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TMCNet:  KBRA Assigns Preliminary Ratings to WFCM 2018-BXI

[January 12, 2018]

KBRA Assigns Preliminary Ratings to WFCM 2018-BXI

Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to nine classes of WFCM 2018-BXI, a CMBS single asset, single borrower (SASB) securitization.

The collateral for the transaction is a $192.0 million non-recourse, first lien mortgage loan. The floating-rate loan requires interest-only payments and has an initial two-year term with five, one-year extension options. The loan is secured by the borrower's fee simple interests in 34 industrial assets and one office building primarily located in the greater Chicago and South Florida markets. The properties are mostly warehouse (71.1% of the loan balance) and distribution/warehouse (13.1%) facilities.

As of October 2017, the portfolio was 91.2% occupied by 87 tenants, and the three largest tenants by base rent are Moran Foods, Inc., Marmon Holdings, and Brad Foote Gear Works, Inc. The portfolio tenants operate within a variety of industries, including aerospace, energy, food distribution, home furnishings, manufacturing, and pharmaceuticals.

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) of $16.7 million. To value the portfolio, we applied a blended capitalization rate of 9.10% and made adjustments when an individual asset had a variance to the as-is appraised value that was high relative to the rest of the pool. KBRA arrived at a value of $190.0 million and a KBRA Loan to Value (KLTV) of 101.1% for the portfolio. In our analysis of the transaction, we also reviewed and considered third-party engineering, environmental, and appraisal reports; the results of our site inspections of 25 of the properties; and legal documentation.

For further details on KBRA's analysis, please see our pre-sale report, entitled WFCM 2018-BXI, which was published today at

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: WFCM 2018-BXI

Class   Expected KBRA Rating   Balance (US$)
A   AAA(sf)   $88,000,000
X-CP   AAA(sf)   $74,800,000*
X-NCP   AAA(sf)   $88,000,000*
B   AA(sf)   $20,000,000
C   A(sf)   $13,000,000
D   BBB-(sf)   $18,000,000
E   BB-(sf)   $28,000,000
F   B(sf)   $14,200,000
HRR**   B-(sf)   $10,800,000
*Notional balance
**To satisfy the US risk retention rules, a third-party purchaser will purchase and retain an "eligible horizontal residual interest" consisting of the Class HRR certificates, representing at least 5.0% of the fair value of all non-residual interests issued by the issuer on the closing date.

Representations & Warranties Disclosure

All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC (News - Alert) 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 WFCM 2018-BXI Representations & Warranties Disclosure.

Related Publications: (available at

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.


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