Fitch Rates FREMF 2012-K711 & Freddie Mac SPCs, Series K-711

NEW YORK--(BUSINESS WIRE)--Fitch Ratings has rated FREMF 2012-K711 multifamily mortgage pass-through certificates and Freddie Mac structured pass-through certificates, series K-711 as follows:

FREMF 2012-K711 Multifamily Mortgage Pass-Through Certificates

--$110,000,000 class A-1 'AAAsf'; Outlook Stable;

--$1,042,049,000 class A-2 'AAAsf'; Outlook Stable;

--$1,152,049,000* class X1 'AAAsf'; Outlook Stable;

--$1,152,049,000* class X2-A 'AAAsf'; Outlook Stable;

--$89,680,000 class B 'A-sf'; Outlook Stable;

--$34,493,000 class C 'BBBsf'; Outlook Stable.

Freddie Mac Structured Pass-Through Certificates, Series K-711

--$110,000,000 class A-1 'AAAsf'; Outlook Stable;

--$1,042,049,000 class A-2 'AAAsf'; Outlook Stable;

--$1,152,049,000* class X1 'AAAsf'; Outlook Stable.

*Notional amount and interest only.

Of the FREMF 2012-K711 multifamily mortgage pass-through certificates, Fitch did not rate the $227,650,919 interest-only class X2-B, the $227,650,919 interest-only class X3 or the $103,477,919 million class D. Of the Freddie Mac structured pass-through certificates, series K-711, Fitch did not rate the $227,650,919 interest-only class X3.

The FREMF 2012-K711 multifamily mortgage pass-through certificates (FREMF 2012-K711) represent the beneficial interests in a pool of 76 commercial mortgages secured by 76 properties. The Freddie Mac structured pass-through certificates, series K711 (Freddie Mac SPC K711) represent a pass-through interest in the corresponding class of securities issued by FREMF 2012-K711. Each Freddie Mac SPC K711 security has the same designation as its underlying FREMF 2012-K711 class. All loans were originated by various seller/servicers according to the guidelines of Freddie Mac Capital Markets Execution (CME) product. The certificates follow a sequential-pay structure.

One loan (Gilbert Manor) has been removed from the pool due to its location in an area severely impacted by Hurricane Sandy. The borrower has not been able to confirm whether or not the property has sustained material damage from Hurricane Sandy. The tables and calculations do not reflect the removal of this loan; however, Fitch has confirmed the removal of this loan will not impact the ratings.

Fitch reviewed a comprehensive sample of the transaction's collateral, including site inspections on 73% of the properties by balance and cash flow analysis of 75% of the pool.

The transaction has a Fitch stressed debt service coverage ratio (DSCR) of 1.07x, a Fitch stressed loan-to value (LTV) of 114.5%, and a Fitch debt yield of 7.32%. Fitch's aggregate net cash flow represents a variance of 5.46% to issuer cash flows.

The Master Servicer will be Wells Fargo Bank N.A., rated 'CMS2' by Fitch. The Special Servicer will be Wells Fargo Bank N.A., rated 'CSS2-' by Fitch.

The presale report is available at 'www.fitchratings.com'.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions', Aug. 8, 2012;

--'U.S. Commercial Mortgage Servicer Rating Criteria', Feb. 18, 2011;

--'Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions', Dec. 21, 2011;

--'Global Structured Finance Rating Criteria', Jun. 6, 2012;

--'Criteria for Special-Purpose Vehicles in Structured Finance Transactions', May 30, 2012.

Applicable Criteria and Related Research:

Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=685995

U.S. Commercial Mortgage Servicer Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=584005

Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=662869

Criteria for Special-Purpose Vehicles in Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=680591

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