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KBRA Downgrades Three Ratings and Affirms All Other Outstanding Ratings for UBS 2017-C3

11 Jul 2025   |   New York

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KBRA downgrades the ratings of three classes of certificates and affirms all other outstanding ratings of UBS 2017-C3, a $578.6 million CMBS conduit transaction. The rating actions follow a surveillance review of the transaction, which has incurred realized losses since last review from the March 2025 discounted payoff of the Crowne Plaza Memphis Downtown loan. The realized losses as well as KBRA's estimated losses for the transaction resulted in lower loss-adjusted C/E levels across the bottom of the capital structure. However, the transaction, particularly among higher rated classes, has benefited from deleveraging from loan payoffs, amortization, and defeasances.

As of the June 2025 remittance period, there are five specially serviced assets (17.2% of the pool balance), of which one (4.9%) is REO and one (4.8%) is over 60 days delinquent. KBRA identified 11 K-LOCs (29.1%), including the specially serviced assets. Of the 11 K-LOCs, four (17.9%) have estimated losses. The K-LOCs are displayed in the table below.

Loss Given Default (000s) Loss Severity 5 Embassy Suites - Santa Ana LO $34,425 5.9% N C Y Prior SS 04/29/2020 $3,675 10.7% 7 OKC Outlets RT $30,458 5.3% Y NPM N Specially Serviced 06/26/2020 $2,273 7.5% 9 JW Marriott Chicago LO $28,500 4.9% Y NPM N REO 06/04/2020 - - 10 Center 78 OF $28,000 4.8% Y 60+ N Specially Serviced 08/30/2023 $16,772 59.9% 14 Younique HQ Building OF $19,585 3.4% N C N Lease Rollover 07/02/2025 - - 19 Homewood Suites Oakland Waterfront LO $10,495 1.8% Y C N Specially Serviced 07/09/2024 $4,397 41.9% 25 Bolingbrook Logistics Center IN $5,982 1.0% N C N Tenant Issues 01/24/2024 - - 35 Redlands University Plaza RT $3,293 0.6% N C N DSCR 07/24/2024 - - 37 La Quinta Fort Worth LO $3,105 0.5% N C N DSCR 08/26/2024 - - 39 5544 Greenwich Road OF $2,588 0.4% N C N DSCR 09/14/2021 - - 41 Woodville Plaza Apartments MF $2,183 0.4% Y 90+ N Specially Serviced 06/25/2024 - - Total K-LOCs $168,614 29.1% $27,117 1. K-LOC Date is the date when the most recent K-LOC was initially determined. 2. Loss Given Default assumes a 100% probability of default (PD). KBRA may determine a lower PD when estimating losses to a transaction. KBRA Estimated 2 K-LOCs Prosp. ID Loan Name Prop Type Current In- Trust Balance (000s) % of Deal Balance SS Loan Status Mod (Y/N) Primary K-LOC Reason K-LOC Date 1
Source: KBRA

Excluding K-LOCs with estimated losses, the transaction’s WA KLTV is 86.7%, compared to 89.6% at KBRA’s last ratings change in July 2024 and 90.7% at securitization. The KDSC is 1.82x, compared to 1.81x at KBRA’s last ratings change and 2.17x at securitization.

Details concerning the classes with rating changes are as follows:

  • Class E-RR to BB+ (sf) from BBB (sf)
  • Class F-RR to CCC (sf) from B (sf)
  • Class G-RR to CC (sf) from CCC (sf)

To access ratings and relevant documents, click here.

Click here to view the report.

Related Publication

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.

Doc ID: 1010301

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