NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) announces the assignment of preliminary ratings to 11 classes of GS Mortgage Securities Corporation Trust 2020-TWN3, a CMBS single-borrower securitization.
The collateral for the transaction consists of a $265.0 million non-recourse, first lien, floating-rate mortgage loan that is secured by the borrowers’ fee simple interests in 58 hotels totaling 7,140 keys. For the TTM 8/2020 period, the portfolio’s occupancy was 75.0% with an average daily rate (ADR) of $43.19, resulting in revenue per available room (RevPAR) of $32.41. The underlying collateral consists of 50 economy extended-stay properties operating under the InTown Suites flag located in 12 states and eight midscale extended-stay properties operating under the Uptown Suites flag located in five states.
KBRA’s analysis of the transaction included a detailed evaluation of the properties’ cash flows using our U.S. CMBS Property Evaluation Methodology and the application of our U.S. CMBS Single Borrower & Large Loan Rating Methodology. In addition, KBRA also relied on its Global Structured Finance Counterparty Methodology for assessing counterparty risk in this transaction, to the extent deemed applicable. The results of our analysis yielded a KBRA net cash flow (KNCF) for the portfolio of roundly $29.8 million. To value the portfolio, we applied a blended capitalization rate of 12.21% to arrive at a KBRA value of approximately $244.4 million ($34,229 per key). The resulting KBRA Loan to Value (KLTV) is 108.4%. In our analysis of the transaction, we also reviewed and considered third party engineering, environmental, and appraisal reports; management agreements; the results of our site inspections, and legal documentation.
- U.S. CMBS Property Evaluation Methodology
- U.S. CMBS Single Borrower and Large Loan Rating Methodology
- Methodology for Rating Interest-Only Certificates in CMBS Transactions
- Global Structured Finance Counterparty Methodology
Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.
A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the U.S. Information Disclosure Form located here.
Information on the meaning of each rating category can be located here.
Further disclosures relating to this rating action are available in the U.S. Information Disclosure Form referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.
KBRA is a full-service credit rating agency registered as an NRSRO with the U.S. Securities and Exchange Commission. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe is registered with ESMA as a CRA.
Laura Wolinsky, Senior Director (Lead Analyst)
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Michael Brown, Managing Director
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Mimi Ophir, Director
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Keith Kockenmeister, Senior Managing Director (Rating Committee Chair)
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Michelle Patterson, Managing Director
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