KBRA is pleased to announce the assignment of preliminary ratings to 13 classes of BMO 2026-C15, a $722.8 million CMBS conduit transaction collateralized by 51 commercial mortgage loans secured by 98 properties. The collateral properties are located throughout 31 MSAs, of which the three largest are New York (18.2% of pool balance), Phoenix (10.0%), and North – Central New Jersey (8.3%). The pool’s three largest property type exposures are retail (32.3%), self-storage (21.4%), and industrial (15.0%). The largest loan in the pool, Arizona Mills (10.0%), is a 1.2 million sf outlet center located in Tempe, Arizona, approximately 11 miles southeast of the Phoenix CBD. The five largest loans, which also include Orchard at Saddleback (7.7%), U-Haul AREC Portfolio 22 (6.5%), U-Haul – AREC2 Portfolio (6.2%), and Lawrence Logistics Center (4.8%), represent 35.2% of the initial pool balance, while the top 10 loans represent 53.8%.

KBRA’s analysis of the transaction incorporated our multi-borrower rating process that begins with our analysts’ evaluation of the underlying collateral properties’ financial and operating performance, which determines KBRA’s estimate of sustainable net cash flow (KNCF) and KBRA value using our North American CMBS Property Evaluation Methodology. On a weighted average basis, the pool’s KNCF was 13.1% less than the issuer’s cash flow. KBRA capitalization rates were applied to each asset’s KNCF to derive values that were 39.6% less than third party appraisal values. The pool has an in-trust KLTV of 82.8% and an all-in KLTV of 84.0%. The process also deploys rent and occupancy stresses, probability of default regressions, and loss given default calculations to determine losses for each loan which, in conjunction with pool concentration and other relevant factors, are used to assign our credit ratings.

To access ratings and relevant documents, click here.

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Methodologies

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

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