Articles from Kroll Bond Rating Agency, LLC

KBRA has assigned a long-term rating of BBB to the Unlimited Tax General Obligation Bonds (Dedicated Revenues) of the Board of Education of the City of Chicago, IL (Chicago Public Schools), Series 2025A. The Outlook remains Negative.

KBRA announces the assignment of preliminary ratings to six classes of SCG 2025-SNIP, a CMBS single-borrower securitization. The collateral for the transaction is a $930.0 million floating rate, interest-only mortgage loan. The loan is expected to have an initial two-year term with three, one-year extension options and require monthly interest-only payments. There is also $95.0 million mezzanine debt in place. The loan will be secured by the borrowers’ fee simple and leasehold interests in 54 industrial assets and one excess land parcel. In total, the portfolio contains 8.2 million sf and the properties are located across five states: Nevada (33.9%), Arizona (28.0%), Colorado (21.4%), Maryland (12.0%), and Tennessee (4.7%). As of September 2025, the portfolio was 88.3% leased to over 230 unique tenants.

KBRA assigns preliminary ratings to four classes of notes issued by Upstart Securitization Trust 2025-3 (“UPST 2025-3”), a $320 million consumer loan ABS collateralized by unsecured consumer loans.

KBRA releases the August 2025 issue of CMBS Trend Watch.

KBRA releases its Business Development Company Ratings Compendium, which looks at results for the quarter ended June 30, 2025.

KBRA assigns preliminary ratings to 76 classes of mortgage pass-through notes from OBX 2025-J2 Trust, a $304.4 million prime RMBS transaction. The underlying collateral, comprising 241 fixed-rate, fully amortizing loans is characterized by moderate borrower equity, as evidenced by the WA original LTV of 73.1%, and has a WA original credit score of 784.

KBRA assigns preliminary ratings to 67 classes of mortgage pass-through certificates from Sequoia Mortgage Trust 2025-9 (SEMT 2025-9), a $595.3 million prime RMBS transaction. The pool is comprised of 486 first-lien, fully amortizing fixed rate mortgages with 20-year and 30-year maturity terms. The collateral is characterized by a weighted average (WA) original credit score of 779 and moderate borrower equity, with a WA original LTV of 72.0% and WA original CLTV of 72.0%.

On September 2, 2025, Wichita, KS-based Equity Bancshares, Inc. (NYSE: EQBK) ("Equity” or “the company"), and Omaha, NE-based Frontier Holdings, LLC (“Frontier”), parent company of Frontier Bank, jointly announced that they had entered into a definitive agreement pursuant to which Equity Bancshares, Inc. would acquire Frontier Holdings, LLC and Frontier Bank would merge with and into Equity Bank. The proposed transaction, valued at ~$120 million (P/TBV: 1.23x), incorporates a 75% stock / 25% cash consideration mix and is expected to close in 4Q25 pending regulatory approval.

KBRA assigns preliminary ratings to the Class A-F Notes, Class A Notes, Class B Notes, and Class C Notes issued by PK ALIFT Loan Funding 7 LP, an aviation ABS transaction (PKAIR 2025-2). PKAIR 2025-2 represents the fifth aviation loan ABS securitization serviced by Apollo PK Air Management (CLO) LP (Apollo PK, or the Servicer), an affiliate of PK AirFinance (the Company). The PK AirFinance platform, which was founded in 1983, provides financing against aircraft and aircraft engines. The Company’s principal office is in New York with additional offices in London, Luxembourg, Singapore, Tokyo, and Toulouse. As of December 31, 2024, PK AirFinance has originated over $40 billion across 3,000 aviation loans since inception and has a managed portfolio of approximately $3.5 billion secured by approximately 275 aircraft and engines operated by 80 airlines in more than 45 countries. PK AirFinance will retain 100% of the equity of the subject transaction at closing.

KBRA assigns a preliminary rating to one class of notes issued by NYCTL 2025-A Trust, a $172.5 million property tax lien ABS transaction. Proceeds from the Notes will be used to acquire a portfolio of 3,915 property tax liens in New York City with a redemptive value of approximately $220.0 million and a weighted average interest rate of 9.5%. The $220.0 million principal balance largely consists of residential properties (74.0%), followed by commercial and industrial properties (22.4%), vacant land (3.3%), and miscellaneous land (0.3%). The transaction also features liens securing unpaid water rents, sewer rents, and sewer surcharges on certain applicable properties, which comprise approximately $27.1 million (12.3%) of the initial tax lien portfolio. These liens maintain the same first-priority position as traditional property tax liens.

