DBRS Confirms Ratings of FREMF 2012-K19 Mortgage Trust

DBRS has today confirmed the ratings of FREMF 2012-K19 Mortgage Trust, Series 2012-K19, as follows:

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

All trends are Stable.

The rating confirmations reflect the continued stable performance of the transaction since issuance. The collateral consists of 83 fixed-rate loans secured by 83 multifamily properties. As of the July 2014 remittance report, the pool has a balance of approximately $1.25 billion, representing a collateral reduction of approximately 1.65% since issuance in August 2012. Overall, the loans in the pool have reported stable performance, as according to YE2013 reporting, the pool had a weighted-average debt service coverage ratio (DSCR) of 1.33 times (x). Performance of the top 15 loans is slightly stronger, as the loans are reporting a YE2013 weighted-average DSCR and weighted-average debt yield of 1.36x and 7.5%, respectively.

As of the June 2014 remittance report, there are no loans on the servicer’s watchlist and no delinquent or specially serviced loans.

The DBRS analysis included an in-depth review of the top 15 loans, which represent 41.4% of the current pool balance. Within the top 15 loans, three loans are secured by student-housing properties, which are considered non-traditional multifamily property types. Loans secured by student-housing properties historically are more volatile, as occupancy drops in the summer months and the construction of new developments can provide additional supply to a given market. To combat low summer occupancy rates and minimal tenant credit history, most landlords require 12-month leases accompanied with parental guarantees. These factors have been considered in DBRS’s analysis, and DBRS will continue to monitor and disclose any material changes.

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 largest loans in the pool and loans on the servicer’s watchlist. The July 2014 Monthly CMBS 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.