Fitch Ratings has affirmed all classes and Rating Outlooks of
RATING ACTIONS
Entity / Debt
Rating
Prior
A-3 68275CAC2
LT
AAAsf
Affirmed
AAAsf
B 68275CAD0
LT
AAAsf
Affirmed
AAAsf
C 68275CAE8
LT
AAAsf
Affirmed
AAAsf
D 68275CAF5
LT
AAsf
Affirmed
AAsf
E 68275CAG3
LT
AAsf
Affirmed
AAsf
F 68275CAH1
LT
Asf
Affirmed
Asf
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VIEW ADDITIONAL RATING DETAILS
KEY RATING DRIVERS
Continued Paydown/Stable Cash Flow: The affirmations reflect the transaction's continued paydown, stable to improving cash flow, low trust leverage and strong experienced sponsorship. The Positive Outlook for class D reflects paydown since issuance (the transaction has been paid down 38%) and the potential for an upgrade once there is clarity regarding the
Substantial Rollover Prior to Loan Maturity;
The largest tenant at the property, Alliance Bernstein (50.2% of NRA), moved its corporate headquarters to
Quality Asset in Prime Midtown Manhattan Locations: The certificates are backed by a loan on a high-quality office property located in Midtown Manhattan. The
Leasing Reserves: The sponsor has maintained leasing reserves of
Low Leverage & Amortization: The trust loan continued to amortize through
The Fitch stressed debt service coverage ratio (DSCR) and loan-to-value (LTV), inclusive of the pro-rata non-trust notes, is 1.51x and 58.2%, respectively, with total trust debt per square foot of approximately
Experienced Sponsorship: The collateral properties benefit from the committed sponsorship and experienced property management of
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative rating action/downgrade:
Downgrades are not expected due to the low trust leverage but may be possible with significant and sustained occupancy and cash flow declines. Revenues from parking and other income declined in 2021 likely due to the pandemic; downgrades are possible if these revenue streams fail to recover. Additionally, building expenses may increase starting in 2024 due to the recently passed Local Law 97, which requires building owners in
Factors that could, individually or collectively, lead to positive rating action/upgrade:
An upgrade to class D is possible should the borrower be able to successfully manage the upcoming roll, particularly for the Alliance Bernstein space. However, class D's Outlook may be revised to Stable if there is no clarity on the subleases and the sponsor fails to secure a replacement tenant. Upgrades to classes E and F are possible if the borrower maintains the property's historically high occupancy rate and there is sustained cash flow improvement.
Best/Worst Case Rating Scenario
International scale credit ratings of Structured Finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit https://www.fitchratings.com/site/re/10111579.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg
Additional information is available on www.fitchratings.com
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