KBRA assigns preliminary ratings to 12 classes of notes issued by Pagaya AI Debt Grantor Trust 2025-6 and Pagaya AI Debt Trust 2025-6 (collectively “PAID 2025-6”), an unsecured consumer loan ABS transaction. PAID 2025-6 has initial hard credit enhancement levels of 82.04% for the Class A-1 Notes to 1.46% for the Class F Notes. Credit enhancement is comprised of overcollateralization, subordination (except for the Class F Notes), a cash reserve account funded at closing, and excess spread.

KBRA assigns preliminary ratings to 38 classes of mortgage pass-through certificates from Provident Funding Mortgage Trust 2025-4 (PFMT 2025-4).

KBRA assigns a rating of BBB to Kayne Anderson BDC, Inc.'s (NYSE: KBDC or "the company") $40 million floating rate senior unsecured notes due 2028, $60 million 5.80% senior unsecured notes due 2028, and $100 million 6.15% senior unsecured notes due 2030. The rating Outlook is Stable. The proceeds will be used to repay existing indebtedness and general corporate purposes.

KBRA assigns preliminary ratings to six classes of mortgage-backed notes from BRAVO Residential Funding Trust 2025-CES2 (BRAVO 2025-CES2), a $356.1 million RMBS transaction, sponsored by Loan Funding Structure LLC, an affiliate of PIMCO. BRAVO 2025-CES2 consists entirely of closed-end second lien mortgages (CES; 100.0%) and is seasoned approximately three months. The underlying pool comprises of 4,249 loans originated primarily by PennyMac Loan Services, LLC ( 40.8%), Rocket Mortgage, LLC (32.8%), and NewRez LLC (24.2%).

KBRA assigns preliminary ratings to 10 classes of mortgage pass-through notes from Verus Securitization Trust 2025-8 (VERUS 2025-8), a $579.1 million non-prime RMBS transaction. The underlying collateral comprises 1,165 residential mortgages and is characterized by a significant concentration of loans underwritten using alternative income documentation. Borrowers in the subject pool possess a non-zero WA original credit score of 737 and exhibit moderate equity in each mortgaged property, with an original combined LTV (CLTV) ratio of 71.4%. Approximately 42.2% of the loans were exempt from the ATR/QM rule due to being originated for business purposes or underwritten by a CDFI. The remaining portions of the pool were categorized as non-qualified mortgages (Non-QM) under the Ability-to-Repay/Qualified Mortgage (ATR/QM) rule (31.1%), QM: Safe Harbor (25.2%), or categorized as QM: Rebuttable Presumption (1.5%).

KBRA assigns preliminary ratings to 11 classes of mortgage pass-through certificates from EFMT 2025-NQM4, a $384.6 million non-prime RMBS transaction. The underlying collateral, comprising 760 residential mortgages, is characterized by a notable concentration of alternative income documentation, with 80.6% of the loans underwritten using DSCR, bank statements, and asset underwriting documentation types. The majority of loans are either classified as non-qualified mortgages (59.4%) or exempt (40.6%) from the Ability-to-Repay/Qualified Mortgage rule due to being originated for non-consumer loan purposes. LendSure Mortgage Corp. (LendSure), an affiliated originator of Ellington Management Group (“Ellington”) originated 41.3% of the pool.

KBRA is pleased to announce the assignment of preliminary ratings to three classes of FREMF Series 2025-K761 mortgage pass-through certificates and three classes of Freddie-Mac structured pass-through certificates (SPCs), Series K-761. FREMF 2025-K761 is a $1.0 billion CMBS multi-borrower transaction. Freddie Mac will guarantee five classes of certificates issued in the underlying Series 2025-K761 securitization and will deposit the guaranteed underlying certificates into a separate trust that will issue the SPCs.

KBRA assigns preliminary ratings to ten classes of mortgage pass-through certificates from CROSS 2025-H7 Mortgage Trust, an RMBS transaction issued under the CROSS shelf, where Hildene in affiliation with CrossCountry Mortgage and CrossCountry Capital sponsored the transaction. The $564.8 million transaction is collateralized by a pool of 1,178 residential mortgages originated by CCM, including a meaningful concentration of collateral that KBRA considers to be “non-prime”, with fixed-rate mortgages (FRMs) and hybrid adjustable-rate mortgages (ARMs) making up 83.7% and 16.3% of the pool, respectively.

