OREANDA-NEWS. Fitch Ratings has affirmed six classes of FREMF 2012-K706 multifamily mortgage pass-through certificates and three classes of Freddie Mac structured pass-through certificates, series K-706. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The affirmations are based on the stable performance of the underlying collateral pool. As of the November 2015 distribution date, the pool has had no delinquent or specially serviced loans since issuance. The pool's aggregate principal balance has been paid down by 4.4% to $1.17 billion from $1.23 billion at issuance. Additionally, the number of defeased loans has increased to eight (13.5% of the pool). The pool's overall net operating income (NOI) has improved, with an 18% NOI increase compared to issuer underwriting at issuance.

The largest loan (10.3% of the pool) is secured by Crystal Plaza, a 539-unit, high-rise apartment complex situated on approximately five acres in Arlington, VA. The property was built in 1967 and underwent capital improvements in 2003. The property benefits from attractive amenities, proximity to Washington, D.C., and access to public transportation, employment centers, retail shopping, and major thoroughfares. Amenities include an outdoor swimming pool, barbecue grills and outdoor dining tables, 24-hour concierge, two 24-hour fitness centers, internet lounge, central courtyard, game room, business center, rooftop sundeck, conference room, library, two laundry facilities, and garage parking. Occupancy was 94% as of June 2015, which is in-line with occupancy at issuance.

The second largest loan (5.1% of the pool) is secured by Paradise Island, a 1,112-unit, 55-building apartment complex located in Jacksonville, FL. The property was developed in four phases between 1990 and 1999 and renovated in 2010. Property amenities include four swimming pools, a community center, leasing and management offices, laundry facilities, fitness centers, racquetball, tennis, and volleyball courts, a car wash, and garages. Occupancy was 95% as of June 2015 compared to 92.5% as of January 2012 at issuance. The loan contains a $59.6 million A-note and a $10 million subordinate B-note.

The third largest loan (3.8% of the pool) is secured by Cascade Ridge Apartments, a 518-unit, 48 building multifamily property located in Federal Way, WA between Tacoma and Seattle. The property was built in 1989 and renovated from 2007-2008. The property is situated on 29 acres, approximately 10 miles north of Tacoma and features an attractive amenities package. Occupancy was 92% as of June 2015 compared to 93% at issuance.

RATING SENSITIVITIES

The Rating Outlooks on all classes remain Stable. Fitch does not foresee positive or negative ratings migration until a material economic or asset level event changes the transaction's overall portfolio-level metrics. Additional information on rating sensitivity is available in the 'FREMF 2012-K706 Multifamily Mortgage Pass-Through Certificates and Freddie Mac Structured Pass-Through Certificates, Series K-706' (March 12, 2012) new issue report, available at www.fitchratings.com.

DUE DILIGENCE USAGE

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

Fitch has affirmed the following ratings as indicated:

FREMF 2012-K706 Multifamily Mortgage Pass-Through Certificates
--$35.8 million class A-1 at 'AAAsf'; Outlook Stable;
--$933.0 million class A-2 at 'AAAsf'; Outlook Stable;
--$968.8 million* class X1 at 'AAAsf'; Outlook Stable;
--$968.8 million* class X2-A at 'AAAsf'; Outlook Stable;
--71.4 million class B at 'Asf'; Outlook Stable;
--30.4 million class C at 'BBBsf'; Outlook Stable.

Freddie Mac Structured Pass-Through Certificates, Series K-706
--$35.8 million class A-1 at 'AAAsf'; Outlook Stable;
--$933.0 million class A-2 at 'AAAsf'; Outlook Stable;
--$968.8 million* class X1 at 'AAAsf'; Outlook Stable.

*Notional amount and interest only.

Of FREMF 2012-K706, Fitch does not rate the $193.0 million interest-only class X2-B, the $193.0 million interest-only class X3, the $91.2 million class D, or $10.0 million class P. Of the Freddie Mac Structured Pass-Through Certificates, Series K-706, Fitch does not rate the $193.0 million interest-only class X3.