NEW YORK--(BUSINESS WIRE)--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. There are no delinquent loans in the pool as of the July 2015 distribution date. The pool's aggregate principal balance has been reduced by 1.7% to $1.49 billion from $1.51 billion at issuance. There is one loan on the servicer watch list, which is also a Fitch Loan of Concern (0.5% of the pool).
The only Fitch Loan of Concern (Columbia Towers) is also the only loan in the pool to transfer to special servicing since issuance. The loan is secured by a 65-unit, five-story apartment building located in Bridgeport, CT (between Stamford and New Haven, CT). The $7 million loan (0.5% of the pool) transferred to special servicing in January 2014 due to payment default. The loan transferred back to the master servicer in April 2015 and remains current. As of year-end (YE) 2014, occupancy and DSCR were 95% and 0.98x, respectively.
The largest loan in the pool (6.7%) 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 YE 2014.
RATING SENSITIVITIES
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.
DUE DILIGENCE USAGE
No third-party due diligence was provided or reviewed in relation to this rating action.
Fitch has affirmed the following ratings:
FREMF 2013-K32 Multifamily Mortgage Pass-Through Certificates
--$230 million class A-1 at 'AAAsf'; Outlook Stable;
--$1 billion class A-2 at 'AAAsf'; Outlook Stable;
--$1.2 billion* class X1 at 'AAAsf'; Outlook Stable;
--$1.2 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
--$230 million class A-1 at 'AAAsf'; Outlook Stable;
--$1 billion class A-2 at 'AAAsf'; Outlook Stable;
--$1.2 billion* class X1 at 'AAAsf'; Outlook Stable.
*Notional amount and interest only.
Of the FREMF 2012-K32 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-K032, Fitch does not rate 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 is available at www.fitchratings.com.
Applicable Criteria
Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria (pub. 10 Dec 2014)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608
Related Research
FREMF 2013-K32 Multifamily Mortgage Pass-Through Certificates and Freddie Mac Structured Pass-Through Certificates, Series K-032 - Appendix
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=718018
Additional Disclosures
Dodd-Frank Rating Information Disclosure Form
https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=989462
Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=989462
Endorsement Policy
https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31
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