along with $205.0 million of mezzanine financing and approximately $208.0 million of new cash equity contributed by the loan sponsor, were used to facilitate the acquisition of the majority interest in a portfolio of 47 hospitality assets.

The loan is secured by the borrowers’ fee simple interests in 46 hospitality properties and leasehold interest in one hospitality property. The properties consists of 36 extended-stay properties (74.6%), nine limited-service properties (20.6%) and two full-service properties (4.8%) located in 30 different MSAs in 16 states. The properties are operated under flags including Residence Inn by Marriott (30 properties, 60.8%), Hyatt House (five properties, 13.0%), Hampton Inn (five properties, 9.8%), Courtyard by Marriott (three properties, 7.2%), Westin (one property, 3.7%), Sheraton Four Points (one property, 3.6%), Sheraton (one property, 1.1%) and TownePlace Suites by Marriott (one property, 0.8%).

KBRA’s analysis of the transaction included a detailed evaluation of the properties’ cash flows using our CMBS Property Evaluation Guidelines, and the application of our CMBS Single Borrower & Large Loan Rating Methodology. For the purposes of our analysis, we determined KBRA net cash flow (KNCF) for each asset, and applied KBRA capitalization rates to each property’s KNCF to determine property value. KBRA Adjusted this value to give partial credit for the upfront capital improvement reserves in the amount of $80.25 million that were funded into a reserve account at loan origination. The weighted average variance to the issuer’s NCF was 1.1%, and the weighted average value variance to each property’s third party appraisal values was 32.7%. The analysis produced an aggregate KBRA value of $707.8 million and an in trust KLTV of 89.7%.

For further details on KBRA’s analysis of the transaction, please see our Pre-Sale Report, entitled JPMCC 2014-INN, which was published today at www.krollbondratings.com.

The preliminary ratings are based on information known to KBRA at the time of this publication. Information received subsequent to this release could result in the assignment of final ratings that differ from the preliminary ratings.

Preliminary Ratings Assigned: JPMCC 2014-INN

Class Expected Rating KLTV Balance (US$) A AAA (sf) 30.1% 213,240,000 X-CP* AAA (sf) N/A 508,000,000 X-EXT* AAA (sf) N/A 635,000,000 B AA- (sf) 41.1% 77,760,000 C A- (sf) 49.3% 57,700,000 D BBB-(sf) 61.0% 83,300,000 E BB-(sf) 79.0% 127,200,000 F B(sf) 89.7% 75,800,000

*Balance represents notional amount.

17g-7 Disclosure:

All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC Rule 17g-7, to provide a description of a transaction’s representations, warranties and enforcement mechanisms that are available to investors when issuing credit ratings. KBRA’s disclosure for this transaction can be found in the report entitled JPMCC 2014-INN 17g-7 Disclosure Report.

Follow Us on Twitter!

Related publications:
CMBS Property Evaluation Guidelines, published June 10, 2011
CMBS Single Borrower & Large Loan Rating Methodology, published August 8, 2011

About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).

BondsFinanceCMBS Contact: Analytical:

Kroll Bond Rating Agency

Michael B. Brown, 646-731-2307

mbbrown@kbra.com

or

Keith Kockenmeister, 646-731-2349

kkockenmeister@kbra.com

or

Anna Hertzman, 646-731-2367

ahertzman@kbra.com

or

Robin Regan, 646-731-2358

rregan@kbra.com […]

Public Utilities Board reports on Payday Loans in Manitoba …

The Public Utilities Board filed its Report on Payday Loans in Manitoba with Minister Jim Rondeau, the Minister responsible for The Consumer Protection Act and The Public Utilities Board Act. The Board conducted a public review and consultation of Manitoba’s payday loan regulations and the payday loan industry. The Board made certain findings and twelve (12) recommendations arising out of the consultation.

In its Report to the Minister the Board recommended that the cost of credit for a payday loan remain unchanged at 17% of principal loaned and that the borrowing limit remain at 30% of net pay. The Board also recommended that replacement loans remain available at the existing rate cap of 5% and payday lenders should be entitled to recover the full cost of a dishonoured cheque or debit charge.

Payday Loans are an expensive way to borrow money, a $17 fee on a two-week, $100 loan is equivalent to paying 442% annually as the cost of borrowing.

The Board also made a number of other recommendations respecting possible new borrowing disclosure obligations, data collection provisions for recovery of more detailed information from lenders, further investigation of internet lending and possible further regulatory control respecting unlicensed internet products.

The proliferation of unlicensed internet lenders operating in Manitoba is an issue. The Board recommended that further research be completed in this area and that the Manitoba Government work with other governments to consider what more may be done to control unlicensed offerings, or to make consumers more aware of these unregulated businesses.

The Board also recommended that the Government of Manitoba investigate and consider what can be done regarding the regulation of payday loan-like products. There is room for confusion in the current circumstances and the potential for harm to consumers. The Board notes with concern, the rates being charged in Manitoba’s unsecured personal consumer credit industry for payday loan-like offerings. Currently, businesses offering these products are not regulated as payday lenders.

The full Recommendations of the Board are:

1. The definition of cost of credit remains as formulated. The single rate should continue to include all of the component costs for a payday loan.

