KBRA Assigns Preliminary Ratings to NADG Net Lease Mortgage Notes Series 2019-1 LLC, Series 2019-1

NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) assigns a preliminary rating to the Class A Notes issued by NADG 2019-1. This is a $264 million triple-net lease transaction.

This is NADG’s first rated sponsored securitization. The Notes will be secured by fee title to, and leasehold interest on, 146 commercial real estate properties, the leases related to such properties, and all payments required thereunder. The aggregate collateral value for the portfolio is approximately $377.1 million.

NADG has over $4.5 billion of assets under management and owns over 25 million square feet of shopping center and mixed‐use space in the United States and Canada, as well as over a dozen residential land development projects consisting of over 9,000 units in various stages of development or pre‐development.

This transaction benefits from certain structural features including scheduled amortization prior to an Anticipated Repayment Date in December 2024, 30% overcollateralization, debt service coverage ratio triggers and a non-declining maintenance reserve account sized to cover expenses required under the double-net leases included in the transaction.

KBRA employed a hybrid approach in rating this transaction, applying analysis from both its CMBS and ABS methodologies. KBRA analyzed the transaction’s base-case cash flows by applying principles from its US CMBS Property Evaluation Methodology published on September 5, 2019. The resulting cash flows in various scenarios were then analyzed in accordance with KBRA’s Global General Rating Methodology for Asset‑Backed Securities published on November 28, 2017. With regards to the Global General Rating Methodology for Asset‑Backed Securities, this transaction falls within Category 2 – Operating Assets, which typically include transactions that are backed by pools of short-term loans or leases on long-lived assets. KBRA also incorporated the Global Structured Finance Counterparty Methodology published on August 8, 2018.

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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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