NEW YORK--(EON: Enhanced Online News)--Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to seven classes of FREMF 2013-K32 mortgage pass-through certificates and three classes of Freddie Mac structured pass-through certificates (SPCs), Series K32, a $1.51 billion CMBS multi-borrower transaction (see ratings listed below).
The transaction is collateralized by 90 fixed rate commercial mortgage loans with principal balances ranging from $2.0 million to $103.4 million for the largest loan, which is secured by the Tesoro At Crescent Village (6.8%), a 380-unit garden-apartment complex located in San Jose, CA. The top five loans represent 22.5% of the pool cut-off date balance, and also include Muirwood Apartments in Farmington Hills, MI (5.6%), Skyview On The Hudson in Riverdale, NY (3.6%), Foothill Place Apartments in Salt Lake City, UT (3.3%) and Crown Court Apartments in Scottsdale, AZ (3.2%). The top 10 exposures represent 34.1% of the total pool balance. The properties are located in 27 states, with the three largest concentrations in California (17.0%), Georgia (8.0%) and Florida (8.0%). The majority of the properties are garden-style apartment projects (71 properties, 81.6%). The properties range in size from 20 to 1,309 units.
KBRA’s analysis of the transaction incorporated our U.S. CMBS multi-borrower rating process that begins with our analysts' evaluation of the underlying collateral properties' financial and operating performance, which are used to determine KBRA’s estimate of sustainable net cash flow (KNCF) and KBRA value using our CMBS Property Evaluation Guidelines. KBRA’s weighted average KNCF for the portfolio is 2.2% less than the issuer’s NCF. KBRA capitalization rates were applied to each asset’s KNCF to derive individual property values that, on an aggregate basis, were 36.8% less than third party appraisal values. The weighted average KBRA capitalization rate for the transaction is 8.6%. The KBRA credit model deploys rent and occupancy stresses, probability of default regressions, and loss-given default calculations to determine losses for each loan, which are then used to assign our credit ratings. For complete details on the analysis, please see our Presale Report, FREMF 2013-K32, published today at www.krollbondratings.com.
The preliminary ratings are based on information known to KBRA at the time of this publication. Information received subsequent to this release could result in the assignment of final ratings that differ from the preliminary ratings.
Preliminary Ratings Assigned: FREMF 2013-K32
|1||Freddie Mac will provide a payment guarantee for these certificates and will purchase such classes and deposit them into a separate trust in exchange for the SPCs. KBRA’s rating of this class (if applicable) was assigned without taking the Freddie Mac payment guarantee into account.|
|2||Notional balance equal to the aggregate outstanding balance of the Class A-1 and Class A-2 certificates.|
|3||Notional balance equal to the aggregate outstanding balance of the Class B, C and D certificates.|
All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC Rule 17g-7, to provide a description of a transaction’s representations, warranties and enforcement mechanisms that are available to investors when issuing credit ratings. KBRA’s disclosure for this transaction can be found in the report entitled CMBS: FREMF 2013-K32 17g-7 Disclosure Report.