Kroll Bond Rating Agency Assigns Preliminary Ratings to JPMCC 2016-NINE

NEW YORK--(BUSINESS WIRE)-- Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to four classes of JPMCC 2016-NINE, a $900.0 million CMBS single-asset single-borrower transaction.

The collateral for the transaction is a $900.0 million portion of a $1.20 billion non-recourse, first lien mortgage loan, which is secured by the borrower’s overlapping fee simple and leasehold interests in 9 West 57th Street, a 50-story Class-A office building located one block south of Central Park in the Manhattan borough of New York City. The five largest tenants are Kohlberg, Kravis, Roberts & Co. (KKR); Chanel Inc.; Apollo Management Holdings, LP; Och-Ziff Management LP; and Providence Equity LLC. As of June 2016, 9 West 57th Street was 63.5% leased.

KBRA’s analysis of the transaction included a detailed evaluation of the property’s cash flow 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 $136.7 million. We applied a capitalization rate of 6.75%, and after adjustments related to the lease-up of vacant space and the upfront TI/LC reserve, we arrived at a KBRA value of $1.93 billion and a KBRA Loan to Value (KLTV) of 62.1%. In our analysis of the transaction, we also reviewed and considered third party engineering, environmental, and appraisal reports, our own on-site inspection of the property, and legal documentation.

For further details on KBRA’s analysis, please see our Pre-Sale Report, entitled JPMCC 2016-NINE, 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 final that differ from the preliminary ratings.

Preliminary Ratings Assigned: JPMCC 2016-NINE

Class			Expected Rating			Balance (US$)
A			AAA(sf)			$	713,724,000
X-A1			AAA(sf)			$	713,724,0001
B			AA-(sf)			$	186,276,000

1Notional balance

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 entitled JPMCC 2016-NINE Representations & Warranties Disclosure.

Related publications:

CMBS Presale Report: JPMCC 2016-NINE

CMBS Property Evaluation Methodology, published December 3, 2015

CMBS Single Borrower and Large Loan Rating Methodology, published March 3, 2015

Methodology for Rating Interest-Only Certificates in CMBS Transactions, published June 6, 2016

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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).

View source version on businesswire.com: http://www.businesswire.com/news/home/20160906006398/en/

Kroll Bond Rating Agency
Analytical Contacts:
Patrick McQuinn, Associate Director
(646) 731-2445
[email protected]
or
Michael Brown, Senior Director
(646) 731-2307
[email protected]
or
Dayna Carley, Senior Director
(646) 731-2391
[email protected]
or
Alec Abrams, Analyst
(646) 731-2401
[email protected]

Source: Kroll Bond Rating Agency

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