Fitch Affirms FREMF 2012-K18 & Freddie Mac Structured P-T Certs K-018

NEW YORK--()--Fitch Ratings has affirmed five classes of Freddie Mac 2012-K18 multifamily mortgage pass-through certificates and three classes of Freddie Mac structured pass-through certificates, K-018. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The affirmations of Freddie Mac 2012-K18 are based on the stable performance of the underlying collateral. As of the October 2015 distribution date, the pool's aggregate principal balance has been reduced by 4.57% to $1.16 billion from $1.21 billion at issuance. Fitch has designated one Fitch Loan of Concern (1.2%). There are no specially serviced loans, and four loans (3.7%) are fully defeased.

The affirmations of the Freddie Mac K-018 certificates are the result of the pass-through nature of the certificates, as they are dependent on the underlying ratings of corresponding classes for FREMF 2012-K18.

The largest loan in the pool (7.3%) is secured by Central Astoria Apartments, a 100% rent stabilized, 894-unit garden-style apartment complex located in Astoria, NY. The property is located close to several major highways, within 10 minutes of LaGuardia Airport, and less than a 30-minute subway ride into Manhattan. The property has been 99% occupied since issuance.

The second largest loan (5.7%) is secured by Aldingbrooke Terrace-Townhomes, a 667-unit garden-style and townhome complex located in West Bloomfield, MI. The property was improved in 2010 with 78 two- and three-story apartment buildings and a single-story clubhouse. The property lacks competition in the submarket due to the large unit sizes compared to its competitors. As of December 2014, occupancy was 90%.

The third largest loan in the pool (3.9%), is secured by Lofts 640, a 265-unit, high-rise apartment building located in Philadelphia, PA. A former industrial warehouse built in 1913, the borrower purchased the property in 2004 and converted it to loft-style residential units. The property was 96% occupied as of March 2015.

RATING SENSITIVITIES

All classes maintain Stable Outlooks. Fitch does not foresee positive or negative ratings migration until a material economic or asset-level event changes the transaction's portfolio-level metrics.

DUE DILIGENCE USAGE

No third-party due diligence was provided or reviewed in relation to this rating action.

Fitch affirms the following classes as indicated:

FREMF 2012-K18 Multifamily Mortgage Pass-Through Certificates

--$104.4 million class A-1 at 'AAAsf'; Outlook Stable;

--$887.5 million class A-2 at 'AAAsf'; Outlook Stable;

--$74.3 million class B at 'A-sf'; Outlook Stable;

--$991.8 million* class X1 at 'AAAsf'; Outlook Stable;

--$991.8 million* class X2-A at 'AAAsf'; Outlook Stable.

Fitch does not rate classes C, X3 and X2-B certificates.

Freddie Mac Structured Pass-Through Certificates, Series K-018

--$104.4 million class A-1 at 'AAAsf'; Outlook Stable;

--$887.5 million class A-2 at 'AAAsf'; Outlook Stable;

--$991.8 million* class X1 at 'AAAsf'; Outlook Stable.

*Notional amount and interest only.

Fitch does not rate the X3 class certificate.

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. and Canadian Fixed-Rate Multiborrower CMBS Surveillance and U.S. Re-REMIC Criteria (pub. 13 Nov 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=873395

Related Research

FREMF 2012-K18 Multifamily Mortgage Pass-Through Certificates and Freddie Mac Structured Pass-Through Certificates, Series K-018 -- Appendix

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=681029

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=994439

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=994439

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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
Catherine Barbieri, +1-212-908-0638
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, New York
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Catherine Barbieri, +1-212-908-0638
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, New York
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com