Kroll Bond Rating Agency (KBRA) released a report that looks into the changes of CMBS loan pools securitized in 2016, a follow-up of “Not All Loans Make the Final Cut,” which was published in April 2016. The report focuses on trends in loans that were dropped in the 34 KBRA rated transactions in 2016 between the time of preliminary and final feedback. KBRA found that almost a quarter (24.3%) of the transaction balance changed during the year which is on par with the 2015 figure of 24.5%. Many of the trends remained the same from the prior year with some additional findings and takeaways highlighted below:

  • The frequency of funded and unfunded drops declined for industrial properties, and increased for lodging properties;
  • The frequency of funded drops increased for lodging and retail properties;
  • The frequency of drops for non-bank originated loans declined;
  • Fewer dropped loans were ultimately securitized in subsequent transactions; and
  • To the extent a dropped loan was subsequently securitized, a longer passage of time between the initial loan drop and the subsequent securitization was observed.

Please click here to view the report.

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).