Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to eight classes of Tharaldson Hotel Portfolio Trust 2018-THPT, a $960.0 million CMBS single-asset, single-borrower transaction.
The collateral for the securitization consists of a $960.0 million non-recourse, first lien, floating-rate mortgage loan that is secured by the borrowers' fee simple interests in 118 lodging properties totaling 11,032 keys and leasehold interests in 17 lodging assets totaling 1,442 keys. For the TTM 9/2017 period, the portfolio's occupancy was 70.9% with an average daily rate (ADR) of $114.04, resulting in revenue per available room (RevPAR) of $80.85.
The underlying collateral consists of 41 extended-stay properties (39.7%), 72 limited-service properties (32.2%), 16 select-service properties (16.5%) and six full-service properties (11.5%) located in 68 different MSAs in 28 states. The properties are operated under 20 national flags, and the five largest flags by portfolio balance are as follows: Residence Inn (29 properties, 29.9%), Courtyard (16, 16.5%), Fairfield Inn (31, 11.8%) Hampton Inn (14, 8.8%) and Homewood Suites (nine, 7.5%).
KBRA's analysis of the transaction included a detailed evaluation of the properties' cash flows using our CMBS Property Evaluation Methodology and the application of our CMBS Single Borrower and Large Loan Rating Methodology. The results of our analysis yielded a KBRA net cash flow (KNCF) for the portfolio of $99.2 million. To value the portfolio, KBRA applied a blended capitalization rate of 11.48% to arrive at a KBRA value of $864.3 million. The resulting KBRA Loan to Value (KLTV) is 111.1%. In our analysis of the transaction, we considered the third-party engineering, environmental, seismic, and appraisal reports; management and franchise agreements; the results of our site inspections; and legal documentation.
For further details on KBRA's analysis, please see our pre-sale report, Tharaldson Hotel Portfolio Trust 2018-THPT, which was published today at www.kbra.com. The preliminary ratings are based on information known to KBRA at the time of this publication. Information received subsequent to this release could result in the assignment of ratings that differ from the preliminary ratings.
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Preliminary Ratings Assigned: Tharaldson Hotel Portfolio Trust 2018-THPT |
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| Class | Expected KBRA Rating | Balance (US$) | ||||
| A | AAA (sf) | $261,060,000 | ||||
| B | AA- (sf) | $99,180,000 | ||||
| C | A- (sf) | $73,720,000 | ||||
| D | BBB- (sf) | $97,280,000 | ||||
| X-CP | BBB- (sf) | $424,992,500* | ||||
| X-EXT | BBB- (sf) | $531,240,000* | ||||
| E | BB- (sf) | $153,710,000 | ||||
| F | B- (sf) | $135,850,000 | ||||
| G | NR | $47,500,000 | ||||
| H | NR | $43,700,000 | ||||
| RR Interest** | NR | $48,000,000 | ||||
* Notional balance
** To satisfy the US risk retention rules, the RR Interest is expected to constitute an "eligible vertical interest" for purposes of the US risk retention rules. Each of the originators are expected to retain a portion of the RR Interest in proportion to the percentage of the loan they originated.
Representations & Warranties 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 available here: Tharaldson Hotel Portfolio Trust 2018-THPT Representations & Warranties Disclosure.
Related Publications: (available at www.kbra.com)
- CMBS Pre-Sale Report: Tharaldson Hotel Portfolio Trust 2018-THPT
- CMBS Property Evaluation Methodology
- CMBS Single Borrower and Large Loan Rating Methodology
- Methodology for Rating Interest-Only Certificates in CMBS Transactions
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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 recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and 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: http://www.businesswire.com/news/home/20180118006036/en/
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