KBRA Places the Ratings of Seven Classes of MSC 2016-UBS12 on Watch Downgrade
24 Sep 2025 | New York
KBRA places the ratings of seven classes of MSC 2016-UBS12, a CMBS conduit transaction, on Watch Downgrade.
The Watch placements are based on an increase in interest shortfalls and concentration of specially serviced assets and K-LOCs. Currently, interest shortfalls are affecting up to and including the Class C certificates. KBRA considered the likelihood of interest shortfalls continuing and reaching higher in the capital structure during the resolution of the specially serviced assets.
As of the September 2025 remittance period, there are 12 specially serviced assets (20.2% of the pool balance), of which one is REO (2.3%) and one is in foreclosure (12.0%) . KBRA identified 12 K-LOCs (60.3%), including the specially serviced assets. The 681 Fifth Avenue loan (largest, 12.0%) was deemed non-recoverable in July 2025 and is the primary cause of interest shortfalls reaching higher in the capital structure compared to previous months.
KBRA will continue to monitor the transaction and the underlying loans’ performance and will seek to resolve or update the Watch Downgrade status within 90 days.
Details concerning the classes with ratings placed on Watch are as follows:
- Class A-S to AAA (sf) DN from AAA (sf)
- Class B to A (sf) DN from A (sf)
- Class C to BBB- (sf) DN from BBB- (sf)
- Class D to CCC (sf) DN from CCC (sf)
- Class E to CC (sf) DN from CC (sf)
- Class X-D to CCC (sf) DN from CCC (sf)
- Class X-E to CC (sf) DN from CC (sf)
To access ratings and relevant documents, click here.