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KBRA Downgrades Eight Ratings and Affirms All Other Ratings for MSC 2021-L7

31 Jul 2026   |   New York

Contacts

KBRA downgrades the ratings of eight classes of certificates and affirms all other outstanding ratings of MSC 2021-L7, an $872.6 million CMBS conduit transaction. The rating actions follow a surveillance review of the transaction, which has exhibited an increase in estimated losses since issuance and resulted in a negative C/E shift across the capital stack. The increase in estimated losses is attributable to the second largest loan in the pool, Signature Office Portfolio II ($51.1 million, 5.9% of the pool balance).

As of the July 2026 remittance period, there is one specially serviced asset (5.9% of the pool) that is in foreclosure. KBRA has identified four loans (9.3%) as K-LOCs, including the specially serviced asset, which has an estimated loss. The K-LOCs are depicted in the table below.

Loss Given Default (000s) Loss Severity 1 Signature Office Portfolio II OF $51,058 5.9% Y FCL Y Specially Serviced 05/10/2024 $35,382 69.3% 15 Victory Winn-Dixie Portfolio RT $14,734 1.7% N C N Occupancy 12/15/2025 - - 33 Hale Office Portfolio OF $9,800 1.1% N C N Maturity 09/14/2025 - - 45 903 Sheridan MU $5,987 0.7% N C N Occupancy 09/14/2025 - - Total K-LOCs $81,578 9.3% $35,382 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 the K-LOC with an estimated loss, the transaction's WA KLTV is 105.7%, compared to 104.7% at last review and 103.9% at securitization. The KDSC is 2.31x, compared to 2.29x at last review and 2.30x at securitization.

Details concerning the classes with rating changes are as followed:

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

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