KBRA Assigns Preliminary Ratings to Hilton Orlando Trust 2018-ORL
February 13 2018 - 10:43AM
Business Wire
Kroll Bond Rating Agency (KBRA) is pleased to announce the
assignment of preliminary ratings to ten classes of Hilton Orlando
Trust 2018-ORL, a $475.0 million CMBS single-asset, single-borrower
transaction.
The collateral for the transaction consists of a $475.0 million
non-recourse, first lien mortgage loan. The floating rate loan has
an initial two-year term with five, one-year extension options and
requires monthly interest-only payments based on one-month LIBOR
plus a spread of 2.05%. The loan is secured by the borrower’s fee
simple interest in the Hilton Orlando, a 1,417-key, 19-story
full-service hotel located along International Drive, across the
street from, and connected via a pedestrian sky bridge to, the
Orange County Convention Center in Orlando, Florida. The hotel
opened in September 2009 and the sponsors have spent an additional
$27.5 million ($19,399 per key) on capital improvements since
2011.
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) for the portfolio of $51.6 million. We applied a
capitalization rate of 10.50% and arrived at a KBRA value of $491.4
million and a KBRA Loan to Value (KLTV) of 96.7%. In our analysis
of the transaction, we also reviewed and considered third party
engineering, environmental and appraisal reports; management
agreement; STR reports; the results of our site inspection; and
legal documentation.
For further details on KBRA’s analysis, please see our pre-sale
report, Hilton Orlando Trust 2018-ORL, which was published
today at www.kbra.com. The preliminary ratings are based on
information known to KBRA at the time of this publication.
Information received subsequent to this release could result in the
assignment of ratings that differ from the preliminary ratings.
Preliminary Ratings Assigned: Hilton
Orlando Trust 2018-ORL
Class Expected
KBRA Rating Balance (US$)
A AAA(sf)
$162,100,000 X-CP*
AAA(sf) $296,000,000
C-EXT* AAA(sf)
$296,000,000 B
AA-(sf) $51,600,000
C A-(sf)
$38,300,000
D BBB-(sf) $44,000,000
E BB-(sf)
$82,300,000
F B-(sf) $49,200,000
G B-(sf)
$23,500,000
HRR** NR $24,000,000
R NR
N/A
*Notational balance**To satisfy the US risk retention rules,
BSREF Holdings LLC, a third-party purchaser, will purchase and
retain an “eligible horizontal residual interest” consisting of the
Class HRR certificates, representing at least 5.0% of the fair
value of all non-residual interests issued, determined in
accordance with GAAP.
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 available Hilton Orlando Trust 2018-ORL Representations
& Warranties Disclosure.
Related Publications:
(available at www.kbra.com)
- CMBS: Pre-Sale Report: Hilton
Orlando Trust 2018-ORL
- CMBS Property Evaluation
Methodology
- CMBS Single Borrower and Large Loan
Rating Methodology
- Methodology for Rating Interest-Only
Certificates in CMBS Transactions
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About KBRA and KBRA
Europe
KBRA is a full service credit rating agency registered with the
U.S. Securities and Exchange Commission as an NRSRO. In addition,
KBRA is recognized by the National Association of Insurance
Commissioners as a Credit Rating Provider and a certified Credit
Rating Agency (CRA) by the European Securities and Markets
Authority (ESMA). Kroll Bond Rating Agency Europe Limited is
registered with ESMA as a CRA.
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version on businesswire.com: http://www.businesswire.com/news/home/20180213006076/en/
Analytical:KBRALaura
Wolinsky, 646-731-2379Directorlwolinsky@kbra.comorMichael Brown,
646-731-2307Senior Directormbbrown@kbra.comorSusannah Keagle,
646-731-3357Senior Directorskeagle@kbra.comorMathew Holmes,
646-731-2441Analystmholmes@kbra.com