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Kroll Bond Rating Agency Assigns Final Ratings to COMM 2012-FL2 Certificates


Kroll Bond Rating Agency (KBRA) assigned its final ratings to six classes of COMM 2012-FL2, a $272.75 million CMBS large loan transaction (see ratings listed below). Concurrently, we have withdrawn our preliminary ratings on the certificates, which were assigned on October 16, 2012.

The collateral for the transaction consists of two first lien, non-recourse mortgage loans that are secured by lodging properties. The loans are not cross-collateralized or cross-defaulted. The larger of the two loans, the CBM Portfolio, is secured by 40 Courtyard by Marriott select service hotels. The borrower has a fee simple interest in 39 of the properties and a leasehold interest in one property. The other loan is secured by the borrower's fee simple interest in Grove Park Inn, a 512-key, full-service luxury golf resort and spa located in Asheville, NC. Payments received in respect of the Grove Park Inn loan have been bifurcated into two components: a $62.7 million senior and a $15.3 million subordinate component. The Class GPI certificates are only entitled to receive distributions from amounts received on the subordinate component.

KBRA's analysis of the transaction involved a detailed evaluation of the underlying hotels' cash flows using our CMBS Property Evaluation Guidelines and the application of our CMBS Single-Borrower & Large Loan Rating Methodology. Our analysis resulted in a KBRA Net Cash Flow (KNCF) of $36.0 million for the CBM Portfolio and $14,4 million for the Grove Park Inn. KBRA capitalization rates were applied to each property's KNCF to derive the individual property values. The average capitalization rate for the CBM Portfolio was 11.30% and a capitalization rate of 10.75% was used for Grove Park Inn. The application of these capitalization rates resulted in a value of $318.7 million for the CBM Portfolio, which is 33.9% less than the appraised value of the property, and $131.4 million for Grove Park Inn, which is 31.1% less than the appraised value.

For complete details on the analysis, please see our Presale Report, entitled COMM 2012-FL2, published Oct 16th at

Final Ratings Assigned: COMM 2012-FL2

Class     Rating     Balance     Rating Action
A     AAA(sf)     $189,200,000     Assigned
X-1     AAA(sf)     $257,450,000(1)     Assigned
X-2     AAA(sf)     $257,450,000(1)     Assigned
B     AA(sf)     $29,600,000     Assigned
C     A (sf)     $38,650,000     Assigned
GPI(2)     BBB (sf)     $15,300,000     Assigned
R     NR(sf)     NA     Assigned
LR     NR(sf)     NA     Assigned
(1) Notional Amount
(2) Class GPI is a loan-specific certificate and is only entitled to payments from the junior participation interest in the Grove Park Inn loan.

Rule 17g-7 Disclosure

All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC Rule 17g-7, to provide a description regarding the 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 COMM 2012-FL2 17g-7 Disclosure Report.

Related publications (available at

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

CMBS Property Evaluation Guidelines, published June 10, 2011

About Kroll Bond Rating Agency

Kroll Bond Rating Agency, Inc. ( is registered with the SEC as a nationally recognized statistical rating organization (NRSRO). Kroll Bond Rating Agency was established in 2010 to restore trust in credit ratings by establishing new standards for assessing risk and by offering accurate, clear, and transparent ratings.

Kroll Bond Rating Agency, Inc.
Keith Kockenmeister, 646-731-2349
Michael Brown, 646-731-2307

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