MORNINGSTAR, INC. NEW YORK, Sept. 15, 2014 /PRNewswire/ -- Morningstar Credit Ratings, LLC today assigned preliminary ratings for the commercial mortgage-backed securities (CMBS) transaction FREMF 2014-K716 Mortgage Trust, Multifamily Mortgage Pass-Through Certificates, Series 2014-K716 and Freddie Mac Structured Pass-Through Certificates, Series K716. The preliminary ratings are based on information known to Morningstar as of Sept. 15, 2014.
PRELIMINARY RATINGS (AS OF SEPT. 15, 2014)
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Class Balance/ Preliminary Morningstar Morningstar Morningstar Credit Support
Notional Amt. Ratings DSCR BLTV ELTV Levels
--- ------------- ------- ---- ---- ---- ------
FREMF 2014-K716 Multifamily Mortgage Pass-Through Certificates
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Class A-1 $107,392,000 AAA 1.76x 73.2% 65.8% 16.25%
Class A-2 $1,069,600,000 AAA 1.76x 73.2% 65.8% 16.25%
Class X1 $1,176,992,000 AAA N/A N/A N/A N/A
Class X3 $228,371,947 N/A 1.76x 73.2% 65.8% N/A
Class B $87,835,000 A 1.64x 78.7% 71.2% 10.00%
Class C $35,134,000 BBB+ 1.59x 80.9% 73.4% 7.50%
Class D $105,402,947 N/A N/A N/A N/A N/A
Total
Issuance $1,405,363,948
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Freddie Mac Structured Pass-Through Certificates
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Class A-1 $107,392,000 AAA 1.76x 73.2% 65.8% 16.25%
Class A-2 $1,069,600,000 AAA 1.76x 73.2% 65.8% 16.25%
Class X1 $1,176,992,000 AAA N/A N/A N/A N/A
Class X3 $228,371,947 N/A 1.76x 73.2% 65.8% N/A
Total
Issuance $1,176,992,000
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The key characteristics of the portfolio of multifamily mortgage loans supporting FREMF 2014-K716 are:
-- Eighty fixed-rate, first-lien mortgage loans secured by 80 multifamily
properties;
-- An aggregate initial pool balance of $1.41 billion;
-- Each loan is a balloon loan and has a seven-year term;
-- The largest loan exposure is Fountainhead Apartments located in
Westborough, Mass., representing 4.8 percent of the aggregate pool
balance; and
-- The top 10 loans represent 29.1 percent of the aggregate pool balance.
Based on information provided on the arranger's website, Morningstar's analysis of the loans yielded the following Morningstar metrics:
-- A net cash flow (NCF) of $111.4 million, which is lower than the
arranger's NCF by 3.3 percent;
-- A weighted-average amortizing debt service coverage ratio (DSCR) of
1.47x;
-- Using a weighted-average capitalization rate of 6.9 percent, Morningstar
valued the properties at $1.61 billion; and
-- The Morningstar value resulted in weighted-average beginning and ending
loan/value (LTV) ratios of 87.4 percent and 80.0 percent, respectively.
For complete details about the preliminary ratings for this transaction, Morningstar's Presale Analysis Package, including the Presale Report and the Representations, Warranties, and Enforcement Mechanisms, is available under the Ratings Reports tab at https://ratingagency.morningstar.com. Information subsequently received could result in the assignment of final ratings that differ from the preliminary ratings.
About Morningstar Credit Ratings, LLC and Morningstar, Inc.
Morningstar Credit Ratings, LLC is a Nationally Recognized Statistical Rating Organization (NRSRO) that specializes in structured credit research and ratings and offers a wide array of services including new-issue ratings and analysis, operational risk assessments, surveillance services, data, and technology solutions.
Morningstar Credit Ratings, LLC is a subsidiary of Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research in North America, Europe, Australia, and Asia.
Morningstar, Inc. offers an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. Morningstar provides data on approximately 473,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 12 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $169 billion in assets under advisement and management as of June 30, 2014. The company has operations in 27 countries.
Morningstar, Inc. is not an NRSRO, and its credit ratings on corporate issuers are not NRSRO credit ratings.
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Media Contacts:
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SOURCE Morningstar, Inc.
