MGM Resorts International: DBRS Morningstar assigns provisional ratings to BX Commercial Mortgage Trust 2021-VIV5



DBRS, Inc. (DBRS Morningstar) assigned provisional ratings to the following categories of Commercial Mortgage Certificates, Series 2021-VIV5 (the Certificates) to be issued by BX Commercial Mortgage Trust 2021-VIV5 (BX 2021-VIV5 or the Issuer).

Class A to AAA (sf)

Class X to AAA (sf)

All trends are stable. Class X is an interest-only (IO) class with a notional balance.

The BX 2021-VIV5 transaction represents the securitization of approximately $ 113.3 million in pari passu senior A banknotes held by Societe Generale Financial Corporation.

The guarantees of this transaction are certain elements of a $ 3.0 billion first mortgage loan encumbering both the MGM Grand and Mandalay Bay (MGM/ Mandalay) properties at Las Vegas. The godfathers, Blackstone Real Estate Income Trust (BREIT) and MGP, along with certain other parties, have formed a joint venture (JV) to acquire the MGM/ Mandalay properties for an aggregate purchase price of 4.6 billion dollars ($ 471,892 per room). Borrowers, Mandalay PropCo, LLC and MGM Grand PropCo, LLC (which are subsidiaries of the JV), subsequently signed a 30-year triple net main lease with two 10-year renewal options with the MGM/ Mandalay Tenant, a wholly owned subsidiary of MGM Resorts.

Due to the market volatility caused by the current coronavirus disease pandemic (COVID-19), the Issuer initially chose to securitize only certain subordinate components of the MGM/ Full Mandalay loan via the BX Commercial Mortgage Trust Operation 2020-VIVA (BX 2020-VIVA). The Issuer then chose to securitize additional components of the entire loan via the securitizations BX 2020-VIV2, BX 2020-VIV3, BX 2020-VIV4 and BX 2021-VIV5. The BX 2021-VIV5 trust, like the BX 2020-VIV2, BX 2020-VIV3 and BX 2020-VIV4 trusts, will not have its own master or special service; the captain and special services of the BX 2020-VIVA trust carry out these tasks.

The 3,000 billion dollars the whole loan previously included $ 1.634 billion A notes, $ 804.4 million of notes if, and $ 561.4 million notes of do. The Issuer then chose to further subdivide the B Notes into $ 430.1 million senior B grades and $ 374.3 million of junior B grades. The mortgage components initially securitized via the BX 2020-VIVA transaction have been $ 561.4 million C notes plus a handset $ 1.0 million of A and B scores for a total of $ 562.4 million. The mortgage components securitized via the BX 2020-VIV2 operation have been $ 374,147 million of junior B grades plus a handset $ 1.003 million of senior A and B grades for a total of $ 375,150 million. The mortgage loan components securitized via the BX 2020-VIV3 operation have been $ 429.715 million senior B grades plus $ 1,000 million of A grades for a total of $ 430.715 million. The mortgage components securitized via the BX 2020-VIV4 transaction have been $ 550,000 million of senior A grades. The mortgage components currently being securitized via the BX 2021-VIV5 transaction are $ 113.347 million of senior A grades.

DBRS Morningstar has reviewed certain updated historical performance information provided by the Issuer for the MGM / Mandalay Bay Properties. As expected, operating cash flow continues to be significantly depressed from its 2019 levels based on the past 12 months (Q-12) ended June 2021 The figures. However, according to other analyzes recently Las Vegas hotel casino properties, MGM/ Mandalay continues to show a trend of recovery month over month. For example, the EBITDAR-to- of the propertyMaster Rent coverage rate improved to 0.59 times (x) in the completed T-12 June 2021 0.19x in the completed T-12 March 2021.

