DBRS Upgrades Two Classes of FREMF 2010-K8 Mortgage Trust, Series 2010-K8

DBRS Limited (DBRS) has today upgraded the two ratings of Multifamily Mortgage Pass-Through Certificates Series 2010-K8 issued by FREMF 2010-K8 Mortgage Trust, Series 2010-K8 as follows:

-- Class B to AAA (sf) from AA (low) (sf)
-- Class X2 to AAA (sf) from AA (sf)

All trends remain Stable.

These rating actions reflect the overall strong performance of the transaction since issuance. The collateral consists of 63 fixed-rate loans secured by 63 multifamily properties. As of the July 2017 remittance, 63 of the 72 original loans remained in the pool, with an aggregate principal balance of $922.9 million, representing a collateral reduction of 20.4% since issuance due to scheduled loan amortization and loan repayment. Seventeen loans, representing 20.1% of the pool, are fully defeased.

Excluding defeasance, 16 loans (23.9% of the pool) have reported Q1 2017 partial-year net cash flow (NCF) figures, while 62 loans (99.6% of the pool) reported YE2016 NCF figures. Based on the most recent year-end NCF reporting, the transaction had a weighted-average (WA) debt service coverage ratio (DSCR) and WA debt yield of 1.89 times (x) and 14.2%, compared to the DBRS issuance figures of 1.29x and 8.9%, respectively. The 13 largest non-defeased loans reported a WA DSCR of 1.93x, compared to 1.80x at YE2015 and the DBRS issuance figure of 1.26x. These 13 loans have exhibited WA NCF growth of 54.7% over the DBRS issuance figures.

As of the July 2017 remittance, there are eight loans, representing 5.2% of the pool, on the servicer watchlist (WL). These loans have a WA DSCR of 1.42x at YE2016. The largest WL loan is being monitored due to a hazard loss greater than $500,000. Three of these loans, which are all cross-collateralized and cross-defaulted, are being monitored for an unauthorized transfer without lenders’ consent. Two of the WL loans are being monitored for performance-related issues. One loan on the WL is being monitored for insufficient umbrella insurance coverage.

DBRS has provided updated loan-level commentary and analysis for larger and/or pivotal watchlisted loans and for the largest 15 loans in the pool in the DBRS CMBS IReports platform. Registration is free. To view these and future loan-level updates provided as part of DBRS’s ongoing surveillance for this transaction, please register or log into www.ireports.dbrs.com.

For more information on these rating actions, please contact us at info@dbrs.com.

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

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.

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

The principal methodologies is the CMBS North American Surveillance (March 2017), which can be found on dbrs.com under Methodologies.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.