Kroll Bond Rating Agency Assigns Ratings to GSMS 2017-GS6
NEW YORK, NY (May 31, 2017) – Kroll Bond Rating Agency, Inc. (KBRA) is pleased to announce the
assignment of ratings to 13 classes of the GSMS 2017-GS6 transaction (see ratings list below). GSMS
2017-GS6 is a $959.1 million CMBS conduit transaction collateralized by 33 commercial mortgage
loans secured by 73 properties.
The properties in the collateral pool are located in 26 states and Washington, DC, with only California
(25.8%) representing more than 10.0% of the pool balance. The pool has exposure to all of the major
property types, with two that represent more than 15.0% of the pool balance: office (52.2%) and
retail (18.9%). The loans have principal balances ranging from $5.7 million to $95.5 million for the
largest loan in the pool, 1999 Avenue of the Stars (10.0%), an 821,357 sf, Class-A office tower
located in the Century City neighborhood of Los Angeles. The five largest loans, which also include
Lafayette Centre (8.4%), Pentagon Center (8.3%), U.S. Industrial Portfolio (7.5%), and GSK R&D
Centre (6.8%), represent 41.0% of the initial pool balance, while the 10 largest loans represent
66.3%.
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 using our CMBS
Property Evaluation Methodology. On an aggregate basis, KNCF was 10.9% less than the issuer
cash flow. KBRA capitalization rates were applied to each asset’s KNCF to derive values that were, on
an aggregate basis, 39.1% less than third party appraisal values. The pool has an in-trust KLTV of
93.3% and an all-in KLTV of 102.9%. The model deploys rent and occupancy stresses, probability of
default regressions, and loss given default calculations to determine losses for each collateral loan that
are then used to assign our credit ratings.
Ratings Assigned: GSMS 2017-GS6
Class
A-1
A-2
A-3
A-AB
A-S
X-A
B
C
X-B
D
X-D
E**
F**
G**
Retained Interest**
Initial Class Balance
$15,431,000
$250,000,000
$359,651,000
$29,390,000
$84,147,000
$738,619,000*
$45,579,000
$42,074,000
$87,653,000*
$46,748,000
$46,748,000*
$17,530,000
$10,518,000
$33,893,308
$24,170,112
KBRA Rating
AAA(sf)
AAA(sf)
AAA(sf)
AAA(sf)
AAA(sf)
AAA(sf)
AA-(sf)
A-(sf)
AAA(sf)
BBB-(sf)
BBB-(sf)
BB-(sf)
B-(sf)
NR
NR
*Notional balance
**To satisfy the US risk retention rules, a third party purchaser will purchase an “eligible horizontal residual interest” consisting of
the Class E, F and G certificates representing at least 2.48% of the fair market value and GSMC or a majority-owned affiliate will
retain an “eligible vertical interest” representing approximately 2.52% of the transaction’s par value.
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 asset-level representations, warranties and enforcement
mechanisms set forth in the related offering documents when issuing credit ratings. KBRA’s disclosure
for this transaction is contained in the report entitled CMBS: GSMS 2017-GS6 Representations &
Warranties Disclosure Report.
Related publications (available at www.kbra.com):
CMBS: GSMS 2017-GS6 Pre-Sale Report
CMBS: U.S. CMBS Multi-Borrower Rating Methodology, published January 4, 2017
CMBS Property Evaluation Methodology, published December 3, 2015
Methodology for Rating Interest-Only Certificates in CMBS Transactions, published June 6,
2016
Analytical Contacts:
Anna Hertzman
(646) 731-2367
[email protected]
Yee Cent Wong
(646) 731-2374
[email protected]
Robin Regan
(646) 731-2358
[email protected]
Ravish Kamath
(646) 731-2328
[email protected]
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@KrollBondRating
About Kroll Bond Rating Agency
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).