Argentic risk retention certificate rating affirmed as KBRA maintains BBB- on $17.8 million tranche

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Argentic rating affirmed BBB-

Highlights

KBRA affirms BBB- (sf) rating on the $17.8 million Argentic Risk Retention Pass Through Certificates, MOA 2020-WC54 E after surveillance review.
As of the October 2026 remittance period, 3.2% of the pool is specially serviced and delinquent, with eight K-LOCs totaling 16.8% of the pool.
KBRA notes the rating remains dependent on underlying collateral and WFCM 2019-C54 performance, while risk retention rules remain untested and may pose regulatory risks.

Surveillance review and collateral performance

As reported by Kroll Bond Rating Agency, the outstanding rating on Argentic Risk Retention Pass Through Certificates, MOA 2020-WC54 E remains at BBB- (sf) after a surveillance review of the underlying transaction. KBRA said pool performance has worsened slightly since securitization, including a rise in the number of K-LOCs, but the change is not large enough to justify a rating action at this time.

As of the October 2026 remittance period, the pool has one specially serviced loan, equal to 3.2% of the pool balance, and that loan is 60 or more days delinquent. KBRA identified eight K-LOCs representing 16.8% of the pool, including the specially serviced asset, and said two of those loans, or 4.8% of the pool, carry estimated losses.

Excluding K-LOCs with estimated losses, the transaction’s weighted average KLTV stands at 108.8%, compared with 109.2% at the last review and 105.8% at securitization. The KDSC is 2.02x, compared with 1.95x at the last review and 2.02x at securitization.

Rating dependence and regulatory risks

The rating on the pass through certificate remains directly and solely dependent on the rating of its underlying collateral certificate. In turn, that underlying certificate’s rating depends on the performance of the WFCM 2019-C54 CMBS conduit transaction, including the credit behavior of the underlying loans and the operating performance of the properties securing them.

KBRA also said the scope and interpretation of risk retention rules remain largely untested in legal or regulatory proceedings. Any adverse interpretation or action by legal or regulatory authorities could lead to a qualification, change or withdrawal of the rating on the pass through certificate.

Our earlier coverage of Hainan Rubber’s proposed subordinated perpetual sustainable securities explained why the notes were rated BBB- and positioned below the issuer rating due to their junior ranking and coupon deferral features. We also summarized the agency’s rationale around leverage, liquidity, and expected support from the state-linked parent structure, outlining the key balance-sheet and sector factors that could influence the credit profile over time.

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