KBRA is pleased to announce the assignment of preliminary ratings to 13 classes of BBCMS 2025-5C37, a $741.5 million CMBS conduit transaction collateralized by 30 commercial mortgage loans secured by 145 properties. The collateral properties are located throughout 40 MSAs, of which the three largest are New York (23.6% of pool balance), Boston (9.4%), and Detroit (6.7%). The pool has exposure to all major property types, with five types representing more than 10.0% of the pool balance: multifamily (26.1%), lodging (22.6%), retail (17.8%), mixed-use (14.2%), and office (11.0%). The loans have in-trust principal balances ranging from $4.5 million to $74.0 million for the largest loan in the pool, Dunbar Apartments (10.0%), a 537-unit, mid-rise multifamily complex located in the Harlem neighborhood of New York City’s borough of Manhattan. The five largest loans, which also include Vertex HQ (9.4%), Mendlowits NYC Collection (8.4%), The Daxton Hotel (6.7%), and Springfield Town Center (6.2%), represent 40.8% of the initial pool balance, while the top 10 loans represent 60.6%.

KBRA releases an updated report tracking key metrics within recurring revenue loan (RRL) securitizations.

KBRA releases research discussing how policy changes in Washington are transferring greater responsibility for funding certain federal programs to state and local governments. The recently enacted tax and spending law known as the One Big Beautiful Bill Act (OBBBA), along with several separate policy proposals, aims to reduce federal expenditures by tightening program requirements and realigning costs. These changes are likely to create budgetary headwinds for many issuers across the municipal market, potentially necessitating difficult fiscal and policy decisions to absorb additional costs.

KBRA releases research examining President Donald Trump's executive order to potentially ease regulatory barriers that have limited defined contribution (DC) retirement plans’ access to alternative investments—a move that could allow millions of retirement savers to invest in an expansive list of such assets. The order aims to have a democratizing effect, as access to alternatives is already a common and growing feature in the retirement accounts of defined benefit (DB) plan savers (typically government employees and legacy corporate pension beneficiaries). This democratization seems profoundly fair, given that alternative investments have historically outperformed comparable public market options, on average. However, as always, not everyone will experience “average” outperformance, and alternative investments also carry higher fees and relative illiquidity, which may dampen rather than brighten some investors’ retirement dreams.

KBRA releases research evaluating the impact of insurance settlements between international insurers and aviation lessors on the aviation asset-backed securities (ABS) sector.

KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the August 2025 servicer reporting period. The delinquency rate among KBRA-rated U.S. private label CMBS increased to 7.9% in August from 7.5% in July. However, the total delinquent plus current but specially serviced loan rate (collectively, the distress rate) remained stable at 10.6%. The conduit multifamily delinquency rate increased 178 basis points (bps) month-over-month (MoM) to 7.2%, largely due to the Park West Village loan ($254 million in six KBRA-rated conduits including $66.5 million in rake certificates in BBCMS 2022-C17), which became delinquent.

KBRA releases research discussing recent strength in retail sales performance amid concerns that tariff-related headwinds may weigh on spending later this year.

KBRA assigns a long-term rating of AA to the Joint Revenue Refunding and Improvement Bonds Series 2025A-1 (AMT), Joint Revenue Refunding and Improvement Bonds SeriesA-2 (AMT) and Joint Revenue Refunding and Improvement Bonds Series 2025B (Non-AMT) issued by the Cities of Dallas and Fort Worth, TX ("the Cities") on behalf of Dallas/Fort Worth International Airport ("DFW" or "the Airport"). Concurrently, KBRA affirms the long-term AA rating on outstanding Joint Revenue and Improvement Bonds previously issued by the Cities on behalf of the Airport. The Outlook is Stable.

KBRA releases its latest 12 Things in Credit report, highlighting timely credit market themes drawn from our weekly podcast, 3 Things in Credit, hosted by KBRA’s Chief Strategist, Van Hesser. Among the wide-ranging topics Van discusses in this issue are spreads versus yields, the July jobs shock, and Maersk’s upbeat earnings report.

KBRA assigns preliminary ratings to ten classes of mortgage-backed notes from BRAVO Residential Funding Trust 2025-NQM8 (BRAVO 2025-NQM8). The $565.7 million RMBS transaction is collateralized by a pool of 1,230 residential mortgages, with fixed-rate mortgages (FRMs) and hybrid adjustable-rate mortgages (ARMs) making up 92.7% and 7.3% of the pool, respectively. Most loans are either classified as non-qualified mortgages (Non-QM) (24.2%) or exempt (49.5%) from the Ability-to-Repay/Qualified Mortgage (ATR/QM) rule due to being originated for non-consumer loan purposes.

