DBRS Finalizes Provisional Ratings on Prima Capital CRE Securitization 2019-RK1

DBRS, Inc. (DBRS) finalized its provisional ratings on the following classes of Commercial Mortgage Pass-Through Certificates, Series 2019-RK1 issued by Prima Capital CRE Securitization 2019-RK1 as follows:

DreamWorks Campus:
-- Class A-D at BBB (low) (sf)
-- Class B-D at BB (low) (sf)
-- Class C-D at B (low) (sf)

The Gateway:
-- Class A-G at A (low) (sf)
-- Class B-G at BBB (low) (sf)
-- Class C-G at BB (high) (sf)

TriBeCa House:
-- Class A-T at BBB (low) (sf)
-- Class B-T at BB (low) (sf)
-- Class C-T at B (high) (sf)

All trends are Stable.

All classes will be privately placed.

Interest is deferable on all rated notes other than Classes A-D, A-G, A-T and B-G.

With respect to each Loan Group, payments on the notes comprising such Loan Group and the related Preferred Shares will be supported solely by the Collateral Interest for such Loan Group.

An affiliate of J.P. Morgan Securities LLC, the Placement Agent, is expected to purchase the $21.25 million DreamWorks Campus B-3 participation interest prior to the closing of this transaction.

The transaction has a total mortgage balance of $152.25 million and consists of three non-pooled B-notes tied to previously securitized collateral. The collateral includes one office property, DreamWorks Campus and Headquarters, and two multifamily properties, The Gateway and TriBeCa House. The Gateway and TriBeCa House were previously securitized in two DBRS-rated deals, DBGS 2018-C1 and BMARK 2018-B6, respectively. The notes are secured by the grantor trust certificate representing beneficial interests in a subordinate loan, which is a portion of a whole loan. The transaction comprises three Loan Groups — Group D, Group G and Group T — with certificates tied to each of the three subjects. Because the notes are not pooled, proceeds from the Collateral Interest relating to any Loan Group will not be available to support shortfalls in collections on the Collateral Interest relating to any other Loan Group.

The transaction is structured to provide legal isolation of the issuer as a bankruptcy-remote, single-purpose entity separate and distinct from the seller/sponsor. True sale opinions were delivered to confirm transfer of the underlying loans to the issuer. While the issuer makes typical separateness representations and other structural elements are consistent with bankruptcy remoteness, DBRS notes the absence of a non-consolidation opinion. Common equity of nominal value is owned by a Cayman charitable trust, but the economics of the issuer reside with the seller via the preferred stock and thus a risk of consolidation, DBRS’s view, remains. Delivery of a non-consolidation opinion would serve as additional probative evidence of the investor reliance on the separateness of the issuer from the seller sponsor, and thus its absence is a departure from what opinions DBRS typically receives in similar transactions, which DBRS views as a slight weakness; however, the overall structure is consistent with bankruptcy remoteness at this rating level.

All ratings are subject to surveillance, which could result in ratings being upgraded, downgraded, placed under review, confirmed or discontinued by DBRS.

For supporting data and more information on this transaction, please log into www.viewpoint.dbrs.com.

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

With regard to due diligence services, DBRS was provided with the Form ABS Due Diligence-15E (Form-15E), which contains a description of the information that a third party reviewed in conducting the due diligence services and a summary of the findings and conclusions. While due diligence services outlined in Form-15E do not constitute part of DBRS’s methodology, DBRS used the data file outlined in the independent accountant’s report in its analysis to determine the ratings referenced herein.

The principal methodology is the North American Single-Asset/Single-Borrower Methodology, which can be found on www.dbrs.com under Methodologies & Criteria. For a list of the structured-finance-related methodologies that may be used during the rating process, please see the DBRS Global Structured Finance Related Methodologies document, which can be found on www.dbrs.com in the Commentary tab under Regulatory Affairs. Please note that not every related methodology listed under a principal structured finance asset class methodology may be used to rate or monitor an individual structured finance or debt obligation.

The rated entity or its related entities did participate in the rating process for this rating action. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the rating process.

The full report providing additional analytical detail is available by clicking on the link under Related Documents below or by contacting us at info@dbrs.com.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.

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