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 Assigned: Hilton Orlando Trust 2018-ORL
Expected KBRA Rating
*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
Pre-Sale Report: Hilton Orlando Trust 2018-ORL
Property Evaluation Methodology
Single Borrower and Large Loan Rating 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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20180213006076/en/
Brown, 646-731-2307Senior Directormbbrown@kbra.comorSusannah
Keagle, 646-731-3357Senior Directorskeagle@kbra.comorMathew