Despite the continuing uncertainty over the short to medium term, DBRS Morningstar believes that the mortgage loan that acts as collateral for certificates has unique structural features that provide additional protection for bondholders. Primarily, the head lease structure protects the mortgage loan from direct exposure to the volatility of property operating cash flows. In the alternative, the operation benefits from a guarantee provided by MGM Resorts, which covers the payment and execution of the MGM/ The monetary obligations of the tenant of Mandalay and certain other obligations under the head lease agreement. In addition to the payment and performance guarantee, MGM Resorts executed a shortfall guarantee in favor of the lender for the mortgage loan.

Under the terms of the main lease, the MGM/ The Mandalay tenant must make a first main lease payment of $ 292 million per year, with $ 159 million awarded to the MGM Grand and $ 133 million assigned to Mandalay Bay. Head lease payment increases 2.0% per annum in years 2 to 15 of the initial lease term, then the highest 2.0% and CPI (with CPI capped at 3.0 %) for the remainder of the initial lease term. There has been no discussion to date regarding a restructuring of the Master Lease Agreement.

The DBRS Morningstar loan-to-value ratio of 65.97%, based on a capitalization rate of 9.69% and a final valuation of $ 4.54 billion, represents a prudent leverage point with the ability to resist a substantial drop in market value realized before the depreciation of the mortgage loan. In addition, the borrowing sponsors of the transaction, BREIT (49.9%) and MGP (50.1%), are well-capitalized institutional sponsors who have contributed $ 1.6 billion in equity to acquire the properties. Given this position in equities, DBRS Morningstar believes that BREIT and MGP remain strongly encouraged to continue to keep their obligations up to date under the mortgage loan.

The mortgage loan bears interest only for the first 10 years of its 12-year term and does not benefit from amortization deleveraging for the first 10 years of the term.

A description of how DBRS Morningstar views ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social and Governance Risk Factors in Credit Ratings at https: / / 373262.

All ratings are monitored, which may result in a rating downgrade, downgrade, review, confirmation or termination by DBRS Morningstar.

For supporting data and more information on this transaction, please log on to DBRS Morningstar provides in-depth analysis and commentary on the DBRS Viewpoint platform.


All figures are in we dollars, unless otherwise specified.

With respect to due diligence services, DBRS Morningstar has received ABS Due Diligence-15E (Form-15E), which contains a description of the information that a third party has reviewed as part of the due diligence services and a summary. conclusions and conclusions. Although the due diligence services described in Form 15E are not part of the DBRS Morningstar methodology, DBRS Morningstar has used the data file described in the Independent Accountant’s Report in its analysis to determine the ratings referenced herein.

The primary methodology is the North American Single Asset / Single Borrower Rating Methodology (March 2, 2021), which can be found on under Methodologies and Criteria. For a list of structured finance related methodologies that may be used during the rating process, please see the DBRS Morningstar Global Structured Finance Related Methodologies document, which can be found on in the Commentary tab under Regulatory Affairs. Please note that all of the related methodologies listed in a Core Structured Finance asset class methodology cannot be used to assess or monitor an individual structured finance or debt security.

For more information on rating methodologies and coronavirus disease (COVID-19), please see the following DBRS Morningstar press release:

For more information on structured finance rating methodologies and coronavirus disease (COVID-19), please see the following DBRS Morningstar press release:

The rated entity or its related entities participated in the rating process for this rating action. DBRS Morningstar has had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

Please see the related appendix for more information on the sensitivity of the assumptions used in the rating process.

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Date Issued	Debt Rated	Action	Rating	Trend	Attributesi

United States = Principal Analyst based in the United States

CA = Lead Analyst based at Canada

EU = Lead Analyst based in the EU

UK = Senior analyst based at UK

E = EU approved

U = UK approved

Unsolicited participation with access

Unsolicited participation without access

Unsolicited Non-participant

22-Sep-21 	Commercial Mortgage Pass-Through Certificates, Series 2021-VIV5, Class A	Provis.-New	AAA (sf)	Stb	US
22-Sep-21 	Commercial Mortgage Pass-Through Certificates, Series 2021-VIV5, Class X	Provis.-New	AAA (sf)	Stb	US



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