KBRA assigns a rating of BBB to Bain Capital Private Credit's ("BCPC" or "the company") $110 million, 5.92% senior unsecured notes due 2028 and $165 million, 6.25% senior unsecured notes due 2030. The rating Outlook is Stable. The proceeds will be used to repay secured debt.

KBRA assigns a long-term rating of AA- to the Pennsylvania Turnpike Commission: Turnpike Revenue Bonds, Series B-1 of 2025; Turnpike Revenue Bonds, Series B-2 of 2025; Turnpike Revenue Refunding Bonds, Third Series of 2025, Sub-series A; and, Turnpike Revenue Refunding Bonds, Third Series of 2025, Sub-series B. KBRA additionally affirms the long-term ratings of AA- for the Commission's outstanding Turnpike Revenue Bonds, A+ for the Commission's outstanding Turnpike Subordinate Revenue Bonds, and AA- for the Commission's outstanding Motor License Fund-Enhanced Turnpike Subordinate Special Revenue Bonds. The Outlook for each obligation is Stable.

KBRA assigns a rating of AAA to Tortoise Energy Infrastructure Corp.’s ("TYG" or the “Fund”) Senior Notes Series VV and Series WW and an A+ rating to TYG’s Mandatory Redeemable Preferred Shares Series J.

KBRA assigns preliminary ratings to four classes of notes issued by Gracie Point International Funding 2025-1, LLC, Series 2025-1.

On August 19, 2025, Portsmouth, VA-based TowneBank (NASDAQ: TOWN)(KBRA Senior Unsecured Debt rating: A-/Stable Outlook) announced a definitive acquisition agreement with Raleigh, NC-based Dogwood State Bank, (OTC: DSBX, "Dogwood", $2.4 billion assets, $2 billion deposits) in an all-stock deal valued at $476.2 million (or $25.04/share of DSBX common stock, based on TOWN’s 15-day average closing stock price of $35.77 on August 18, 2025), reflective of a price to TBV of 2.1x. The merger is expected to close in 1Q26. The proforma bank will have $22 billion in assets, $16 billion in loans, and $19 billion in deposits including the pending acquisition of Old Point Financial Corporation (expected to close September 1, 2025). This transaction would represent three closed acquisitions within a one-year time frame for TOWN.

KBRA assigns a long-term rating of AA+ to the City of Atlanta, Georgia Airport General Revenue Bonds, Series 2025A (Non-AMT) and Series 2025B (AMT) issued for Hartsfield-Jackson Atlanta International Airport. Concurrently, KBRA affirms the long-term rating of AA+ assigned to outstanding General Airport Revenue Bonds and Passenger Facility Charge (PFC) Subordinate Lien Airport General Revenue Bonds. The Outlook on all debt is Stable.

KBRA assigns a AAA rating to the County of Henrico, VA General Obligation Public Improvement Bonds and assigns a AAA rating to outstanding General Obligation bonds. KBRA also assigns a AA+ rating to the Economic Development Authority of Henrico County, VA Revenue Bonds, Series 2025B and assigns a AA+ rating to outstanding appropriation debt. All ratings with a Stable Outlook.

KBRA assigns preliminary ratings to 11 classes of mortgage pass-through notes from J.P. Morgan Mortgage Trust 2025-7MPR (JPMMT 2025-7MPR). The pool comprises 293 first-lien, fixed rate residential mortgage loans with an aggregate principal balance of $393.4 million as of the cut-off date. The pool includes both non-agency (93.4%) and agency-eligible (6.6%) loans. The weighted average original credit score is 765, which is well within the prime mortgage range.

KBRA assigns preliminary ratings to six classes of mortgage-backed notes from OBX 2025-HE2 Trust. OBX 2025-HE2 Trust is an RMBS transaction issued by Onslow Bay Financial LLC (Onslow Bay) as seller/sponsor consisting of first lien (3.2%) and second lien (96.8%) home equity line of credit (HELOC) loans. The underlying pool is seasoned approximately four months and comprises 1,693 loans, with United Wholesale Mortgage, LLC (UWM; 78.9%) and Better Mortgage Corporation (Better Mortgage; 11.9%) as the largest contributing originators. The HELOCs are interest-only (IO) adjustable-rate mortgages (ARMs), with initial draw windows of three (94.8%), five (5.0%) or ten (0.3%) years and IO terms of ten years. After the IO period, most loans feature 20-year (85.3%) or 10-year (14.7%) amortization terms. As of the August 1, 2025 cut-off date, the borrowers in the pool have drawn $216.3 million from a combined credit limit of $255.1 million for an aggregate utilization rate of 84.8%.

