DBRS Assigns Provisional Ratings to COMM 2009-K3 Mortgage Trust

DBRS has today assigned provisional point-in-time ratings of AAA to Classes A-1, A-2, A-3, A-AB, A-4 and A-5 issued by COMM 2009-K3 Mortgage Trust (COMM 2009-K3). The ratings are based exclusively on the credit provided by the transaction structure and underlying trust assets without regard to the Freddie Mac Guarantee. Provisional ratings are subject to final documentation; subsequent information received prior to issuance may result in a material change to the rating assigned herein and/or the contents of this press release. The assigned point-in-time ratings will be finalized as of, and only as of, the date of issuance and will not be subject to on-going monitoring, upgrades or downgrades or any further assessment by DBRS after the date of issuance of such underlying classes.

The collateral consists of 62 fixed-rate loans secured by 62 multi-family properties. The portfolio has a pooled trust balance of $1,059,360,467. In general, loan terms are for ten years and interest-only periods are limited to two to three years of the loan. The pool amortizes approximately 12% over the term of the loans; weighted-average exposure per unit is $70,521 and with scheduled amortization balloon loan per unit de-levers to $62,417. Additionally, the weighted-average going in and exit debt yields are considered strong at 9.1% and 10.4%, respectively. Approximately 58% of the pool has an exit debt yield in excess of 10%.

The pool is characterized by concentrations in property type (100% multi-family) and loan size (the largest loan group, the Post Apartments Portfolio, is comprised of five cross-collateralized and cross-defaulted loans that account for approximately 19% of the pool by loan balance). The Post Apartments Portfolio consists of high quality properties based on DBRS’s site inspections with stable operating history. The transaction consists primarily of new loans that were originated for securitization. The Post Apartments Portfolio was originated for Freddie Mac’s portfolio but has been amended to more strictly comply with securitization standards. However, the borrowers are structured as single asset entities rather than single purpose entities.

The pool benefits from 49.6% of the sampled collateral having a property grade of above average or excellent by DBRS. The pool also benefits from experienced sponsorship, as DBRS considers the loan sponsors of 59% of the pool balance to be strong. Additionally, Freddie Mac is considered a reputable multi-family originator with a proven performance history.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The applicable methodology is CMBS Rating Methodology, which can be found on our website under Methodologies.

This is a Structured Finance rating.