DBRS Upgrades One Class and Confirms Four Classes of FREMF 2012-K18 Mortgage Trust, Series 2012-K18

DBRS Limited (DBRS) has today upgraded one class of the Multifamily Mortgage Pass-Through Certificates Series 2012-K18 issued by FREMF 2012-K18 Mortgage Trust, Series 2012-K18 as follows:

-- Class B to AA (sf) from A (sf)

Additionally, DBRS has confirmed the following classes:

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

All trends remain Stable.

These rating actions reflect the overall strong performance of the transaction since issuance. The collateral consists of 74 fixed-rate loans secured by 78 multifamily properties. As at the July 2017 remittance, 74 of the 75 original loans remained in the pool, with an aggregate principal balance of $1.12 billion, representing a collateral reduction of 7.5% since issuance because of scheduled loan amortization and loan repayment. Nine loans, representing 11.1% of the pool, are fully defeased.

Excluding defeasance, six loans (4.1% of the pool) have reported Q1 2017 partial-year net cash flow (NCF) figures, while 56 loans (89.7% 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 1.86 times (x) and 12.1% compared with the DBRS issuance figures of 1.39x and 8.5%, respectively. The 14 largest non-defeased loans reported a WA DSCR of 1.80x compared with 1.70x as at YE2015 and a DBRS issuance figure of 1.34x. These 14 loans have exhibited WA NCF growth of 35.6% over the DBRS issuance figures.

As at the July 2017 remittance, there is one loan, representing 1.5% of the pool, on the servicer watchlist, which is being monitored for a low DSCR.

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 commercial mortgage-backed securities 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 are North American CMBS Multi-borrower Rating Methodology (March 2017) and 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.