KBRA Assigns Initial Rating to Significant Securitization Deal
KBRA's Preliminary Rating Assignment for LV Trust 2024-SHOW
In New York, KBRA has officially announced the assignment of a preliminary rating for a class of LV Trust 2024-SHOW. This significant transaction represents a CMBS single-borrower securitization focused on the high-profile Fashion Show Mall.
The Securitization Overview
This particular securitization is backed by an impressive $850.0 million non-recourse, first lien mortgage loan. Structured as a fixed rate loan with a five-year term, it mandates monthly interest-only payments, which are based on an anticipated coupon rate of 6.00%. Notably, this loan is secured by the borrower’s fee simple interest in a sprawling 1.9 million square feet enclosed super-regional mall, a prominent establishment situated on the Strip in Las Vegas, Nevada. Intriguingly, around 1.7 million square feet of this space directly serves as collateral for the loan.
Leasing and Occupancy Rates
As of mid-2024, the collateralized space boasts a remarkable leasing rate, with approximately 98.9% of it occupied by over 200 distinct tenants. This impressive statistic indicates robust demand, reinforcing confidence in the securitization structure and its underlying asset's performance.
KBRA's Analysis Methodology
KBRA's thorough analysis of the LV Trust transaction involved a meticulous evaluation of the property’s cash flow, applying its established North American CMBS Property Evaluation Methodology. Furthermore, the agency adopted its North American CMBS Single Borrower & Large Loan Rating Methodology to ensure a comprehensive understanding of the transaction's nuances. The assessment also took into account KBRA's Global Structured Finance Counterparty Methodology for addressing any counterparty risk inherent to this transaction, augmented by its ESG Global Rating Methodology where relevant.
Financial Performance Metrics
The findings from this extensive analysis reflect a KBRA Net Cash Flow (KNCF) for the property estimated at approximately $80.9 million. It is crucial to note that this figure is 7.5% lower than the issuer's Net Cash Flow (NCF). Moreover, the analyzed KBRA value approximates $1.1 billion, significantly 36.8% lower than the appraised as-is value. The calculated in-trust KBRA Loan to Value (KLTV) stands at a healthy 78.8%. During the analysis of the transaction, a multitude of reports, including third-party engineering, environmental assessments, and appraisal documents, were considered alongside KBRA's in-person site inspection and thorough legal document review.
Accessibility of Ratings and Documents
For interested parties looking to further investigate ratings and associated documents related to this transaction, the resources are readily accessible through KBRA’s official channels.
Evaluation Methodologies Explained
KBRA deploys several rigorous methodologies in its evaluations. Their methodologies include the North American CMBS Property Evaluation and the North American CMBS Single Borrower & Large Loan Rating Methodologies. Furthermore, they utilize their Global Structured Finance Counterparty Methodology to assess counterparty vulnerabilities and incorporate ESG Global Rating Methodology to address sustainability factors wherever applicable.
Additional Disclosures
For those seeking more detailed insight into key credit considerations, sensitivity analyses exploring variables affecting credit ratings, and information on how these could potentially influence ratings upward or downward, additional materials can be found in the comprehensive rating report issued by KBRA.
About Kroll Bond Rating Agency (KBRA)
Kroll Bond Rating Agency, LLC (commonly referred to as KBRA), stands as a full-service credit rating agency recognized for its rigorous credit assessments. KBRA is registered with the U.S. Securities and Exchange Commission as an NRSRO. Furthermore, KBRA has established registrations with European, UK, and Canadian financial authorities, underscoring its global reach and commitment to providing quality credit ratings across various markets.
Frequently Asked Questions
1. What is LV Trust 2024-SHOW?
LV Trust 2024-SHOW is a CMBS single-borrower securitization backed by a mortgage loan secured by Fashion Show Mall.
2. What is the total loan amount for this securitization?
The securitization is backed by a total loan amount of $850 million.
3. What is the current occupancy rate of the collateralized space?
The collateralized space has an occupancy rate of approximately 98.9% as of 2024.
4. Who assigns the ratings for CMBS transactions?
Ratings for CMBS transactions are assigned by credit rating agencies like KBRA.
5. How does KBRA assess credit risk for securitizations?
KBRA employs a structured methodology that includes cash flow analysis, property evaluation, and risk assessments to evaluate credit risk.
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