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Fitch Affirms FREMF 2012-K20 & Freddie Mac Structured Pass-Through Certificates, Series 2012-K020

July 31, 2014

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed six classes of FREMF 2012-K20 multifamily mortgage pass-through certificates and Freddie Mac structured pass-through certificates, series 2012-K020 as follows:

FREMF 2012-K20 Multifamily Mortgage Pass-Through Certificates

--$178.6 million class A-1 at 'AAAsf'; Outlook Stable;

--$899.7 million class A-2 at 'AAAsf'; Outlook Stable;

--$1.078 billion* class X1 at 'AAAsf'; Outlook Stable;

--$1.078 billion* class X2-A at 'AAAsf'; Outlook Stable;

--$71.4 million class B at 'A-sf'; Outlook Stable;

--$32.5 million class C at 'BBBsf'; Outlook Stable.

Freddie Mac Structured Pass-Through Certificates, Series 2012-K020

--$178.6 million class A-1 at 'AAAsf'; Outlook Stable;

--$899.7 million class A-2 at 'AAAsf'; Outlook Stable;

--$1.078 billion* class X1 at 'AAAsf'; Outlook Stable.

*Notional amount and interest only.

Of the FREMF 2012-K20 multifamily mortgage pass-through certificates, Fitch does not rate the interest-only class X2-B, the interest-only class X3 or class D. In addition, of the Freddie Mac structured pass-through certificates, series 2012-K020, Fitch does not rate interest-only class X3.

KEY RATING DRIVERS

The affirmations are based on stable performance of the underlying collateral pool since issuance. The pool has had no specially serviced or delinquent loans since issuance. As of the July 2014 distribution date, the pool's aggregate principal balance has been reduced by 1.5% to $1.28 billion from $1.3 billion at issuance. Fitch has designated one loan (1.1% of the pool) as a Fitch Loan of Concern, which is also on the master servicer's watch list. The loan is secured by a 256-unit garden apartment complex built in 1974 and located in Little Rock, AR. In 2012 there were several fires at the property. As a result the subject is struggling from fire damage to over 60 units and 3 separate insurance claims were filed. The master servicer's estimate on total damages is higher than the loan balance; a portion of the claims have been paid as of July 2014, but the final settlement value for all claims is pending. The NOI DSCR has declined to 0.63x as of March 2014 from 1.49x at issuance based on issuer's underwriting. Occupancy was 65% as of March 2014.

RATING SENSITIVITY

The Rating Outlooks on classes A-1, A-2, B, C, and interest only class X1 remain Stable. Due to the recent issuance of the transactions and stable performance, Fitch does not foresee positive or negative ratings migration until a material economic or asset level event changes each transaction's overall portfolio-level metrics. Additional information on rating sensitivity is available in the 'FREMF 2012-K20 multifamily mortgage pass-through certificates and Freddie Mac structured pass-through certificates, series 2012-K020' (Sept. 4, 2012) presale report, available at www.fitchratings.com.

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-K20 Multifamily Mortgage Pass-Through Certificates and Freddie Mac Structured Pass-Through Certificates, Series K-020 -- Appendix' (Sept. 4, 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=843277

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

Martin Nunnally, +1 212-908-0871

Associate Director

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

Committee Chairperson

Mary MacNeill, +1 212-908-0785

Managing Director

or

Media Relations:

Sandro Scenga, +1 212-908-0278

sandro.scenga@fitchratings.com

Source: Fitch Ratings


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