NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has issued a presale report on FREMF 2011-K704 multifamily mortgage pass-through certificates and Freddie Mac structured pass-through certificates, series K-704.

Fitch expects to rate the transaction and assign Rating Outlooks as follows:

FREMF 2011-K704 Multifamily Mortgage Pass-Through Certificates

--$79,462,000 class A-1 'AAAsf'; Outlook Stable;

--$929,488,000 class A-2 'AAAsf'; Outlook Stable;

--$1,008,950,000* class X1 'AAAsf'; Outlook Stable;

--$103,754,000 class B 'BBB+sf'; Outlook Stable.

Freddie Mac Structured Pass-Through Certificates, Series K-704

--$79,462,000 class A-1 'AAAsf'; Outlook Stable;

--$929,488,000 class A-2 'AAAsf'; Outlook Stable;

--$1,008,950,000* class X1 'AAAsf'; Outlook Stable.

*Notional amount and interest only.

The expected ratings are based on information provided by the issuer as of Nov. 2, 2011. Fitch does not expect to rate the $1,202,923,817 interest-only class X2, the $193,973,817 interest-only class X3, the $84,134,542 class C-1, or the $6,085,275 class C-2.

The certificates represent the beneficial interests in a pool of 65 commercial mortgages secured by 65 properties. The Freddie Mac structured pass-through certificates, series K-704 (Freddie Mac SPC K704) represents a pass-through interest in the corresponding class of securities issued by FREMF 2011-K704. Each Freddie Mac SPC K704 security has the same designation as its underlying FREMF 2011-K704 class. All loans were originated by various seller/servicers according to the guidelines of the Freddie Mac Capital Markets Execution (CME) product. The certificates follow a sequential-pay structure.

Fitch reviewed a comprehensive sample of the transaction's collateral, including site inspections on 72.2% of the properties by balance and cash flow analysis of 80.1% of the pool.

The transaction has a Fitch stressed debt service coverage ratio (DSCR) of 1.06 times (x), a Fitch stressed loan-to value (LTV) of 105.2%, and a Fitch debt yield of 7.6%. Fitch's aggregate net cash flow represents a variance of 4.8% to issuer cash flows.

The Master Servicer and Special Servicer will be Wells Fargo Bank, N.A., rated 'CMS2' and 'CSS2-', respectively, by Fitch.

The presale report is available at 'www.fitchratings.com'.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions', Aug. 12, 2011;

--'U.S. Commercial Mortgage Servicer Rating Criteria', Feb. 18, 2011;

--'Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions', Nov. 17, 2010;

--'Global Structured Finance Rating Criteria', Aug. 4, 2011;

--'Criteria for Special-Purpose Vehicles in Structured Finance Transactions', June 13, 2011.

Applicable Criteria and Related Research: FREMF 2011-K704 Multifamily Mortgage Pass-Through Certificates and Freddie Mac Structured Pass-Through Certificates, Series K704 (US CMBS)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=655461

Criteria for Analyzing Multiborrower U.S. Commercial Mortgage Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=647671

U.S. Commercial Mortgage Servicer Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=584005

Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=574208

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=646569

Criteria for Special-Purpose Vehicles in Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=635249

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CONTACT:

Fitch Ratings
Sandro Scenga, +1-212-908-0278
Media Relations, New York
sandro.scenga@fitchratings.com
or
Primary Analyst:
Aniello Forcellati, +1-212-908-0747
Director
Fitch, Inc.
One State Street Plaza
New York, NY 10004
or
Committee Chairperson:
Eric Rothfeld, +1-212-908-0761
Managing Director

KEYWORDS:   United States  North America  New York

INDUSTRY KEYWORDS:   Professional Services  Banking  Finance

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