Fitch Ratings has assigned expected ratings and issued a presale report for the FREMF 2024-K755 Mortgage Trust Multifamily Mortgage Pass-Through Certificates and Freddie Mac Structured Pass-Through Certificates Series K-755.
RATING ACTIONS
Entity / Debt
Rating
A-1
LT
Expected Rating
A-1
ULT
Expected Rating
A-2
LT
Expected Rating
A-2
ULT
Expected Rating
A-M
LT
NR(EXP)sf
Expected Rating
A-M
ULT
NR(EXP)sf
Expected Rating
X1
LT
Expected Rating
X1
ULT
Expected Rating
X3
LT
NR(EXP)sf
Expected Rating
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VIEW ADDITIONAL RATING DETAILS
FREMF 2024-K755 Mortgage Trust Multifamily Mortgage Pass-Through Certificates Series 2024-K755
(FREMF 2024-K755):
Fitch has also assigned expected Unenhanced Ratings, which reflect the underlying credit worthiness absent the
Freddie Mac Structured Pass-Through Certificates, Series K-755 (
Fitch has also assigned expected Unenhanced Ratings, which reflect the underlying creditworthiness absent the
(a) Guaranteed byFreddie Mac .
(b) Notional amount and interest only
(c) Privately placed and pursuant to Rule 144a. CE - Credit enhancement. NR - Not rated.
The FREMF 2024-K755 consists of both guaranteed and unguaranteed certificates. The underlying guaranteed certificates consist of classes A-1, A-2, A-M, X1, XAM, and X3. These certificates will be purchased by
Fitch does not expect to rate the following classes of FREMF 2024-K755:
These expected ratings and Unenhanced Ratings are based on information provided by the issuer as of
Transaction Summary
The certificates represent the beneficial ownership interest in the trust. The trust's primary assets are 39 fixed-rate loans secured by 39 multifamily properties with an aggregate principal balance of approximately
KEY RATING DRIVERS
Fitch
Low Leverage Compared to Recent Transactions: The pool has lower leverage compared with that of recent
Lower Pool Concentration: The top 10 loans represent 55.7% of the pool, which is lower than the 2022 and 2023 averages for Fitch-rated K7 Series of 59.7% and 63.3%, respectively.
Interest-Only Loans: The pool contains 14 full-term interest-only (IO) loans, representing 46.5% of the pool's cutoff balance. The pool's concentration of IO loans is lower than the 2022 and 2023 average for Fitch-rated K7 Series of 54.5% and 47.3%, respectively. The pool's scheduled paydown of 2.8% is lower than the 2022 and 2023 average for Fitch-rated K7 Series of 4.5% and 2.9%, respectively.
Freddie Mac Guarantee: The expected ratings of classes A-1, A-2 and X1 factor added support via a guarantee from
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
Declining cash flow decreases property value and capacity to meet debt service obligations. The table below indicates the model-implied rating sensitivity to changes in one variable, Fitch NCF:
Original Rating: 'AAAsf';
10% NCF decline: 'AA+sf'.
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
Fitch did not consider the implementation of positive stresses for this transaction as the rated classes are at the highest rating level and cannot be upgraded further. The presale report includes a detailed explanation of additional stresses and sensitivities on page 11 of the report.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Fitch was provided with Form ABS Due Diligence-15E (Form 15E) as prepared by
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS
A description of the transaction's representations, warranties and enforcement mechanisms (RW&Es) that are disclosed in the offering document and which relate to the underlying asset pool is available by clicking the link to the Appendix. The appendix also contains a comparison of these RW&Es to those Fitch considers typical for the asset class as detailed in the Special Report titled 'Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions'.
A description of the transaction's representations, warranties and enforcement mechanisms (RW&Es) that are disclosed in the offering document and which relate to the underlying asset pool is available by clicking the link to the Appendix. The appendix also contains a comparison of these RW&Es to those Fitch considers typical for the asset class as detailed in the Special Report titled 'Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions'.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit https://www.fitchratings.com/topics/esg/products#esg-relevance-scores.
Additional information is available on www.fitchratings.com
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