OREANDA-NEWS. Fitch Ratings has affirmed the notes issued by German Residential Funding 2013-1 Limited (GRF 2013-1), German Residential Funding 2013-2 Limited (GRF 2013-2) and Taurus 2013 (GMF1) PLC. The Outlook on the notes is Stable.

The transactions securitise portfolios of multifamily housing assets located across Germany, with concentrations in Berlin, Hamburg, Lower Saxony and Dresden. The sponsor of the SPVs is Vonovia SE, formerly GAGFAH Group.

A full list of rating actions follows at the end of this rating action commentary.

KEY RATING DRIVERS
The performance of the three portfolios of multifamily housing assets has been stable, supported by steady demand for affordable housing in German cities. Vacancy decreased further over the course of 2015, with each portfolio now reporting vacancy levels of less than 5% by contracted rent. At the same time, residential rents have been steadily rising, reaching on average EUR5.5/sq m per month for the assets located in western Germany and EUR5.1/sq m for the Dresden assets, compared with EUR5.4/sq m and EUR5.0/sq m, respectively in 2014.

Operating costs have been well-contained, resulting in stable to rising levels of net operating income. In addition, the portfolios have seen steady capital expenditure which - while lowering free cash flow in the short term - is key to maintaining the long-term appeal of the portfolio.

Fitch estimates 'Bsf' collateral value as follows:

GRF 2013-1: EUR2.5bn
GRF 2013-2: EUR868m
Taurus 2013 (GMF1): EUR1.5bn

RATING SENSITIVITIES
A rising cost base or worsening economic conditions could negatively affect the performance of the transactions, by reducing the free cash flow available for debt service.

On the other hand, evidence that underlying rental growth is sustainable (ie structural rather than cyclical) may lead to rating upgrades.

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

DATA ADEQUACY
Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pools and the transactions. There were no findings that were material to this analysis.
Prior to the transaction closing, Fitch reviewed the results of a third party assessment conducted on the asset portfolio information, which indicated no adverse findings material to the rating analysis.

Overall, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable.

SOURCES OF INFORMATION
The information below was used in the analysis.
-Transaction reporting provided by the servicers as at end-November 2015

REPRESENTATIONS AND WARRANTIES
A comparison of the transaction's Representations, Warranties & Enforcement Mechanisms to those typical for the asset class is available by accessing the appendix that accompanies the initial new issue report (see German Residential Funding 2013-1 Limited - Appendix, dated 1 October 2013, German Residential Funding 2013-2 Limited - Appendix, dated 21 October 2013 and Taurus 2013 (GMF1) PLC - Appendix, dated 16 Mary 2013 at www.fitchratings.com). In addition refer to the special report "Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions" dated 12 June 2015 available on the Fitch website.

Fitch has affirmed the following ratings:

German Residential Funding 2013-1 Limited:
EUR200.1m senior debt: not rated
EUR1,152.5m class A due August 2024 (ISIN XS0944452563): affirmed at 'AAAsf'; Outlook Stable
EUR222.1m class B due August 2024 (ISIN XS0944452993): affirmed at 'AAsf'; Outlook Stable
EUR127m class C due August 2024 (ISIN XS0944453967): affirmed at 'Asf'; Outlook Stable
EUR253.8m class D due August 2024 (ISIN XS0944454858): affirmed at 'BBBsf'; Outlook Stable
EUR95.2m class E due August 2024 (ISIN XS0944455152): affirmed at 'BBB-sf'; Outlook Stable

German Residential Funding 2013-2 Limited:
EUR74.6m senior debt: Not rated
EUR418.7m class A due November 2024 (ISIN XS0973049983): affirmed at 'AAAsf'; Outlook Stable
EUR81.2m class B due November 2024 (ISIN XS0973050569): affirmed at 'AAsf'; Outlook Stable
EUR52.2m class C due November 2024 (ISIN XS0973050726): affirmed at 'Asf'; Outlook Stable
EUR58m class D due November 2024 (ISIN XS0973051021): affirmed at 'BBBsf'; Outlook Stable
EUR23.2m class E due November 2024 (ISIN XS0973051294): affirmed at 'BBB-sf'; Outlook Stable
EUR46.4m class F due November 2024 (ISIN XS0973051450): affirmed at 'BBsf'; Outlook Stable
EUR36.9m class G due November 2024 (ISIN XS0977930261): not rated

Taurus 2013 (GMF1) PLC:
EUR681.9m class A due May 2024 (ISIN XS0932026353): affirmed at 'AAAsf'; Outlook Stable
Deferred Arrangement Fee Certificates (DACs) (ISIN XS0933680539) due May 2024 and referenced to the notional balance of the class A notes: affirmed at 'Asf'; Outlook Stable
EUR124.9m class B due May 2024 (ISIN XS0932027245): affirmed at 'AAsf'; Outlook Stable
EUR115.3m class C due May 2024 (ISIN XS0932027831): affirmed at 'Asf'; Outlook Stable
EUR91.2m class D due May 2024 (ISIN XS0932028219): affirmed at 'BBBsf'; Outlook Stable
EUR19m class E due May 2024 (ISIN XS0932028300): affirmed at 'BBBsf'; Outlook Stable