Morningstar Credit Ratings Assigns Preliminary Ratings for FREMF 2014-K716 Mortgage Trust, Multifamily Mortgage Pass-Through Certificates, Series 2014-K716 (FREMF 2014-K716) and Freddie Mac Structured Pass-Through Certificates, Series K716 (SPC K716) - Morningstar (NASDAQ:MORN)

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)
Class	Balance/ Notional Amt.	Preliminary Ratings	Morningstar DSCR	Morningstar BLTV	Morningstar ELTV	Credit Support Levels
FREMF 2014-K716 Multifamily Mortgage Pass-Through Certificates
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
Freddie Mac Structured Pass-Through Certificates
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

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. 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.

MORN-R

Media Contacts:
Michelle Weiss, +1 267-960-6014 or michelle.weiss@morningstar.com
Nadine Youssef, +1 312-696-6601 or nadine.youssef@morningstar.com

SOURCE Morningstar, Inc.

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