KBRA assigns preliminary ratings to 10 classes of mortgage-backed notes from OBX 2025-NQM15 Trust, a $697.3 million non-prime RMBS transaction. The underlying collateral, comprising 1,213 residential mortgages, is characterized by fixed-rate mortgages (FRMs) and hybrid adjustable-rate mortgages (ARMs) making up 91.8% and 8.2% of the pool, respectively. A majority of the loans are either classified as non-qualified mortgages (Non-QM; 50.6%) or exempt (38.8%) from the Ability-to-Repay/Qualified Mortgage (ATR/QM) rule due to being originated for non-consumer loan purposes. There were no originators comprising over 10% of the pool.

KBRA assigns a AA long-term rating with a Stable Outlook to the Anaheim Housing and Public Improvements Authority's ("AHPIA") Revenue Bonds, Series 2025-A (Electric Utility Distribution System Improvements) and the Revenue Refunding Bonds, Series 2025-B (Electric Utility Distribution System Refunding), collectively the "Bonds". The Bonds are being issued by AHPIA on behalf of the City of Anaheim's (the "City") electric distribution system (the "Electric System") to pay for a portion of capital expenditures (via the Series 2025-A bond proceeds); and economically refund outstanding parity debt obligations (Series 2025-B bond proceeds).

KBRA assigns a AAA long-term rating to the City of Indianapolis, Indiana, General Obligation Bonds Series 2022A and Series 2022B (taxable) issued through the Indianapolis Local Public Improvement Bond Bank. The Outlook is Stable.

KBRA releases research on the current trends in CMBS servicer advances, appraisal reductions, and nonrecoverable advances. The report examines some of the servicer advancing (SA), appraisal reduction amounts (ARA), and nonrecoverable advance (NRA) trends over the past three years through June 2025, which can provide a window into next year’s trends.

KBRA releases its second-quarter 2025 U.S. Bank Compendium, providing the latest view of the U.S. banking industry and analysis of 2Q25 results for publicly traded U.S. banks with KBRA ratings.

KBRA assigns ratings of ‘BBB (sf)’ to the Series 2025-GT1 Term Notes from PNMAC GMSR ISSUER TRUST, PennyMac Loan Services, LLC’s (PLS) master trust issuer of notes backed by participation certificates evidencing participation interest in mortgage servicing rights (MSR) on loans underlying Ginnie Mae guaranteed mortgage backed securities. KBRA’s rating on the notes is primarily dependent upon the rating of Private National Mortgage Acceptance Company, LLC (PNMAC), as repurchase guarantor.

KBRA announces the assignment of preliminary ratings to seven classes of MHP 2025-MHIL2, a CMBS single-borrower securitization. The collateral for the transaction is a $425.0 million floating rate, interest-only mortgage loan. The loan is expected to have an initial two-year term with three, one-year extension options and require monthly interest-only payments. The loan will be secured by the borrowers’ fee simple interests in 78 self-storage assets encompassing 4.7 million sf located across 20 states, the five largest of which are California (32.4% of loan balance), Texas (13.5%), Florida (9.9%), Missouri (7.6%), and Colorado (7.0%). As of June 2025, the portfolio was 88.9% leased.

KBRA downgrades the long-term rating to AA-, from AA, for the Pennsylvania Turnpike Commission's outstanding Oil Franchise Tax Senior Revenue Bonds and assigns a long-term rating of AA- to the Commission's Oil Franchise Tax Senior Revenue Bonds, Series A of 2025.

KBRA assigns preliminary ratings to two classes of notes issued by Service Experts Issuer 2025-1 (“SE 2025-1”), a $238.6 million consumer lease ABS transaction. The preliminary ratings reflect initial credit enhancement level of 23.39% for the Class A notes, and 18.03% and for the Class B notes. Credit enhancement consists of overcollateralization, excess spread, a cash reserve account and subordination (except for the Class B notes).

KBRA assigns a rating of BBB to HPS Corporate Capital Solution Fund's ("HCAP" or "the company") $150 million 5.860% senior unsecured notes due August 13, 2028 and $200 million 6.200% senior unsecured notes due August 13, 2030. The rating Outlook is Stable. The proceeds will be used for to repay indebtedness, to make investments in accordance with HCAP's investment strategy and policies and for general corporate purposes.

