Class A-1 at
Class A-2 at
Class X1 at
All trends are Stable.
The Class X1 balance is notional
The collateral consists of 53 fixed-rate loans secured by 53 commercial properties, including 31 garden-style multifamily properties (including five age restricted multifamily), 10 manufactured housing communities (including two age restricted MHCs), four mid-rise properties, three student housing properties, two townhome style properties, two independent living properties, and one high-rise property. Fifty-two loans in the pool have 10-year loan terms and
Classes A-1, A-2, A-M, X1, XAM and X3 of the FREMF 2024-
There are 44 loans, representing 86.7% of the total pool balance, that have a Morningstar DBRS Issuance loan-to-value ratio (LTV) of 67.1% or below, resulting in a decreased probability of default (POD). The overall pool has a Morningstar DBRS WA Issuance LTV of 60.8% and a Morningstar DBRS WA Balloon LTV of 58.7%. These credit metrics are comparable, but slightly lower, relative to recent FREMF transactions rated by Morningstar DBRS and are indicative of lower leverage. Please see the Comparable Transactions table in the related Presale Report for additional details.
Fifty loans, representing 97.3% of the pool, had a Morningstar DBRS sponsor strength of Strong, which is credit positive. Sponsors generally represent large, financially capable individuals or companies led by experienced professionals with minimal prior credit issues. In many cases, sponsors are repeat borrowers of FREMF and have a proven credit record with no performance issues.
Collectively, there are six loans, representing 21.7% of the deal, that were assessed with favorable property quality. Backing all these loans are Class A multifamily properties that were built (or gut renovated) from 2020 to 2023. Morningstar DBRS considered these loans to be Average + property quality based on physical attributes and/or a desirable location within their respective markets. Four of these loans, Sentio, the James at
The average haircut was 6.9% across the 24 loans that Morningstar DBRS sampled, representing 76.4% of the pool. The sampled average NCF variance is lower than the recent
There are four loans, representing 17.8% of the pool, in a
Given the pool's overall credit metrics, property quality, and
Morningstar DBRS' credit ratings on the Certificates address the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. The associated financial obligations are the related Principal Distribution Amounts and Interest Distribution Amounts for the rated classes.
Morningstar DBRS' credit ratings does not address nonpayment risk associated with contractual payment obligations contemplated in the applicable transaction document(s) that are not financial obligations. For example, Yield Maintenance Charges and Static Prepayment Premiums.
Morningstar DBRS' long-term credit ratings provide opinions on risk of default. Morningstar DBRS considers risk of default to be the risk that an issuer will fail to satisfy the financial obligations in accordance with the terms under which a long-term obligation has been issued. The Morningstar DBRS short-term debt rating scale provides an opinion on the risk that an issuer will not meet its short-term financial obligations in a timely manner
ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance factor(s) that had a significant or relevant effect on the credit analysis.
A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (
Class X1 is an interest-only (IO) certificate that reference a single rated tranche or multiple rated tranches. The IO rating mirrors the lowest-rated applicable reference obligation tranche adjusted upward by one notch if senior in the waterfall.
All credit ratings are subject to surveillance, which could result in credit ratings being upgraded, downgraded, placed under review, confirmed, or discontinued by Morningstar DBRS.
Notes:
All figures are in
The principal methodology is North American CMBS Multi-Borrower Rating Methodology (
Other methodologies referenced in this transaction are listed at the end of this press release.
With regard to due diligence services, Morningstar DBRS was provided with the Form ABS Due Diligence-15E (Form-15E), which contains a description of the information that a third party reviewed in conducting the due diligence services and a summary of the findings and conclusions. While due diligence services outlined in Form-15E do not constitute part of Morningstar DBRS' methodology, Morningstar DBRS used the data file outlined in the independent accountant's report in its analysis to determine the credit ratings referenced herein.
The credit rating was initiated at the request of the rated entity.
The rated entity or its related entities did participate in the credit rating process for this credit rating action.
Morningstar DBRS had access to the accounts, management, and other relevant internal documents of the rated entity or its related entities in connection with this credit rating action.
This is a solicited credit rating.
A provisional credit rating is not a final credit rating with respect to the above-mentioned securities and may change or be different than the final credit rating assigned or may be discontinued. The assignment of final credit ratings on the above-mentioned securities is subject to receipt by Morningstar DBRS of all data and/or information and final documentation that Morningstar DBRS deems necessary to finalize the credit ratings.
Please see the related appendix for additional information regarding the sensitivity of assumptions used in the credit rating process.
Tel. +1 312-332-3429
The credit rating methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.
Rating North American CMBS Interest-Only Certificates (
Legal Criteria for
DBRS Morningstar North American Commercial Real Estate Property Analysis Criteria (
North American Comercial Mortgage Servicer Rankings (
North American CMBS Insight Model v 1.2.0.0: https://dbrs.morningstar.com/research/428797
For more information on this credit or on this industry, visit dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.
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