Fitch Affirms FREMF 2013-K32 and Freddie Mac Pass-Through Certificates, Series K-032

NEW YORK--()--Fitch Ratings has affirmed six classes of FREMF 2013-K32 multifamily mortgage pass-through certificates and three classes of Freddie Mac structured pass-through certificates, series K-032. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The affirmations reflect stable portfolio performance since issuance. As of the August 2014 distribution date, the pool's aggregate principal balance has been reduced by 0.8% to $1.5 billion from $1.51 billion at issuance.

One loan (Columbia Towers) has transferred to special servicing since issuance. The loan is secured by a 65-unit, 5-story apartment building located in Bridgeport, CT (between Stamford and New Haven, CT). The $7.1 million loan (0.5% of the pool) transferred to special servicing in January 2014 due to payment default.

The loan is now current, and occupancy was 96.9% as of June 2014. However, per the special servicer, negotiations are in process for payment of previous default interest, which may result in a longer stay with the special servicer. It is anticipated that the loan will return to the master servicer after negotiations are complete.

There are no delinquent loans in the pool as of the August 2014 distribution date.

The largest loan in the pool (6.8%) is secured by Tesoro at Crescent Village, a 380-unit garden-style apartment complex located in San Jose, CA. The property was built in 2012 and is the first of five phases to be completed within the larger Crescent Village development. Amenities are shared among all five phases and include the following: five saltwater pools and spas, a fitness center with a spin, yoga and aerobics room, a five-acre park, a clubhouse, internet cafe, a movie theater with seating for 23, a basketball court and two tennis courts. The subject began leasing in April 2012, stabilized in February 2013, and is performing with occupancy at 94% as of March 2014.

RATING SENSITIVITY

The Rating Outlooks on all classes remain 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 2013-K32 Multifamily Mortgage Pass-Through Certificates and Freddie Mac Structured Pass-Through Certificates, Series K-032' (Nov. 18, 2013) new issue report, available at www.fitchratings.com.

Fitch affirms the following classes:

FREMF 2013-K32 Multifamily Mortgage Pass-Through Certificates

--$244 million class A-1 at 'AAAsf'; Outlook Stable;

--$1 billion class A-2 at 'AAAsf'; Outlook Stable;

--$1.3 billion* class X1 at 'AAAsf'; Outlook Stable;

--$1.3 billion* class X2-A at 'AAAsf'; Outlook Stable;

--$90.8 million class B at 'A-sf'; Outlook Stable;

--$37.8 million class C at 'BBBsf'; Outlook Stable.

Freddie Mac Structured Pass-Through Certificates, Series K-032

--$244 million class A-1 at 'AAAsf'; Outlook Stable;

--$1 billion class A-2 at 'AAAsf'; Outlook Stable;

--$1.3 billion* class X1 at 'AAAsf'; Outlook Stable.

*Notional amount and interest only.

Of FREMF 2013-K32, Fitch does not rate the $242 million interest-only class X2-B, the $242 million interest-only class X3, or the $113.4 million class D. Of the Freddie Mac Structured Pass-Through Certificates, Series K-032, Fitch does not rate the $242 million interest-only class X3.

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 2013-K32 Multifamily Mortgage Pass-Through Certificates and Freddie Mac Structured Pass-Through Certificates, Series K-032 --Appendix' (Nov. 18, 2013).

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 >> CMBS >> Criteria Reports

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

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (Aug. 4, 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=754389

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=860634

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.

Contacts

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:
Christopher Bushart, +1-212-908-0606
Senior Director
or
Alyssa Castelli, +1-212-908-0540
Media Relations, New York
alyssa.castelli@fitchratings.com

Sharing

Contacts

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:
Christopher Bushart, +1-212-908-0606
Senior Director
or
Alyssa Castelli, +1-212-908-0540
Media Relations, New York
alyssa.castelli@fitchratings.com