KBRA assigns preliminary ratings to eight classes of mortgage-backed certificates from Angel Oak Mortgage Trust 2025-9 (AOMT 2025-9), a $288.7 million non-prime RMBS transaction. The underlying collateral, comprised of 567 residential mortgages, is characterized by a significant concentration of loans underwritten using alternative income documentation. All the loans are either classified as non-qualified mortgages (52.6%) or exempt (47.4%) from the Ability-to-Repay/Qualified Mortgage rule due to being originated for non-consumer loan purposes. Angel Oak Mortgage Solutions originated 60.1% of the pool, with no other originator comprising over 10% of the collateral.

KBRA assigns a long-term rating of AA+ to the San Francisco Bay Area Rapid Transit District's (the "District") Sales Tax Revenue Bonds 2025 Refunding Series A. Additionally, KBRA affirms the long-term rating of AA+ and AA for the District's outstanding Senior Lien Sales Tax Revenue Bonds and Junior Lien Sales Tax Obligations (TIFIA loan), respectively. The rating Outlook is Stable.

KBRA assigns preliminary ratings to 59 classes of mortgage-backed notes from GCAT 2025-INV3 Trust. The GCAT 2025-INV3 mortgage loans are secured by first liens on non-owner occupied (NOO) investor properties and second homes. The loans were underwritten to agency guidelines. The pool comprises 974, first-lien, fixed rate residential mortgage loans as of the cut-off date. The pool is characterized by moderate borrower equity in each mortgaged property, as evidenced by the WA original LTV of 75.0%. The weighted average original credit score is 776, which is within the prime mortgage range.

KBRA assigns preliminary ratings to notes issued by BasePoint MCA Securitization II LLC (the “Issuer”). BasePoint MCA Securitization II LLC will issue three classes of Series 2025-1 Notes totaling $102 million.

KBRA assigns preliminary ratings to three classes of notes (the Series 2025-3/4 Notes) from Centersquare Issuer LLC and Centersquare Co-Issuer LLC Series 2025-3/4 (Series 2025-3/4), a colocation data center ABS transaction. The transaction represents the third ABS issuance issued by Centersquare Issuer LLC and Centersquare Co-Issuer LLC (the Co-Issuers). KBRA’s rating analysis incorporates all prior debt issuance of the Co-Issuers. KBRA anticipates affirming the ratings of the Series 2024-1/2 Notes and Series 2025-1/2 Notes with the issuance of the Series 2025-3/4 Notes.

KBRA assigns preliminary ratings to four classes of notes issued by VFI ABS 2025-1, LLC (VFI 2025-1), an equipment ABS transaction.

KBRA assigns a long-term rating of AAA to the State of Wisconsin General Obligation Bonds of 2025, Series B. KBRA additionally affirms the: long-term rating of AAA for the State's outstanding General Obligation Bonds; the short-term rating of K1+ for the State's General Obligation Commercial Paper (CP) Program and General Obligation Extendible Municipal Commercial Paper (EMCP) Program; and, the long-term rating of AA+ for the State's Master Lease Certificates of Participation. The rating outlook for the long-term ratings remains Stable.

KBRA assigns preliminary ratings to 20 classes of mortgage-backed notes from RCKT Mortgage Trust 2025-CES8 (RCKT 2025-CES8).

KBRA assigns preliminary ratings to the Series 2025-1 Class A-1, Class B and Class C Notes (Landmark 2025-1, or the Series 2025-1 Notes) from LMRK Issuer Co. 2 LLC (the Issuer), an asset backed securitization primarily collateralized by ground lease interests underlying billboards.

KBRA assigns preliminary ratings to 40 classes of asset-backed securities from Towd Point Mortgage Trust 2025-CES3 (TPMT 2025-CES3), a $464.3 million RMBS transaction, as of the Cut-off Date, sponsored by CRM 2 Sponsor, LLC and FirstKey Mortgage, LLC (FirstKey). The underlying pool consists of 5,136 closed-end second lien mortgages (CES; 100%) originated by Spring EQ, LLC (Spring EQ; 58.1%), Rocket Mortgage, LLC (Rocket; 21.2%), and NewRez LLC (NewRez; 20.7%). The CES collateral is characterized by fully amortizing, fixed-rate mortgages (FRMs) with a non-zero weighted average original credit score of 738 and an average original term of 245 months and is seasoned approximately one months.

KBRA releases the July 2025 issue of CMBS Trend Watch.

KBRA assigns preliminary ratings to four classes of notes issued by Aqua Finance Issuer Trust 2025-B (“Aqua 2025-B”), an asset-backed securitization collateralized by marine and recreational vehicle contracts as well as home improvement contracts.

