OREANDA-NEWS. Fitch Ratings has assigned the following ratings and Rating Outlooks to FREMF 2016-K53 multifamily mortgage pass-through certificates and Freddie Mac structured pass-through certificates series K-053:

FREMF 2016-K53 Multifamily Mortgage Pass-Through Certificates
--$106,316,000 class A-1 'AAAsf'; Outlook Stable;
--$1,075,000,000 class A-2 'AAAsf'; Outlook Stable;
--$1,181,316,000* class X1 'AAAsf'; Outlook Stable;
--$1,181,316,000* class X2-A 'AAAsf'; Outlook Stable;
--$121,207,000 class B 'BBB+sf'; Outlook Stable;
--$36,182,000 class C 'BBB-sf'; Outlook Stable.

Freddie Mac Structured Pass-Through Certificates Series K-053
--$106,316,000 class A-1 'AAAsf'; Outlook Stable;
--$1,075,000,000 class A-2 'AAAsf'; Outlook Stable;
--$1,181,316,000* class X1 'AAAsf'; Outlook Stable.

*Notional amount and interest only.

Fitch did not rate the following classes of FREMF 2016-K53: the $265,932,870 interest-only class X3, the $265,932,870 interest only class X2-B, or the $108,543,870 class D.

Additionally, Fitch did not rate the following class of Freddie Mac structured pass-through certificates series K-053: the $265,932,870 interest-only class X3.

The certificates represent the beneficial interests in a pool of 88 commercial mortgages secured by 88 properties. The Freddie Mac structured pass-through certificates series K-053 (Freddie Mac SPC K-053) represents a pass-through interest in the corresponding class of securities issued by FREMF 2016-K53. Each Freddie Mac SPC K-053 security has the same designation as its underlying FREMF 2016-K53 class. All loans were originated specifically for Freddie Mac by approved Seller Servicers. The certificates follow a sequential-pay structure.

Fitch reviewed a comprehensive sample of the transaction's collateral, including site inspections on 68.5% of the properties by balance and cash flow analysis of 75.8% of the pool.

The transaction has a Fitch stressed debt service coverage ratio (DSCR) of 1.06x, a Fitch stressed loan-to value (LTV) of 113.6%, and a Fitch debt yield of 7.42%. Fitch's aggregate net cash flow represents a variance of 9.31% to issuer cash flows.

KEY RATING DRIVERS

Fitch Leverage: The pool's Fitch DSCR and LTV are 1.06x and 113.6%, respectively. While the DSCR is in line with Fitch-rated, 10-year, K-Series Freddie Mac deals in 2015, the LTV represents lower leverage. The 2015 average DSCR and LTV for Fitch-rated, 10-year, K-series Freddie Mac deals was 1.08x and 115%, respectively. In addition, 43.9% of the loans in the pool have a Fitch DSCR lower than 1.00x; the average 2015 percentage was 49.7%.

Below-Average Pool Amortization: Within the pool, 31 loans representing 36.6% of the pool are full-term interest only, and 38 loans representing 49.7% of the pool have partial-term interest-only components. Based on the loans' scheduled maturity balance, the pool is expected to amortize 8.1% during the life of the transaction. This is below recent amortization levels for Freddie Mac securitizations, which had an average of 10.2% for 2015 Fitch-rated, 10-year, K-series Freddie Mac deals.

Manufactured Housing and Healthcare Concentration: Ten loans (6.6% of the pool) and two loans (4.4% of the pool) are classified as Manufactured Housing and Healthcare, respectively. Manufactured Housing and Healthcare are considered more volatile and/or require more operational experience than traditional multifamily assets. The average 2015 Fitch-rated, 10-year, K-Series Freddie Mac property concentrations for Manufactured Housing and Healthcare was 5.8% and 1.9%, respectively.

Tenants In Common (TIC) Ownership Structure: Four loans (7.5% of the pool) have a Tenants In Common ownership structure. Recent Fitch-rated, 10-year, K-Series Freddie Mac transactions have had a TIC ownership structure ranging from 1.7% to 8.7%.

RATING SENSITIVITIES

Fitch performed two model-based break-even analyses to determine the level of cash flow and value deterioration the pool could withstand prior to $1 of loss being experienced by the 'BBB-sf' and 'AAAsf' rated classes. Fitch found that the FREMF 2016-K53 pool could withstand a 45.1% decline in value (based on appraised values at issuance) and an approximately 21.3% decrease to the most recent actual cash flow prior to experiencing $1 of loss to any 'AAAsf' rated class. Additionally, Fitch found that the pool could withstand a 37.8% decline in value and an approximately 10.8% decrease in the most recent actual cash flow prior to experiencing $1 of loss to the 'BBB-sf' rated class.