KBRA Affirms All Ratings for MHC Commercial Mortgage Trust 2021-MHC
19 Apr 2024 | New York
KBRA affirms all of its outstanding ratings for MHC Commercial Mortgage Trust 2021-MHC, a $1.85 billion CMBS single borrower transaction. The transaction has benefited from increases in credit enhancement levels due to deleveraging from property prepayments; however, the magnitude of changes does not warrant ratings adjustments at this time.
The collateral at issuance was the borrowers’ fee simple interests in 124 manufactured housing communities (MHCs) totaling 29,086 pads and 771 RV sites located across 13 states. Since last review, 28 properties have been released. The current collateral is the borrowers’ fee simple interest in 96 MHCs totaling 23,936 pads and 722 RV sites located across 11 states. The floating rate loan was structured with an initial two-year term with three one-year extension options. In association with the first extension option executed effective April 9, 2023, the interest rate benchmark was converted to one-month term SOFR. The second extension option was executed April 9, 2024, and a new interest rate cap agreement was obtained with a strike rate of 4.34%. The loan requires monthly interest-only payments based on one-month SOFR plus the initial spread of 1.89% and a 0.11% adjusted SOFR replacement spread.
KBRA analyzed the cash flow for the properties utilizing information from the trustee and servicer to determine KNCF. The analysis produced a KNCF of $116.6 million and a KBRA value of $1.50 billion ($62,460 per pad), representing a 7.2% increase per pad from securitization, net of property releases. The resulting in-trust KLTV is 123.7% compared to 129.6% at last review and 132.8% at securitization. KBRA maintains a KPO of Perform for the loan.
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