KBRA Assigns Preliminary Ratings to Stark Financing 2023-1 DAC
KBRA UK (KBRA) is pleased to announce the assignment of preliminary ratings to three classes of Stark Financing 2023-1 UK, CMBS single-borrower transaction.
The collateral for the transaction is a £339.5 million limited recourse, first lien mortgage loan originated by Bank of America Europe DAC (50.0%) and Deutsche Bank AG, London Branch (50.0%) in June 2023. The floating rate loan has a three-year term with two 12-month extension options. The borrowers are required to make quarterly interest payments based on SONIA (subject to a floor of zero) plus a margin equal to 2.85%. The borrower entered into an interest rate swap agreement covering 95.0% of the outstanding balance of the loan with a strike rate of 3.25% for the first year and 4.50% for the second and third years. Thereafter, the borrowers are required to purchase either a SONIA cap or swap for successive one-year periods until the final repayment date. The loan is secured by 103 industrial assets that comprise 7.1 million sf and are located across 10 regions throughout the United Kingdom.
The results of our analysis yielded a KBRA net cash flow (KNCF) for the portfolio of approximately £34.2 million and a KBRA value of approximately £451.1 million, which is 26.9% below the appraiser's as-is value. The resulting in-trust KBRA Loan to Value (KLTV) is 75.3%. In our analysis of the transaction, we also reviewed and considered third party engineering, environmental, and appraisal reports, the results of our site inspection of the property, and legal documentation review.
To access ratings and relevant documents, click here.
Click here to view the report.
Related Publications
- European CMBS Rating Methodology
- Global Structured Finance Counterparty Methodology
- ESG Global Rating Methodology
Disclosures
Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.
A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.
Information on the meaning of each rating category can be located here.
This credit rating is endorsed by Kroll Bond Rating Agency Europe Limited for use in the European Union. Information on a credit rating's endorsement status is available on its rating page at KBRA.com.
Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.
There are certain issuers, entities or transactions rated by KBRA Europe or KBRA UK that may be or have relationships with Shareholders and/or Shareholder-Related Companies, as that term is defined in KBRA's Shareholder and Shareholder Related Companies for KBRA Europe and KBRA UK Policy and Procedure. Relevant disclosure information may be found here.
About KBRA UK
Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider. Kroll Bond Rating Agency UK is located at 1 Connaught Place, 2nd Floor London, England.
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