NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to seven classes of BDS 2019-FL4, a $525.0 million managed commercial real estate collateralized loan obligation (CRE CLO) transaction with an 18-month reinvestment period, which includes a 180-day ramp-up period.

The transaction is initially expected to be collateralized by 16 whole loans (or participations therein) with an in-trust balance of $351.2 million and $173.8 million of cash collateral. The cash collateral can be used to acquire four pre-identified delayed-close loans ($108.1 million), pari passu participations related to the initial loan collateral, and previously unidentified whole loans and senior participations, provided such assets satisfy the reinvestment and eligibility criteria.

This transaction includes an interest coverage (IC) test and a par value test (also referred to as an overcollateralization (OC) test). If either test is not satisfied on any determination date, on the following payment date, interest proceeds remaining after interest is paid to the Class D notes will be used to pay down the principal balances of the Class A through D notes in sequential order until the tests are satisfied. If interest proceeds are insufficient to satisfy the tests or pay down the applicable classes of notes, available principal proceeds will be used for such purpose.

KBRA’s analysis of the transaction involved evaluation of property cash flows and values within initial loan pool using our U.S. CMBS Property Evaluation Methodology. The results of the analysis yielded KBRA values that were, on a weighted average basis, 40.0% and 50.6% lower than the appraisers’ as-is values and stabilized values, respectively, and a KBRA Loan to Value (KLTV) for the initial loan pool of 127.5%. The results of this analysis were utilized in the application of our U.S. CMBS Multi-Borrower Rating Methodology. The analysis also included quantitative and/or qualitative review of the various structural features of the transaction, including ramp-up, reinvestment, and IC & OC tests, as well as a review of the legal documents, the results of which were incorporated into our ratings assignment process.

For complete details on the analysis, please see our pre-sale report, BDS 2019-FL4, published at 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.

Preliminary Ratings Assigned: BDS 2019-FL4


Initial Note Balance

Expected KBRA Rating



AAA (sf)



AAA (sf)



AA- (sf)



A- (sf)



BBB- (sf)



BB- (sf)



B- (sf)

Preferred Shares



To access ratings, reports and disclosures, click here.

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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 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, and is 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.


Analytical Contacts:

Michael McGorty, Director

(646) 731-2393

[email protected]

Michael Brown, Managing Director

(646) 731-2307

[email protected]

Christina Moy, Senior Director

(646) 731-2327

[email protected]

Susannah Keagle, Senior Director

(646) 731-3357

[email protected]