KBRA Assigns Preliminary Ratings to FORT 2022-FL3

KBRA is pleased to announce the assignment of preliminary ratings to eight classes of FORT 2022-FL3, a $1.1 billion managed CRE CLO securitization with a two year reinvestment period, followed by a six month replenishment period.

The transaction will initially be collateralized by 24 collateral interests with an aggregate cutoff date in-trust balance of $924.7 million, and $190.2 million of proceeds for the anticipated acquisition of two delayed close assets to be acquired within 90 days following the closing date. Should the cash collateral not be used to acquire delayed close loans, it will be applied as principal proceeds to pay down the notes in accordance with transaction documentation. During the two year reinvestment period, principal proceeds received with respect to the mortgage assets can be reinvested in mortgage assets or to acquire funded companion participations, provided the reinvestment criteria are satisfied and the assets meet certain specified eligibility criteria. Following the reinvestment period, the transaction allows for principal proceeds received with respect to the mortgage assets of up to 10.0% of the aggregate cutoff date balance to be used for acquiring funded companion participations for a period of six months. The replenishment assets must also meet certain specified eligibility criteria and reinvestment criteria. The transaction also provides the sponsor with the ability to effectuate modifications to performing loans subject to certain restrictions and criteria, and to dispose of loans at par under certain circumstances.

This transaction also includes an interest coverage test and a par value test (collectively, the note protection tests). 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, or the Class A through E notes are paid in full. If available 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.

Click here to view the report. To access ratings and relevant documents, click here.

Related Publications

• FORT 2022-FL3 CRE CLO KCAT
• U.S. CMBS Multi-Borrower Rating Methodology
• U.S. CMBS Property Evaluation Methodology
• 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 pursuant to the Temporary Registration Regime. 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.

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