KBRA assigns preliminary ratings to 62 classes of mortgage-backed notes from PMT Loan Trust 2025-INV8 (PMTLT 2025-INV8), a prime RMBS transaction sponsored by PennyMac Corp. (PennyMac), an indirect, wholly-owned subsidiary of PennyMac Mortgage Investment Trust (PMT). PMTLT 2025-INV8 comprises 1,039 fixed-rate mortgages (FRMs) with an aggregate principal balance of $386.7 million as of the August 1, 2025 cut-off date. The underlying pool consists of agency-eligible loans that are collateralized by investment properties (85.1%) and second homes (14.9%). The pool is characterized by significant borrower equity in each mortgaged property, as evidenced by the WA original LTV of 74.6%. The weighted average original credit score is 774, which is well within the prime mortgage range.

KBRA assigns preliminary ratings to 67 classes of mortgage pass-through certificates from Sequoia Mortgage Trust 2025-8 (SEMT 2025-8), a $550.3 million prime RMBS transaction. The pool is comprised of 445 first-lien, fully amortizing fixed rate mortgages with 20-year and 30-year maturity terms. The collateral is characterized by a weighted average (WA) original credit score of 779 and moderate borrower equity, with a WA original LTV of 72.3% and WA original CLTV of 72.3%.

KBRA assigns its BBB+ ratings to the Public Finance Authority's $3.4 billion senior lien toll revenue bonds, series 2025 (Georgia SR 400 Express Lanes Project) (the private activity bonds (PAB)), which support the Georgia SR 400 Express Lanes Project. KBRA also assigns its BBB rating to SR 400 Peach Partners, LLC’s $3.9 billion TIFIA loan. The Outlook is Stable.

KBRA assigns preliminary ratings to 7 classes of mortgage pass-through certificates from ADMT 2025-NQM3, a $445.5 million non-prime RMBS transaction. The underlying collateral, comprising 1,285 residential mortgages, is characterized by a significant concentration of loans underwritten using alternative income documentation. Borrowers in the subject pool possess a non-zero WA original credit score of 747 and exhibit notable equity in each mortgaged property, with a WA combined LTV (CLTV) ratio of 66.8%.

KBRA assigns a rating of "BBB+” with Stable Outlook to $175 million 7.75% surplus notes due 2045 (“Notes”) issued by Venerable Insurance and Annuity Company (VIAC) and $175 million 7.75% surplus notes due 2045 issued by Corporate Solutions Life Reinsurance Company (CSLR). VIAC and CSLR are insurance operating subsidiaries of Venerable Holdings, Inc. (Venerable) that have KBRA Insurance Financial Strength Ratings of A with a Stable Outlook. As surplus notes, the Notes are deeply subordinated, and payments thereon are subject to the prior approval of the Iowa Division of Insurance. If any payments are not approved, the payment will be extended until approval is given. Interest will continue to accrue on any unpaid principal, but interest will not accrue on unpaid interest. Given that VIAC’s business is reinsured to CSLR and CSLR is a subsidiary of VIAC, and similar to the existing surplus notes, the CSLR surplus notes were issued to VIAC and mirror the terms of the notes issued by VIAC to investors. The surplus notes were issued in conjunction with Venerable’s transaction to reinsure variable annuity business of certain subsidiaries of Corebridge Financial, Inc. that closed on August 1, 2025.

KBRA assigns preliminary ratings to six classes of notes issued by NMEF Funding 2025-B, LLC (NMEF 2025-B), an equipment ABS.

KBRA announces the assignment of preliminary ratings to five classes of VRTX 2025-HQ, a CMBS single-borrower securitization. The collateral for the transaction is a $600 million portion of a $1.0 billion fixed rate, interest-only first lien mortgage loan. The fixed-rate loan has a five-year term and requires monthly interest-only payments based on an assumed interest rate of 6.25%. The loan is secured by the borrower’s fee simple interest in Vertex HQ , two 15-story, Class-A, LEED Gold office tower containing 1.1 million sf. The building is located in the Seaport neighborhood of downtown Boston. The buildings were developed in 2013 as a built-to-suit corporate headquarters for Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX). KBRA performed a credit estimate on Vertex, and the results of the analysis indicated that Vertex has credit characteristics consistent with an entity with an investment grade rating. Vertex leases all of the office and lab space at the property and represents 96.8% of base rent. The tenant recently renewed its lease through 2044, or approximately 14 years beyond the loan term.

