NEW YORK--(EON: Enhanced Online News)--Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to six classes of FREMF 2013-KF02 mortgage pass-through certificates and four classes of Freddie Mac structured pass-through certificates (SPCs), Series KF02, a $1.54 billion CMBS multi-borrower transaction (see our ratings listed below).
The transaction is collateralized by 87 floating rate multifamily mortgage loans with five and seven-year loan terms. The loans have principal balances that range from $2.0 million to $68.8 million for the largest loan, which is secured by the fee simple interest in 597 Westport (4.5%), a 235-unit, mid-rise multifamily property located in Norwalk, CT. The top five loans represent 15.3% of the cut-off pool balance, and include Northcreek Apartments in Bothell, WA (3.4%), Key Isle At Windermere in Ocoee, FL (2.9%), Fulton’s Crossing in Everett, WA (2.3%), and The Hawthorne At Gillette Ridge in Bloomfield, CT (2.3%). The properties are located in 23 states, with the three largest concentrations in Florida (23.9%), Texas (21.8%) and Washington (8.5%).
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 2.8% 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 37.3% 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 collateral loan, which are then used to assign our credit ratings.
For complete details on the analysis, please see our Presale Report, FREMF 2013-KF02, 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-KF02
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Preliminary Ratings Assigned: Freddie Mac Structured Pass-Through Certificates, Series KF02
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Rule 17g-7 Disclosure
All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC Rule 17g-7, to provide a description regarding the 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 FREMF 2013-KF02 17g-7 Disclosure Report.
Related publications (available at www.krollbondratings.com):
About Kroll Bond Rating Agency
Kroll Bond Rating Agency, Inc. (www.krollbondratings.com) is registered with the SEC as a nationally recognized statistical rating organization (NRSRO). Kroll Bond Rating Agency was established in 2010 to restore trust in credit ratings by establishing new standards for assessing risk and by offering accurate, clear, and transparent ratings.