DBRS Morningstar Confirms All Classes of FREMF 2020-K113 Mortgage Trust, Series 2020-K113

DBRS Limited (DBRS Morningstar) confirmed the ratings on the following classes of Multifamily Mortgage Pass-Through Certificates, Series 2020-K113 issued by FREMF 2020-K113 Mortgage Trust, Series 2020-K113 as follows:

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class X1 at AAA (sf)
-- Class X2-A at AAA (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction since issuance. As of the June 2021 remittance, all of the original 62 fixed-rate loans, secured by multifamily properties and manufactured housing communities, remain in the pool with negligible collateral reduction since issuance. Only one loan (representing 0.1% of the pool) is currently in an amortization period, while 42 loans, representing 70.3% of the current pool balance, are partial interest-only (IO) loans still in their IO periods, and the remaining 19 loans, representing 29.6% of the current pool balance, are full-term IO loans. The DBRS Morningstar weighted-average (WA) debt service coverage ratio (DSCR) was 1.64 times (x). Loans representing 88.4% of the pool reported YE2020 financials and reported a WA DSCR of 2.15x. The pool contains two groups of cross-collateralized and cross-defaulted loans collectively representing 8.3% of the current pool balance. When considering the cross-collateralized groups as single loans, the top 15 loans represent approximately 59.8% of the current pool balance.

As of June 2021, the servicer’s watchlist reported five loans, representing 4.3% of the current pool balance, all of which are being monitored for occupancy rates below 80.0%. All five loans are performing and reported DSCRs above 1.75x at YE2020. There are no loans in special servicing or delinquent as of the June 2021 remittance.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/373262.

Classes X1 and X2-A are IO certificates 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 ratings are subject to surveillance, which could result in ratings being upgraded, downgraded, placed under review, confirmed, or discontinued by DBRS Morningstar.

The DBRS Viewpoint platform provides additional information on this transaction and underlying loans including DBRS Morningstar metrics, commentary, servicer-reported cash flows, and other performance-related data.

For complimentary access to this content, please register for the DBRS Viewpoint platform at www.viewpoint.dbrsmorningstar.com. The platform includes issuer and servicer data for most outstanding CMBS transactions (including non-DBRS Morningstar rated), as well as loan-level and transaction-level commentary for most DBRS Morningstar-rated and -monitored transactions.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is North American CMBS Surveillance Methodology (March 26, 2021), which can be found on dbrsmorningstar.com under Methodologies & Criteria. For a list of the structured-finance-related methodologies that may be used during the rating process, please see the DBRS Morningstar Global Structured Finance Related Methodologies document, which can be found on dbrsmorningstar.com in the Commentary tab under Regulatory Affairs. Please note that not every related methodology listed under a principal structured finance asset class methodology may be used to rate or monitor an individual structured finance or debt obligation.

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/357883.

For more information regarding structured finance rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/358308.

For more information regarding the structured finance rating approach and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/359905.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at info@dbrsmorningstar.com.

The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the rating process. Please note a sensitivity analysis is not performed for CMBS bonds rated CCC or lower. The DBRS Morningstar long-term rating scale definition indicates that ratings of CCC or lower are assigned when the bond is highly likely to default or default is imminent, thereby prevailing over a sensitivity analysis.

For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com.

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