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KBRA Assigns Preliminary Ratings to GACM 2019-FL1
[May 14, 2019]

KBRA Assigns Preliminary Ratings to GACM 2019-FL1

Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to eight classes of GACM 2019-FL1, a $625.0 million managed commercial real estate collateralized loan obligation (CRE CLO) transaction with an 18-month reinvestment period, which includes a six-month ramp-up period.

The transaction is initially expected to be collateralized by 26 whole loans (or participations therein), inclusive of a pair of crossed loans, with an in-trust balance of $473.8 million and $151.2 million of cash collateral. The cash collateral can be used to acquire one pre-identified delayed-close loan ($42.5 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 E notes will be used to pay down the principal balances of the Class A through E 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, 38.2% and 46.9% lower than the appraisers' as-is values and stabilized values, respectively, and a KBRA Loan to Value (KLTV) for the initial loan pool of 112.6%. 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, GACM 2019-FL1, 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: GACM 2019-FL1

Class       Initial Note Balance       Expected KBRA Rating
A       $320,312,000       AAA (sf)
A-S       $85,938,000       AAA (sf)
B       $42,187,000       AA- (sf)
C       $42,188,000       A- (sf)
D       $31,250,000       BBB (sf)
E       $15,625,000       BBB- (sf)
F       $16,406,000       BB- (sf)
G       $14,844,000       B- (sf)
Preferred Shares       $56,250,000       NR

To access ratings, reports and disclosures, click here.

Related Publications: (available at

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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.

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