DBRS Confirms All Classes of FREMF 2012-K17 Mortgage Trust, Series 2012-K17

DBRS has today confirmed all classes of FREMF 2012-K17 Mortgage Trust, Series 2012-K17, as follows:

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class X1 at AAA (sf)
-- Class X2-A at AAA (sf)
-- Class B at A (sf)

The trends on all classes are Stable.

The pool consists of 72 fixed-rate loans secured by 76 multifamily properties. The transaction has experienced 1.6% of collateral reduction since issuance as a result of amortization. The pool benefits from strong origination practices and strong sponsorship, with many borrowers being repeat clients of Freddie Mac. As of the January 2014 remittance, the weighted-average debt service coverage ratio (DSCR) and weighted-average debt yield for the pool was 1.69x and 9.9%, respectively.

There is one loan on the servicer’s watchlist as of January 2014. Broadmoor at Jordan Creek (Prospectus ID#8, 2.2% of the current pool balance) is secured by a 310-unit garden-style apartment community in West Des Moines, Iowa. As of September 2013, the property was 98.7% occupied. This loan was added to the servicer’s watchlist in July 2013 because of a low DSCR. The loan reported an annualized Q3 2013 DSCR of 1.08x, which is below the servicer’s 1.10x threshold for this property type. The Q3 2013 DSCR reflects a 10.7% decline in cash flow from the DBRS underwritten (UW) figure, mostly attributable to reported real estate taxes at the property. DBRS will continue to monitor this loan.

The top 15 loans have experienced healthy cash flow growth overall, with a weighted-average cash flow change of 16.5% over the DBRS UW cash flows. For top 15 loans reporting YE 2012 financials, the weighted-average DSCR is 1.74x as of the January 2014 remittance.

DBRS continues to monitor this transaction in its Monthly CMBS Surveillance Report, with additional information on the DBRS viewpoint for this transaction, including details on the remaining loans in the pool. The February 2014 Monthly Surveillance Report for this transaction will be published shortly. If you are interested in receiving this report, contact us at info@dbrs.com.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The applicable methodologies are CMBS Rating Methodology (January 2012) and CMBS North American Surveillance Methodology (November 2012), which can be found on our website under Methodologies.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.