2. The total cost of credit for a payday loan remain at 17% of the principal amount of a payday loan.

3. The limit on the rate for replacement, extension or renewal loans remain at 5% of the principal amount of the payday loan.

4. The limit on the rate at 5% remain for loans provided within seven days to the same borrower.

5. The limit on borrowing remain at 30% of net pay based on the definition in the existing regulation.

6. Upon default the current interest rate remain at 2.5% per month, non-compounding.

7. The full expense of a dishonoured cheque or debit transaction incurred by a lender be recoverable, subject to proof of the actual cost incurred and disclosure by the lender to the borrower.

8. The licensing fee and the financial education levy remain in place and at the rates currently set. Education funds should be used for direct consumer education. A targeted approach to distinguish between licensed and unlicensed lenders is required now.

9. The Minister investigate and consider what action can be taken regarding the regulation of payday loan-like products.

10. Further research be completed respecting unlicensed internet payday lending in Manitoba and that the Manitoba Government work with other governments to consider what may be done to control unlicensed offerings, or to reduce the risks to Manitoba consumers from these unregulated businesses. Licensing requirements should include proof that the lender has a registered office in Manitoba.

11. A cumulative borrowing disclosure notice, to appear on every new payday loan transaction statement between a lender and a borrower and disclosing the cumulative loan amount and the cumulative actual dollar cost for all loans for that borrower within a calendar year, be adopted by regulation.

12. The Consumer Protection Office require lenders to provide statistics annually including: total number of loans issued, total number of borrowers, number of loans per borrower, number of full time and part time employees including owner and managers. The Manitoba Government should also consider the statistical reporting requirements in other Canadian jurisdictions to determine the most useful data that is both available for confidential filing by lenders for aggregation and public disclosure and that will serve the interests of regulators including any future review by The Board or government.

A copy of the Report, which contains significant additional information, may be reviewed on the Board’s website, or be obtained through the Board’s Office.

[…]

Payday loan rates should stay the same: Manitoba's Public Utilities …

Image email_97x23.png

A Manitoba regulator has delivered its report on payday loan companies in the province that calls for rates to remain unchanged.

On Tuesday, the Public Utilities Board sent its Report on Payday Loans in Manitoba to Minister Jim Rondeau, who is responsible for the Consumer Protection and The Public Utilities Board acts.

In the report, the board made 12 recommendations, including that the cost of credit for a payday loan stay at 17 per cent of principled loaned and that the borrowing limit stay at 30 per cent of net pay.

In a press release, the board stated that payday loans “are an expensive way to borrow money, a $17 fee on a two-week, $100 loan is equivalent to paying 442 per cent annually as the cost of borrowing.”

The board also called on the provincial government to work with other governments on the proliferation of unlicensed Internet lenders that are currently operating in Manitoba, calling them “unregulated businesses.”

Consumers’ confusion over payday loan-like products was addressed in the report, with the board recommending that the provincial government also consider what can be done to regulate the “unsecured personal consumer credit industry for payday loan-like offerings.”

The board’s full recommendations are:

  1. The definition of cost of credit remains as formulated. The single rate should continue to include all of the component costs for a payday loan.
  2. The total cost of credit for a payday loan remain at 17 per cent of the principal amount of a payday loan.
  3. The limit on the rate for replacement, extension or renewal loans remain at 5 per cent of the principal amount of the payday loan.
  4. The limit on the rate at 5 per cent remain for loans provided within seven days to the same borrower.
  5. The limit on borrowing remain at 30 per cent of net pay based on the definition in the existing regulation.
  6. Upon default the current interest rate remain at 2.5 per cent per month, non-compounding.
  7. The full expense of a dishonoured cheque or debit transaction incurred by a lender be recoverable, subject to proof of the actual cost incurred and disclosure by the lender to the borrower.
  8. The licensing fee and the financial education levy remain in place and at the rates currently set. Education funds should be used for direct consumer education. A targeted approach to distinguish between licensed and unlicensed lenders is required now.
  9. The Minister investigate and consider what action can be taken regarding the regulation of payday loan-like products.
  10. Further research be completed respecting unlicensed internet payday lending in Manitoba and that the Manitoba Government work with other governments to consider what may be done to control unlicensed offerings, or to reduce the risks to Manitoba consumers from these unregulated businesses. Licensing requirements should include proof that the lender has a registered office in Manitoba.
  11. A cumulative borrowing disclosure notice, to appear on every new payday loan transaction statement between a lender and a borrower and disclosing the cumulative loan amount and the cumulative actual dollar cost for all loans for that borrower within a calendar year, be adopted by regulation.
  12. The Consumer Protection Office require lenders to provide statistics annually including: total number of loans issued, total number of borrowers, number of loans per borrower, number of full time and part time employees including owner and managers. The Manitoba Government should also consider the statistical reporting requirements in other Canadian jurisdictions to determine the most useful data that is both available for confidential filing by lenders for aggregation and public disclosure and that will serve the interests of regulators including any future review by The Board or government.

A copy of the report with additional information may be reviewed on the board’s website at pub.gov.mb.ca, or be obtained through the board’s office.

News Worth Sharing:

[…]