Kroll Bond Rating Agency Preliminary Ratings to MSBAM 2013-C8

Tue Jan 29, 2013 8:50pm EST

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NEW YORK--(Business Wire)--
Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of
preliminary ratings for the MSBAM 2013-C8 transaction (see ratings list below).
MSBAM 2013-C8 is a $1.14 billion CMBS conduit transaction collateralized by 54
fixed rate commercial mortgage loans that are secured by 62 properties. 

The loans have principal balances ranging from $2.2 million to $115.0 million
for the largest loan in the pool, which is secured by The Crossings Premium
Outlets (10.1%, a 411,223 sf anchored retail establishment located in
Tannersville, Pennsylvania. The top five loans, which also include Chrysler East
Building (8.8%), Boston Park Plaza (8.3%), The Wanamaker Building (6.7%) and
Hyatt Regency Hill Country Resort and Spa (5.4%), represent 39.3% of the initial
pool balance, while the top 10 loans represent 59.5%. The underlying collateral
properties are geographically diverse as they are located in 20 states. The
largest state exposure is Pennsylvania (21.1%). With the exception of New York
(16.4%), and Texas (13.8%), no other geographic concentration exceeds 10.0% of
the pool. The transaction has exposure to all of the major property sectors.
There are three property types that together represent 79.8% of the pool,
however, which include: retail (34.3%), office (26.3%), and lodging (19.2%). 

KBRA`s analysis of the transaction incorporated our multi-borrower rating
process that begins with our analysts' evaluation of underlying collateral
properties' financial and operating performance, which determine KBRA`s estimate
of sustainable net cash flow (KNCF) and KBRA value. The analysis incorporates a
detailed evaluation of the underlying collateral properties` financial and
operating performance using our CMBS Property Evaluation Guidelines to determine
Kroll Net Cash Flow (KNCF). The resulting KNCF for the collateral properties was
3.4% less than the issuer cash flow on a weighted average basis. KBRA
capitalization rates were applied to each asset`s KNCF to derive individual
property values that, on an aggregate basis, were 37.0% lower than third party
appraisal values. The weighted average capitalization rate for the transaction
was 9.3%. The pool has an in-trust KLTV of 91.0% and an all-in KLTV of 96.4%. 

The KBRA credit model deploys rent and occupancy stresses, probability of
default regressions, and loss given default calculations to determine losses for
each collateral loan, which are then used to assign our credit ratings. 

For complete details on the analysis, please see our presale report, MSBAM
2013-C8, 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.

                                                                                  
 Class           Rating              Balance (USD)           Rating Action        
 A-1             AAA (sf)            $75,700,000             Preliminary          
 A-2             AAA (sf)            $145,900,000            Preliminary          
 A-3             AAA (sf)            $140,000,000            Preliminary          
 A-4             AAA (sf)            $335,996,000            Preliminary          
 A-SB            AAA (sf)            $98,964,000             Preliminary          
 A-S             AAA (sf)            $108,105,000            Preliminary          
 X-A             AAA (sf)            $904,665,000            Preliminary          
 X-B             AAA (sf)            $68,276,000             Preliminary          
 B               AA- (sf)            $68,276,000             Preliminary          
 PST             A- (sf)             $219,054,000            Preliminary          
 C               A- (sf)             $42,673,000             Preliminary          
 D               BBB- (sf)           $48,363,000             Preliminary          
 E               BB (sf)             $19,914,000             Preliminary          
 F               B+ (sf)             $12,802,000             Preliminary          
                                                                                  


17g7 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 CMBS: MSBAM 2013-C8 17g-7 Disclosure Report.


Related publications (available at www.krollbondratings.com):
CMBS: U.S. CMBS Multi-Borrower Rating Methodology, published February 23, 2012
CMBS Property Evaluation Guidelines, published June 10, 2011 

About Kroll Bond Rating Agency
KBRA was established in 2010 by Jules Kroll to restore trust in credit ratings
by creating new standards for assessing risk and by offering accurate, clear and
transparent ratings. 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).

Kroll Bond Rating Agency
Analytical:
Jereme Koons, 646-731-2306
jkoons@krollbondratings.com
or
Steve Rosamilia, 917-200-8531
srosamilia@krollbondratings.com
or
Robin Regan, 646-731-2358
rregan@krollbondratings.com

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