DBRS Upgrades Two Classes of FREMF 2013-K26 Mortgage Trust, Series 2013-K26

DBRS Limited (DBRS) upgraded the following two classes of the Multifamily Mortgage Pass-Through Certificates Series 2013-K26 issued by FREMF 2013-K26 Mortgage Trust, Series 2013-K26 (the Trust) as follows:

--Class B to AA (high) (sf) from AA (sf)
--Class C to AA (sf) from AA (low) (sf)

DBRS also confirmed the following classes of the Trust:

--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 are Stable.

The rating upgrades reflect the overall strong performance of the underlying collateral. As of the February 2018 remittance, 81 loans remain in the pool with a collateral reduction of 5.3% since issuance due to loan repayments and scheduled loan amortization. Additionally, there are ten loans (6.7% of the current pool balance) that have been fully defeased.

To date, 71 loans (87.6% of the current pool balance) reported YE2017 financials, and 71 loans (87.7% of the current pool balance) reported YE2016 financials. Based on the most recent year-end financials available, the pool had a weighted-average (WA) debt service coverage ratio (DSCR) and a WA debt yield of 1.94x and 11.0%, respectively. The top 15 loans (43.5% of the current pool balance) have experienced cash flow growth of 27% since issuance and reported a WA DSCR of 1.76 times (x), compared with the WA DBRS Term DSCR of 1.43x. As of the June 2018 remittance, there are no loans in special servicing and two loans, representing 1.2% of the current pool balance, are on the servicer’s watchlist.

Classes X-1 and X2-A are interest-only (IO) certificates that reference a single rated tranche or multiple rated tranches. The IO rating mirrors the lowest-rated applicable reference obligation tranche adjusted upward by one notch if senior in the waterfall.

All ratings will be subject to ongoing surveillance, which could result in ratings being upgraded, downgraded, placed under review, confirmed or discontinued by DBRS.

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

The principal methodology is CMBS North American Surveillance, which can be found on dbrs.com under Methodologies. For a list of the Structured Finance related methodologies that may be used during the rating process, please see the DBRS Global Structured Finance Related Methodologies document on www.dbrs.com. Please note that not every related methodology listed under a principal Structured Finance asset class methodology may be used to rate or monitor an individual structured finance or debt obligation.

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 under Related Documents or by contacting us at info@dbrs.com.

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

The rated entity or its related entities did participate in the rating process for this rating action. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

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