OREANDA-NEWS. Fitch Ratings has upgraded two classes of notes from Banc of America Funding 2012-R4 Trust (BAFC 2012-R4) and Banc of America Funding 2012-R5 Ltd. (BAFC 2012-R5). The Rating Outlook is Stable.

KEY RATING DRIVERS

The upgrade of the class A notes of BAFC 2012-R4 and the upgrade of the class A notes of BAFC 2012-R5 are attributed to the improved credit enhancement (CE) available to the notes as a result of significant deleveraging of the capital structure since the transactions last review in June 2015 and the likelihood that these classes will be paid in full within the next few months.

The class A notes of BAFC 2012-R4 received $90.4 million in principal redemptions and excess spread over the last 12 months, leaving only $14.2 million or 2.8% of the original balance outstanding. The average of the monthly payments to the class A notes over the last year was $7.5 million. Assuming this rate of amortization, Fitch expects the notes to be paid in full within the next two to three months.

The class A notes of BAFC 2012-R5 received $166.0 million in principal redemptions over the last 12 months, leaving only $53.2 million or 7.6% of the original balance outstanding. The average of the monthly payments to the class A notes over the last year was $13.9 million. Assuming this rate of amortization, Fitch expects the notes to be paid in full within the next four to five months.

BAFC 2012-R4 is a re-securitization of 82.6% of the class A-1 notes issued by Triaxx Prime CDO 2006-1, Ltd. (Triaxx 2006-1), with the current notional value of $443.6 million. The underlying portfolio of Triaxx 2006-1 is predominantly non-prime RMBS from 2005, 2006, and 2007 vintages.

BAFC 2012-R5 is a re-securitization of 96.2% of the class A-1A notes and 70.1% of the A-B2 notes issued by Triaxx Prime CDO 2006-2, Ltd (Triaxx 2006-2). The classes' current outstanding balances are $185.3 million and $370.6 million respectively. The underlying portfolio of Triaxx 2006-2 is predominantly non-prime RMBS from 2006 and 2007 vintages.

RATING SENSITIVITIES

The ratings of the BAFC 2012-R4 and BAFC 2012-R5 class A notes are sensitive to significantly lower recoveries in the underlying portfolio, but given the expected payoff in the next few months, that sensitivity is limited.

DUE DILIGENCE USAGE

No third party due diligence was provided or reviewed in relation to this rating action.

Assessments of both transaction's representations and warranties were completed at close and were found to be consistent with the ratings assigned to the notes. For further information, see 'Banc of America Funding 2012-R4 Trust Representations and Warranties Appendix', dated Aug. 2, 2012 and 'Banc of America Funding 2012-R5 Ltd Representations and Warranties Appendix', dated June 29, 2012.

Fitch has upgraded the following ratings:

Banc of America Funding 2012-R4

--$20,072,171 class A notes to 'AAAsf' from 'Asf', Outlook Stable.

Banc of America Funding 2012-R5 Ltd.

--$65,557,282 class A notes to 'AAAsf' from 'Asf', Outlook Stable.

Fitch does not rate the class M certificates of BAFC 2012-R4 or the class M, M1, M2, M3 and M4 certificates of BAFC 2012-R5.