Fitch Affirms FREMF 2012-K20 & Freddie Mac Structured Pass-Through Certificates, Series 2012-K020

NEW YORK–(BUSINESS WIRE)–

Fitch Ratings has affirmed six classes of FREMF 2012-K20 multifamily
mortgage pass-through certificates and Freddie Mac structured
pass-through certificates, series 2012-K020 as follows:

FREMF 2012-K20 Multifamily Mortgage Pass-Through Certificates

–$189.2 million class A-1 at ‘AAAsf’; Outlook Stable;

–$899.7 million class A-2 at ‘AAAsf’; Outlook Stable;

–$1,097,500,000* class X1 at ‘AAAsf’; Outlook Stable;

–$1,097,500,000* class X2-A at ‘AAAsf’; Outlook Stable;

–$71.4 million class B at ‘A-sf’; Outlook Stable;

–$32.5 million class C at ‘BBBsf’; Outlook Stable.

Freddie Mac Structured Pass-Through Certificates, Series 2012-K020

–$189.2 million class A-1 at ‘AAAsf’; Outlook Stable;

–$899.7 million class A-2 at ‘AAAsf’; Outlook Stable;

–$1,098 billion* class X1 at ‘AAAsf’; Outlook Stable.

*Notional amount and interest only.

Of the FREMF 2012-K20 multifamily mortgage pass-through certificates,
Fitch does not rate the interest-only class X2-B, the interest-only
class X3 or class D. In addition, of the Freddie Mac structured
pass-through certificates, series 2012-K020, Fitch does not rate
interest-only class X3.

KEY RATING DRIVERS

The affirmations are based on the stable performance of the underlying
collateral pool. As of the August 2013 distribution date, the pool has
no specially serviced or delinquent loans and has experienced no
realized losses to date. As of the August 2013 distribution date, the
pool’s aggregate principal balance has been reduced by 0.7% to $1.29
billion from $1.3 billion at issuance. Fitch has designated one loan
(1.4% of the pool) as a Fitch Loan of Concern. The Fitch Loan of Concern
is also the largest contributor to expected losses and is secured by a
368-unit apartment complex built in 1996 and located in Plano, TX. Prior
ownership had underfunded capital improvements, and as a result the
condition of the asset deteriorated. The current borrower has decided
not renew leases for troublesome residents and has commenced physical
improvements, however, in this process the NOI DSCR has declined to
1.04x as of Year End (YE) 2012 from 1.36x at issuance based on issuer’s
underwriting. Occupancy was 84% as of YE 2012.

RATING SENSITIVITY

The Rating Outlooks on classes A-1, A-2, B, C, and interest only class
X1 remain Stable. Due to the recent issuance of the transactions and
stable performance, Fitch does not foresee positive or negative ratings
migration until a material economic or asset level event changes each
transaction’s overall portfolio-level metrics. Additional information on
rating sensitivity is available in the ‘FREMF 2012-K20 multifamily
mortgage pass-through certificates and Freddie Mac structured
pass-through certificates, series 2012-K020’ (September 4, 2012) presale
report, available at www.fitchratings.com.

A comparison of the transaction’s Representations, Warranties, and
Enforcement (RWE) mechanisms to those of typical RWEs for the asset
class is available in the following report:

–‘FREMF 2012-K20 Multifamily Mortgage Pass-Through Certificates and
Freddie Mac Structured Pass-Through Certificates, Series K-020 —
Appendix’ (Sept. 4, 2012).

Additional information on Fitch’s criteria for analyzing U.S. CMBS
transactions is available in the Dec. 18, 2012 report, ‘U.S. Fixed-Rate
Multiborrower CMBS Surveillance and Re-REMIC Criteria’, which is
available at ‘www.fitchratings.com
under the following headers:

Structured Finance CMBS Criteria Reports

Additional information is available at ‘www.fitchratings.com‘.

Applicable Criteria and Related Research:

–‘Global Structured Finance Rating Criteria’ (May 24, 2013);

–‘U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC
Criteria’ (Dec. 18, 2012).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=696969

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=800816

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND
DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING
THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS.
IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE
AVAILABLE ON THE AGENCY’S PUBLIC WEBSITE ‘WWW.FITCHRATINGS.COM‘.
PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS
SITE AT ALL TIMES. FITCH’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS
OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES
AND PROCEDURES ARE ALSO AVAILABLE FROM THE ‘CODE OF CONDUCT’ SECTION OF
THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE
RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR
RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY
CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH
WEBSITE.


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