News Column

Fitch Affirms FREMF 2012-K19 & Freddie Mac Structured Pass-Through Certificates K-019

June 25, 2014

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed six classes of FREMF 2012-K19 multifamily mortgage pass-through certificates and three classes of Freddie Mac structured pass-through certificates, series K-019. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The affirmations are the result of stable performance of the underlying collateral since issuance. As of the June 2014 distribution date, the pool's aggregate principal balance has been reduced by 1.6% to $1.25 billion from $1.27 billion at issuance. Fitch has designated one Fitch Loan of Concern (2.3%), which is also on the master servicer's watchlist; no loans are delinquent or in special servicing.

The affirmations of the Freddie Mac series K-019 certificates are based on the pass-through nature of the certificates, as they are dependent on the underlying ratings of the corresponding classes of FREMF 2012-K19.

The largest loan of the pool (8.5% of the pool), is secured by a 372-unit, class-A, midrise apartment building located in Brooklyn, NY. The property, Brooklyn Gold, was developed in 2010 in conjunction with an adjoining apartment building, 277 Gold, which is not part of the collateral. The property's occupancy has remained stable since issuance at approximately 95% as of year-end 2013.

The second largest loan (4.2%), The Cork Factory, is a 297-unit apartment complex located in Pittsburg, PA. The buildings were built in 1901, used as a cork factory until 1974 and then converted into an apartment building in 2006. As per the property's rent roll, occupancy increased to 96% as of February 2014 from 92.9% as of year-end 2012.

The Fitch Loan of Concern and seventh largest loan, Reveille Ranch (2.3%), is secured by a 372-unit, 971-bed student housing community located in Bryan, TX, located 100 miles east of Austin and 100 miles northwest of Houston. The property is located one mile from the Texas A&M University campus. The servicer-reported occupancy was up to 77.3% as of year-end 2013 from 67.9% as of year-end 2012. However, the property's net operating income declined approximately 13% in 2013 from 2012 due to a 14% increase in vacancy loss and a 26% increase in real estate taxes as a result of a reassessment.

RATING SENSITIVITY

The Rating Outlooks for all classes remains Stable. Due to the recent issuance of the transaction and stable performance, Fitch does not foresee positive or negative ratings migration until a material economic or asset level event changes the transaction's overall portfolio-level metrics. Additional information on rating sensitivity is available in the 'FREMF 2012-K19 Multifamily Mortgage Pass-Through Certificates and Freddie Mac Structured Pass-Through Certificates, Series K-019' (Oct. 10, 2012), available at www.fitchratings.com.

Fitch affirms the following classes as indicated:

FREMF 2012-K19 Multifamily Mortgage Pass-Through Certificates

--$173.7 million class A-1 at 'AAAsf', Outlook Stable;

--$885 million class A-2 at 'AAAsf', Outlook Stable;

--$66.8 million class B at 'Asf', Outlook Stable;

--$31.8 million class C at 'BBB+sf', Outlook Stable;

--$1.1 billion* class X1 at 'AAAsf', Outlook Stable;

--$1.1 billion* class X2-A at 'AAAsf', Outlook Stable.

Fitch does not rate the class D and the interest-only classes X2-B and X3 certificates.

Freddie Mac Structured Pass-Through Certificates, Series K-019

--$173.7 million class A-1 at 'AAAsf', Outlook Stable;

--$885 million class A-2 at 'AAAsf', Outlook Stable;

--$1.1 billion* class X1 at 'AAAsf', Outlook Stable.

Fitch does not rate the interest-only class X3 certificates.

*Notional and interest-only.

A comparison of the transaction's Representations, Warranties, and Enforcement (RW&E) mechanisms to those of typical RW&Es for the asset class is available in the following report:

--'FREMF 2012-K19 Multifamily Mortgage Pass-Through Certificates and Freddie Mac Structured Pass-Through Certificates, Series K-019-- Appendix' (Oct. 10, 2012).

Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 11, 2013 report, 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is available at 'www.fitchratings.com' under the following headers:

Structured Finance then CMBS then Criteria Reports

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 20, 2014);

--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 11, 2013).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748821

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724961

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=836540

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.



Fitch Ratings

Primary Analyst

Sean Gibbs, +1 212-908-0311

Associate Director

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

Committee Chairperson

Britt Johnson, +1 312-606-2341

Senior Director

or

Media Relations:

Sandro Scenga, +1 212-908-0278

sandro.scenga@fitchratings.com

Source: Fitch Ratings


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