Fitch Ratings has affirmed five classes of Freddie Mac 2012-K18
multifamily mortgage pass-through certificates and three classes of
Freddie Mac structured pass-through certificates, K-018. A detailed
list of rating actions follows at the end of this press
release.
The affirmations of the Freddie Mac K-018 certificates are the
result of the pass-through nature of the certificates, as they are
dependent on the underlying ratings of corresponding classes
for
FREMF-K51.
KEY RATING DRIVERS
The affirmations reflect stable performance of the pool since
issuance. As of the September 2016 distribution date, the pool's
aggregate principal balance has been reduced by 6% to $1.14 billion
from $1.21 billion at issuance. Fitch has designated two loans as
Fitch Loans of Concern (FLOCs) (2.7%). There are no specially
serviced loans, and five loans (4.6%) are fully defeased.
Stable Performance with No Material Changes: All loans in the
pool are current as of the September 2016 distribution with
property level performance generally in line with issuance
expectations and no material changes to pool metrics.
Property Type Concentration: Of the pool, 100% is backed by
multifamily properties. All loans were originated by various
sellers/originators according to Freddie Mac property guidelines
and adhere to the originator best practices identified by
Fitch.
Partial Interest and Full-Term Interest Only Loans: One loan
representing 1% of the pool is full-term interest only, and 28
loans representing 50.1% of the pool have partial-term
interest-only components. Based on the loans' scheduled maturity
balance, the pool is expected to amortize 16% during the term.
The largest loan in the pool (7.5%) is secured by Central
Astoria Apartments, a 100% rent stabilized, 894-unit garden-style
apartment complex located in Astoria, NY. The property is located
close to several major highways, within 10 minutes of LaGuardia
Airport, and less than a 30-minute subway ride into Manhattan. The
property has been 99% occupied since issuance.
The second largest loan (5.6%) is secured by Aldingbrooke
Terrace-Townhomes, a 667-unit garden-style and townhome complex
located in West Bloomfield, MI. The property was built in 2010 and
consists of 78 two- and three-story apartment buildings and a
single-story clubhouse. The property has demonstrated stable
performance since issuance. Occupancy was 94% as of June 2016, a
slight increase from 90% at December 2015. The NOI DSCR reported at
2.00x for YTD June 2016 and 1.82x for YE 2015. The
servicer-reported YE 2015 NOI increased 3% from YE 2014.
RATING SENSITIVITIES
The Rating Outlooks for all classes remain Stable. Fitch does
not foresee positive or negative ratings migration until a material
economic or asset-level event changes the transaction's
portfolio-level metrics.
USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.
Fitch affirms the following classes:
FREMF 2012-K18 Multifamily Mortgage Pass-Through
Certificates
--$87.1 million class A-1 at 'AAAsf'; Outlook Stable;
--$887.5 million class A-2 at 'AAAsf'; Outlook Stable;
--$74.3 million class B at 'A-sf'; Outlook Stable;
--$991.8 million* class X1 at 'AAAsf'; Outlook Stable;
--$991.8 million* class X2-A at 'AAAsf'; Outlook Stable.
Fitch does not rate classes C, X3 and X2-B certificates.
Freddie Mac Structured Pass-Through Certificates, Series
K-018
--$87.1 million class A-1 at 'AAAsf'; Outlook Stable;
--$887.5 million class A-2 at 'AAAsf'; Outlook Stable;
--$991.8 million* class X1 at 'AAAsf'; Outlook Stable.
*Notional amount and interest only.
Fitch does not rate the X3 class certificate.
Additional information is available at www.fitchratings.com.
Applicable Criteria
Counterparty Criteria for Structured Finance and Covered Bonds
(pub. 01 Sep 2016)
https://www.fitchratings.com/site/re/886006
Criteria for Rating Caps and Limitations in Global Structured
Finance Transactions (pub. 16 Jun 2016)
https://www.fitchratings.com/site/re/882401
Global Structured Finance Rating Criteria (pub. 27 Jun 2016)
https://www.fitchratings.com/site/re/883130
U.S. and Canadian Fixed-Rate Multiborrower CMBS Surveillance and
U.S. Re-REMIC Criteria (pub. 13 Nov 2015)
https://www.fitchratings.com/site/re/873395
Related Research
FREMF 2012-K18 Multifamily Mortgage Pass-Through Certificates
and Freddie Mac Structured Pass-Through Certificates, Series K-018
-- Appendix
https://www.fitchratings.com/site/re/681029
Additional Disclosures
Dodd-Frank Rating Information Disclosure Form
https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1014251
Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1014251
Endorsement Policy
https://www.fitchratings.com/regulatory
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Fitch RatingsPrimary AnalystCatherine BarbieriAssociate
Director+1-212-908-0638Fitch Ratings, Inc.33 Whitehall StreetNew
York, NY 10004orCommittee ChairpersonMary MacNeillManaging
Director+1-212-908-0785orMedia Relations:Sandro Scenga,
+1-212-908-0278sandro.scenga@fitchratings.com