DBRS Morningstar Confirms Ratings on All Classes of TRTX 2019-FL3 Issuer, Ltd.

DBRS Limited (DBRS Morningstar) confirmed the ratings on the following classes of notes issued by TRTX 2019-FL3 Issuer, Ltd. (the Issuer):

-- Class A at AAA (sf)
-- Class A-S at AAA (sf)
-- Class B at AA (low) (sf)
-- Class C at A (low) (sf)
-- Class D at BBB (high) (sf)
-- Class E at BBB (low) (sf)
-- Class F at BB (low) (sf)
-- Class G at B (low) (sf)

All trends are Stable. In conjunction with this press release, DBRS Morningstar has published a Surveillance Performance Update report with in-depth analysis and credit metrics for the transaction with business plan updates on the select loans. To access this report, please click on the link under Related Documents below or contact us at [email protected].

The rating confirmations reflect the overall stable performance of the transaction, which remains in line with DBRS Morningstar’s expectations. At issuance, the collateral for the transaction consisted of 22 floating-rate mortgages secured by 98 mostly transitional commercial real estate properties, with a total balance of $1.23 billion, excluding approximately $231.8 million of future funding commitments. The transaction is structured with an initial 24-month Reinvestment Period (ending with the October 2021 Payment Date), whereby the Issuer may acquire additional future funding participations and funded companion participations with principal repayment proceeds.

As of the August 2021 remittance, the trust consists of 20 loans with an aggregate principal balance of $1.12 billion and $111.3 million in the Cash Reinvestment Account. Of these 20 loans, 19 were structured with future funding components totaling $349.2 million. Based on an update from the collateral manager, a cumulative amount of $210.1 million has been released to 18 individual borrowers to aid in property stabilization efforts. Another $139.1 million of cumulative future funding commitments allocated to 19 loans remains outstanding.

To date, 13 of the original 22 loans, representing 62.2% of the current pool balance, remain in the pool. Seven newly acquired loans have been added to the trust since issuance, including five loans, representing 17.0% of the pool, that have been added since the last DBRS Morningstar rating action in October 2020. Of the nine loans that have repaid from the transaction since issuance, only one was purchased out of the trust at par by the collateral manager. That loan was secured by a hotel property and its performance was significantly affected by the ongoing pandemic.

According to the August 2021 reporting, no loans are in special servicing but four loans (23.4% of the current pool) are on the servicer’s watchlist, having been flagged for upcoming loan maturity, which is scheduled to occur between September and November 2021. Each of the four loans is structured with extension options available to the respective borrowers. Servicer commentary indicates that 1500 Spring Garden (5.5% of the current pool) will only extend its loan maturity date by one month in September 2021, rather than the full year, as the loan is expected to repay in full at that time. The collateral manager has indicated that loan extension negotiations are currently ongoing for 888 Broadway (5.7% of the current pool), as the loan will not achieve the performance requirements, given a decline in rental income.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/373262.

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

DBRS Morningstar provides updated analysis and in-depth commentary in the DBRS Viewpoint platform for this transaction.

For complimentary access to this content, please register for the DBRS Viewpoint platform at www.viewpoint.dbrsmorningstar.com The platform includes loan-level data for most outstanding CMBS transactions (including non-DBRS Morningstar-rated), as well as loan-level and transaction-level commentary for most DBRS Morningstar-rated and -monitored transactions.

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

The principal methodology is the North American CMBS Surveillance Methodology (March 26, 2021), which can be found on dbrsmorningstar.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 Morningstar Global Structured Finance Related Methodologies document, which can be found on dbrsmorningstar.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

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/357883.

For more information regarding structured finance rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/358308.

For more information regarding the structured finance rating approach and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/359905.

The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar 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. Please note a sensitivity analysis is not performed for CMBS bonds rated CCC or lower. The DBRS Morningstar long-term rating scale definition indicates that ratings of CCC or lower are assigned when the bond is highly likely to default or default is imminent, thereby prevailing over a sensitivity analysis.

Generally, the conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. DBRS Morningstar’s outlooks and ratings are monitored.

For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at [email protected].

DBRS Limited
DBRS Tower, 181 University Avenue, Suite 700
Toronto, ON M5H 3M7 Canada
Tel. +1 416 593-5577