Kroll Bond Rating Agency Assigns Preliminary Ratings to JPMCC 2014-FBLU

Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings for the JPMCC 2014-FBLU transaction (see ratings list below). JPMCC 2014-FBLU is a CMBS single borrower transaction that is collateralized by a $535.0 million first mortgage floating rate loan that was originated by JPMorgan Chase Bank, National Association on December 6, 2013. The loan, which has an initial two-year term, provides for three, one-year extension options and requires monthly interest-only payments based on one month LIBOR plus an initial spread of 2.15%. A third-party interest rate cap agreement is in place with Commonwealth Bank of Australia "AA-". Should the loan be extended, a replacement interest rate cap agreement covering the extended loan term must be procured.

The loan is secured by the borrower's fee simple and leasehold interest in The Fontainebleau Miami Beach, a 1,594 key luxury full-service resort located in Miami Beach, Florida. The Fontainebleau Miami Beach is an iconic asset that is a popular destination for leisure and group travelers as it has 1,250 linear feet of ocean frontage with direct beach access and a number of amenities which including 12 swimming pools as well as a 40,000 sf health spa with 31 treatment rooms, a fitness center, six retail outlets, and a 23-slip marina. It also features several restaurants, night life an entertainment venues, and 204,000 sf of indoor/outdoor banquet and meeting space.

The property is situated within Millionaire's Row on Collins Avenue, the main beachfront thoroughfare in Miami Beach. Miami Beach, and the subject, have the ability to draw visitors from the Northern United States and Europe during its winter months, and South American tourists during its summers, who seek to escape winter in the southern hemisphere. Overall, a record 13.9 million estimated visitors stayed at least one night in the Greater Miami and Beaches area in January-December 2012, the third year in a row with a record number of overnight visitors.

KBRA's analysis of the transaction included a detailed evaluation of the resort's cash flows using our CMBS Property Evaluation Guidelines, and the application of our CMBS Single Borrower & Large Loan Rating Methodology. The results of the analysis produced an individual KNCF for each property. We applied KBRA capitalization rates to each property's KNCF to arrive at KBRA value. The analysis produced an aggregate KNCF and KBRA value for the property of $73.3 million and $718.3 million, respectively. The resulting KLTV is 74.5%. In our analysis of the transaction, we also reviewed and considered third party engineering and environmental reports, as well as our own on-site inspections of the properties and the competition.

For complete details on the analysis for each property, please see our Pre-Sale Report, entitled JPMCC 2014-FBLU, which was published today at www.krollbondratings.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 final ratings that differ from the preliminary ratings.

Preliminary Ratings Assigned: JPMCC 2014-FBLU
Class					Expected Rating					Balance (US$)
A					AAA (sf)					$205,000,000
X-CP					AAA (sf)					$340,000,000*
X-EXT					AAA (sf)					$340,000,000*
B					AA+ (sf)					$77,000,000
C					A+ (sf)					$58,000,000
D					BBB- (sf)					$76,000,000
E					BB- (sf)					$119,000,000
*Notional Amount

17g-7 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 entitled JPMCC 2014-FBLU 17g-7 Disclosure Report.

Related publications:

CMBS Property Evaluation Guidelines, published June 10, 2011

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

About Kroll Bond Rating Agency

Kroll Bond Rating Agency, Inc. (www.krollbondratings.com) 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
Joseph Kelly, 646-731-2365
[e-mail]
or
Keith Kockenmeister, 646-731-2349
[e-mail]