TRTX 2019-FL3 Issuer, Ltd.: Surveillance Performance Update
DBRS, Inc. (DBRS Morningstar) confirmed its ratings on all classes of notes issued by TRTX 2019-FL3 Issuer, Ltd. with Stable trends. The rating confirmations reflect the increased credit support to the bonds as a result of successful loan repayment, as there has been collateral reduction of 60.6% since issuance. The increased credit support to the bonds serves as a mitigant to potential adverse selection in the transaction as seven loans are secured by office properties (64.0% of the current trust balance). As a result of complications initially arising from impacts of the Coronavirus Disease (COVID-19) pandemic and the ongoing challenges with leasing available space, the borrowers of these loans have generally been unable to increase occupancy and rental rates to initially projected levels, resulting in lower-than-expected cash flows. While all loans remain current, given the decline in desirability for office product across tenants, investors, and lenders alike, there is greater uncertainty regarding the borrowers’ exit strategies upon loan maturity.
DBRS Morningstar is a global credit ratings business with 700 employees in eight offices globally. DBRS and Morningstar Credit Ratings are committed to empowering investor success, serving the market through leading-edge technology and raising the bar for the industry.
Together, we are the world’s fourth largest credit ratings agency and a market leader in Canada, the U.S. and Europe in multiple asset classes. We rate more than 2,600 issuers and 54,000 securities worldwide and are driven to bring more clarity, diversity and responsiveness to the ratings process. Our approach and size provide the agility to respond to customers’ needs, while being large enough to provide the necessary expertise and resources. For more details visit us at dbrs.com.
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