Fitch Affirms FREMF 2011-K14

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed Freddie Mac's FREMF Mortgage Trust, series 2011-K14 multifamily mortgage pass-through certificates.

KEY RATING DRIVERSThe affirmation is based on the stable performance of the underlying collateral pool. The pool's aggregate principal balance has been paid down by 6.92% to $1.11 billion from $1.19 billion at issuance. Since the last rating action, six loans have defeased (5.2% of the pool).

There is currently one specially serviced asset (1.3% of the pool). In addition, three loans are on the servicer watch list (2.3% of the pool); the loans are on the watch list due to deferred maintenance and declines in occupancy and DSCR. One loan out of the three (0.8% of the pool) watch list loans is considered a Fitch Loan of Concern. The loan is secured by a student housing community with an NOI DSCR below 1.0x as of YE 2015.

The specially-serviced loan is The Heights at Slippery Rock (1.3% of the pool), which is secured by a 400 unit student housing apartment community built in 2007 and located in Slippery Rock, PA. Slippery Rock University experienced a 6% decrease in enrollment from 2010 to 2013 causing a negative impact on the local student housing market. The enrollment decrease was compounded by an increase of new supply with the completion of a new student housing project in fall 2013 containing 603 beds. The net effect was a reduction in occupancy and rental rates at the subject. NOI DSCR has declined from 1.49x as of YE 2013 to 1.07x and 0.70x, as of YE 2014 and 3Q 2015, respectively. However, occupancy rebounded from 70% as of YE 2014 to 99% as of September 2015. The special servicer is developing a business plan to pursue a receiver sale, assumption and modification of the debt.

RATING SENSITIVITIESThe Rating Outlook on class B remains Stable, as overall pool performance has been relatively stable since issuance. Fitch does not foresee positive or negative ratings migration until a material economic or asset level event changes the transaction's overall portfolio-level metrics. Upgrades may occur with stable to improved pool performance and significant paydown or defeasance. Additional information on rating sensitivity is available in the 'FREMF 2011-K14 Multifamily Mortgage Pass-Through Certificates' (Sept. 2, 2011) new issue report, available at www.fitchratings.com.

DUE DILIGENCE USAGENo third party due diligence was provided or reviewed in relation to this rating action.

Fitch has affirmed the following rating:

--$53.6 million class B at 'Asf', Outlook Stable.

Additional information is available at www.fitchratings.com.

Applicable CriteriaGlobal Structured Finance Rating Criteria (pub. 06 Jul 2015)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952U.S. and Canadian Fixed-Rate Multiborrower CMBS Surveillance and U.S. Re-REMIC Criteria (pub. 13 Nov 2015)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=873395

Additional DisclosuresDodd-Frank Rating Information Disclosure Formhttps://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1004780Solicitation Statushttps://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1004780Endorsement Policyhttps://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160519006546/en/

Fitch Ratings
Primary Analyst
Martin Nunnally
Associate Director
+1-212-908-0871
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Mary MacNeill
Managing Director
+1-212-908-0785
or
Media Relations
Sandro Scenga, New York, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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