KBRA assigns preliminary ratings to ten classes of mortgage pass-through certificates from CROSS 2025-H6 Mortgage Trust, an RMBS transaction issued under the CROSS shelf, where Hildene in affiliation with CrossCountry Mortgage and CrossCountry Capital sponsored the transaction. The $496.4 million transaction is collateralized by a pool of 968 residential mortgages originated by CCM, including a meaningful concentration of collateral that KBRA considers to be “non-prime”, with fixed-rate mortgages (FRMs) and hybrid adjustable-rate mortgages (ARMs) making up 84.6% and 15.4% of the pool, respectively.

KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the July 2025 servicer reporting period. The delinquency rate among KBRA-rated U.S. private label commercial mortgage-backed securities (CMBS) in July increased to 7.5% from 7.3% in June. However, the total delinquent plus current but specially serviced loan rate (collectively, the distress rate) only increased 7 basis points (bps) to 10.6%. The conduit mixed-use delinquency rate increased 146 bps month-over-month (MoM) to 13.2%, largely due to the Columbus Square Portfolio ($293.5 million in three conduits (KBRA-rated) out of $361.2 million total), which became delinquent.

House prices in the Netherlands have reached record highs, defying expectations that the post-pandemic surge would taper off amid steep interest rate hikes from 2022 to 2023 aimed at curbing inflation. Fears of demand falling off have proven unfounded, as the housing market continues to show resilience. Interest rates are gradually declining from their recent highs, while a strong economy and tight labour market have helped offset affordability concerns. Further, the Netherlands’ resilient, borrower-friendly mortgage framework continues to provide a stable environment for existing homeowners. This KBRA report examines the latest trends in the Dutch housing market and serves as an update to our previous publication (see Dutch Housing Market: Increased Rates Leave Their Mark).

KBRA assigns a long-term rating of AA+, with a Stable Outlook to the City of New York (the City) General Obligation Bonds, Fiscal 2026 Series A, B and C, consisting of Tax-Exempt Bonds, Subseries A-1, Tax-Exempt Bonds, Subseries B-1, Taxable Bonds, Subseries B-2, Tax-Exempt Bonds, Subseries C-1, and Taxable Bonds, Subseries C-2. At June 30, 2025, there was approximately $46.72 billion of General Obligation (G.O.) Bonds outstanding.

KBRA issues a no downgrade confirmation in relation to the proposed merger of Tortoise Energy Infrastructure Corporation ("TYG") and Tortoise Sustainable & Social Impact Term Fund ("TEAF"), with TYG being the remaining entity. The request for Rating Agency Confirmation ("RAC") was initially received on June 26, 2025. The analysis indicates that the proposed merger in and of itself will not result in a downgrade, qualification or withdrawal of KBRA’s current ratings issued in connection with the outstanding Senior Notes and Mandatory Redeemable Preferred Stock (“MRPS”).

As part of the European Union’s (EU) broader REPowerEU strategy to reduce dependence on Russian energy and under the terms of the recently announced U.S.-EU trade agreement, the EU has committed to purchasing $750 billion worth of U.S. energy over the next three years to meet demand. Abundant low-cost natural gas across the Permian, Eagle Ford, and Haynesville basins—combined with modest liquefaction fees and close proximity to liquefied natural gas (LNG) export facilities on the U.S. Gulf Coast (USGC)—continue to make U.S. LNG incredibly competitive. While there is currently no impact to KBRA’s portfolio of LNG export facilities due to their contracted nature, future projects could be affected if they seek to monetize merchant cash flows.

KBRA releases research discussing the potential impact of Texas' new Educational Savings Account (ESA) program (i.e., private school vouchers) on public school district credit quality.

KBRA releases its Q2 2025 Middle Market Borrower Surveillance Compendium. Private credit may well be in a “Waiting for Godot” moment—marked by growing anticipation of some unknown reckoning that continues to be deferred. As the industry continues to adapt to various market uncertainties, KBRA notes signs of improving credit quality for some borrowers, while still observing a subset of borrowers that face maturities over the next two years without the growth their sponsors and borrowers had expected.

KBRA assigns a long-term rating of AA to the Department of Water and Power of the City of Los Angeles (LADWP or the Department) Water System Revenue Bonds, 2025 Series A and 2025 Series B. Concurrently, KBRA affirms the AA rating on the Department's Water System Revenue Bonds, approximately $5.79 billion of which were outstanding as of August 1, 2025. The rating Outlook on all Water System debt is Stable.