Moody's Assigns Aaa Rating to Greystone CRE Notes 2025-FL4, LLC Commercial Real Estate CLO

Strategic Insights -

Moody's Investors Service has assigned an Aaa rating to the Class A notes issued by Greystone CRE Notes 2025-FL4, LLC, a managed cash flow commercial real estate CLO. The transaction has a 36-month reinvestment period, ending in May 2028, and is collateralized by 28 commercial real estate loans, totaling $901,341,267. The initial asset portfolio consists of 100% floating rate loans, with 98.9% of the assets having mortgage rate caps and 100% of the assets having index floors.

Key Takeaways:

  • The transaction is a managed cash flow commercial real estate CLO with a 36-month reinvestment period, ending in May 2028.
  • The transaction is collateralized by 28 commercial real estate loans, totaling $901,341,267, with an initial asset portfolio consisting of 100% floating rate loans.
  • 98.9% of the assets have mortgage rate caps with a weighted average cap rate of 4.04%, and 100% of the assets have index floors with a weighted average floor rate of 3.72%.
  • The effective weighted average spread to the borrower, with interest rate caps considered, is 7.37%, and considering interest rate floors, is 7.05%.
  • The notes on the transaction are floating rate indexed to 1-M SOFR, and the transaction permits certain administrative and criteria-based loan modifications during both the reinvestment and amortization periods.
  • The transaction has a Moody's weighted average loan-to-value (LTV) ratio of 113.4%, with approximately 10.4% of the total pool being acquisition financing loans and 89.6% being refinancing loans.
  • The top property type exposure is Multifamily at 100%, with the top ten assets accounting for 58.8% of the total loan pool.
  • Greystone Bridge Lending Fund Manager LLC will act as the collateral manager of the CRE CLO, and Greystone Servicing Company LLC will act as the servicer, special servicer, and backup advancing agent on the underlying collateral.

Statistics:

  • Total par at closing: $901,341,267
  • Number of obligors: 28
  • Weighted Average Rating Factor (WARF): 5000
  • Weighted Average Recovery Rate (WARR): 58.50%
  • Weighted Average Life (WAL): 4.75 years
  • Weighted Average Spread (WAS): 2.50%
  • Pair-wise asset correlation: 35.0%
  • Moody's LTV ratio: 113.4%
  • Acquisition financing loans: 10.4%
  • Refinancing loans: 89.6%

Sources:

  • Moody's Ratings (Moody's), "Moody's Assigns Aaa Rating to Greystone CRE Notes 2025-FL4, LLC Commercial Real Estate CLO" (no date)
  • "Moody's Approach to Rating SF CDOs" (published in July 2024)

(https://ratings.moodys.com/rmc-documents/425578)