The CRE loan and CMBS Rating Methodology supplements the General Structured Finance Rating Methodology and should be read together with the Counterparty Risk Methodology.

The methodology applies to both the initial ratings and the monitoring of CRE instruments, primarily of income-generating CRE, and non-granular CMBS. CRE instruments exposed to assets under construction and refurbishment, which imply business risks beyond the cash flow projected for existing or future lease contracts, will be assessed on a case-by-case basis.

Scope expects no ratings impact by the changes.

The final methodology can be downloaded here or on www.scoperatings.com.

Summary of the non-material changes

1. Introduction of a more explicit analytical framework for assessing the credit quality of unrated tenants
    
2. Removal of leasing commission as an individual cost line
    
3. Liquidity enhancement requirements aligned to the General Structured Finance methodology
    
4. Clarification of analysis approach to CMBSs secured by granular pool of loans
    
5. Removal of the “CRE loan maximum recovery” framework
    
6. Addition of Commercial Ground Lease descriptive section
    
7. Editorial changes

Given the non-material changes applied, no request for comments were made for the update.