KBRA announces the assignment of preliminary ratings to four classes of BX 2024-BIO2, a CMBS single-borrower securitization.

The collateral for the transaction is a $560.0 million portion of a $760.0 million non-recourse, first lien mortgage loan. The fixed rate loan has a five-year term and requires monthly interest-only payments that are based on an assumed coupon of 6.25%. The loan is secured by the borrowers’ fee simple interests in seven life science lab/office buildings (97.2% of total allocated loan amount) and one parking garage (2.8%). In total, the portfolio contains 995,458 sf of lab/office space and is located within three of the largest life science markets in the US across two states, Massachusetts (four properties, 56.8% of total allocated loan amount) and California (four, 43.2%). As of April 2024, the portfolio was 93.8% leased to 13 unique tenants.

KBRA’s analysis of the transaction included a detailed evaluation of the properties’ cash flows using our North American CMBS Property Evaluation Methodology and the application of our North American CMBS Single Borrower & Large Loan Rating Methodology. In addition, KBRA also relied on its Global Structured Finance Counterparty Methodology for assessing counterparty risk in this transaction and its ESG Global Rating Methodology, to the extent deemed applicable.

The results of our analysis yielded a KBRA net cash flow (KNCF) for the property of approximately $61.0 million, which is 14.8% below the issuer's NCF, and a KBRA value of approximately $794.6 million, which is 27.6% below the appraiser’s aggregate as-is value. The resulting in-trust KBRA Loan to Value (KLTV) is 95.6%. In our analysis of the transaction, we also reviewed and considered third party engineering, environmental, and appraisal reports, the results of our property site inspections, and legal documentation review.

To access rating and relevant documents, click here.

Click here to view the report.

Methodologies

• CMBS: North American CMBS Property Evaluation Methodology
• CMBS: North American CMBS Single Borrower & Large Loan Rating Methodology
• Structured Finance: 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.

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.

About KBRA

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.

Doc ID: 1005175

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