Fitch Issues Presale on FREMF 2012-K711 Mortgage Trust & Freddie Mac SPCs, Series K-711

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has issued a presale report on Wells Fargo Commercial Mortgage Securities, Inc., multifamily mortgage pass-through certificates, series 2012-K711 (FREMF 2012-K711 Certificates) and Freddie Mac structured pass-through certificates, series K-711 (Freddie Mac SPCs K-711).

Fitch expects to rate the transaction and assign Rating Outlooks as follows:

FREMF 2012-K711 Certificates

--$110,747,000 class A-1 'AAAsf'; Outlook Stable;

--$1,048,593,000 class A-2 'AAAsf'; Outlook Stable;

--$1,159,340,000* class X1 'AAAsf'; Outlook Stable;

--$1,159,340,000* class X2-A 'AAAsf'; Outlook Stable;

--$90,248,000 class B 'A-sf'; Outlook Stable;

--$34,711,000 class C 'BBBsf'; Outlook Stable.

Freddie Mac SPCs Series K-711

--$110,747,000 class A-1 'AAAsf'; Outlook Stable;

--$1,048,593,000 class A-2 'AAAsf'; Outlook Stable;

--$1,159,340,000* class X1 'AAAsf'; Outlook Stable.

*Notional amount and interest only.

The expected ratings are based on information provided by the issuer as of Oct. 29, 2012. Of the FREMF 2012-K711 Certificates, Fitch does not expect to rate the $229,091,919 interest-only class X2-B, the $229,091,919 interest-only class X3 or the $104,132,919 class D. Fitch does not expect to rate the Freddie Mac SPC K-711 $229,091,919 interest-only class X3. Fitch acknowledges one loan (Gilbert Manor) has been removed from the pool due to its location in an area severely impacted by Hurricane Sandy. The borrower has not been able to confirm whether or not the property has sustained material damage from Hurricane Sandy. The tables and calculations do not reflect the removal of this loan; however, Fitch has confirmed the removal of this loan will not impact the ratings.

The FREMF 2012-K711 certificates (FREMF 2012-K711) represent the beneficial interests in a pool of 77 multifamily mortgages secured by 77 properties. The Freddie Mac SPC K711 represent a pass-through interest in the corresponding class of securities issued by the FREMF 2012-K711 mortgage trust. Each Freddie Mac SPC K711 class has the same designation as its underlying FREMF 2012-K711 class. All loans were originated by various seller/servicers according to the guidelines of Freddie Mac Capital Markets Execution (CME) program. The FREMF 2012-K711 certificates follow a sequential-pay structure.

Fitch reviewed a comprehensive sample of the transaction's collateral, including site inspections on 73% of the properties by balance and cash flow analysis of 75% of the pool.

The transaction has a Fitch stressed debt service coverage ratio (DSCR) of 1.07x, a Fitch stressed loan-to value (LTV) of 114.5%, and a Fitch debt yield of 7.32%. Fitch's aggregate net cash flow represents a variance of 5.93% to issuer cash flows.

The Master Servicer will be Wells Fargo Bank National Association., rated 'CMS2' by Fitch. The Special Servicer will be Wells Fargo Bank National Association, rated 'CSS2-' by Fitch.

The presale report is available at 'www.fitchratings.com'.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions', Aug. 8, 2012;

--'U.S. Commercial Mortgage Servicer Rating Criteria', Feb. 18, 2011;

--'Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions', Dec. 21, 2011;

--'Global Structured Finance Rating Criteria', June 6, 2012;

--'Criteria for Special-Purpose Vehicles in Structured Finance Transactions', May 30, 2012.

Applicable Criteria and Related Research: FREMF 2012-K711 Multifamily Mortgage Pass-Through Certificates and Freddie Mac Structured Pass-Through Certificates, Series K-711

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=693380

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679923

Criteria for Special-Purpose Vehicles in Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=680591

Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=685995

U.S. Commercial Mortgage Servicer Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=584005

Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=662869

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Fitch Ratings
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Source: Fitch Ratings