Kroll assigned its top expected rating to the new issuance based on 30% credit enhancement to six classes, as well as to one class with a notional balance and a mezzanine class with 21.375% credit enhancement.
One class with 15% CE received an AA- (sf) expected rating. Other subclasses received the following expected investment grade ratings with the following CE levels: A- (sf), 10.75%, and BBB- (sf), 6.125%.
Two classes received expected speculative grade ratings with the following CE levels: BB- (sf), 3.5%, and B (sf), 2.625%. Three classes were not rated.
Three companies sold loans into the deal: Ladder Capital Financial LLC (44.1%), German American Capital Corp. (29.4%) and Natixis Real Estate Capital (26.5%). Deutsche Mortgage & Asset Receiving Corp. is the depositor.
U.S. Bank NA will be the trustee, Midland Loan Services will be the master servicer, Rialto Capital Advisors LLC will be the special servicer, Deutsche Bank Trust Co. Americas will be the certificate administrator and Park Bridge Lender Services LLC will be the operating advisor.
According to Kroll, the collateral properties are located in 27 states, with the top exposures as follows: New York (22.4%) and California (12.1%).
“The pool also only has exposure to two property-type concentrations in excess of 20%, which are office (27.7%) and retail (23.4%).” Kroll said in an email Monday.
According to the company, the loans have principal balances ranging from $2.3 million to $100.8 million for the largest loan in the pool, which is secured by the Spirit Cole Portfolio (9.3%), a 1.4 million square foot portfolio of 24 single-tenant properties located across 17 states.
“The majority of the loans (40 loans, 63.3%) were used to refinance existing debt, while the proceeds from 16 loans (35.9%) were used for acquisition of the related properties,” Kroll said. “The proceeds from one loan (0.9%) were used for recapitalization purposes.”
Kroll noted, “There is one loan, 15 MetroTech Center (7.4%) that was originated with a split loan structure whereby the mortgaged property securing the loans also secures pari passu companion loans.” Four loans have mezzanine debt in place.
One loan “is secured by a cooperative condominium and which permits the borrower to incur future subordinate debt secured by the mortgaged property provided certain conditions in the loan documents are met,” according to Kroll.