NEW YORK, Jan. 6, 2014 /PRNewswire/ -- Morningstar Credit Ratings, LLC today assigned preliminary ratings for the commercial mortgage-backed securities (CMBS) transaction FREMF 2014-K714 Mortgage Trust, Multifamily Mortgage Pass-Through Certificates, Series 2014-K714. The preliminary ratings are based on information known to Morningstar as of Jan. 6, 2014.



    PRELIMINARY RATINGS (AS OF JAN. 6, 2014)
    ---------------------------------------

                                      Balance/             Preliminary Morningstar     Morningstar       Morningstar       Credit
                                                                           DSCR            BLTV              ELTV          Support
            Class                   Notional Amt             Ratings                                                       Levels
            -----                   ------------             -------                                                       ------

    Class
     A-1                                      $103,940,000     AAA        1.73x                    73.5%             64.8%        16.13%

    Class
     A-2                                      $953,000,000     AAA        1.73x                    73.5%             64.8%        16.13%

    Class
     X-1                                    $1,056,940,000     AAA                 N/A              N/A               N/A           N/A

    Class
     X2-A                                   $1,056,940,000     AAA                 N/A              N/A               N/A           N/A

    Class
     X2-B                                     $203,197,429     AAA                 N/A              N/A               N/A           N/A

    Class
     X3                                       $203,197,429     NR                  N/A              N/A               N/A           N/A

    Class B                                    $77,183,000     A-         1.61x                    78.8%             70.1%        10.00%

    Class C                                    $31,504,000    BBB+        1.57x                    81.0%             72.3%         7.50%

    Class D                                    $94,510,429     NR         1.45x                    87.6%             78.9%         0.00%
    -------                                    -----------     ---        -----                    ----              ----          ----

The key characteristics of the transaction supporting FREMF 2014-K714 are:


    --  Seventy-three fixed-rate, first-lien mortgage loans secured by 73
        multifamily properties;
    --  Initial pool balance of $1.26 billion;
    --  Each loan is a balloon loan and has a seven-year (84-month) term;
    --  No subordinate or mezzanine debt is included in the transaction at
        securitization;
    --  Collateral properties are in 24 states and the District of Columbia; and
    --  The 10 largest loans are 34.5 percent of the aggregate pool balance, and
        the largest loan, Northampton Apartments, represents 5.4 percent.

Based on information provided on the arranger's website, Morningstar's analysis of the loan yielded the following Morningstar metrics:


    --  Aggregate property net cash flow (NCF) of $100.5 million;
    --  Morningstar's aggregate NCF is lower than the arranger's NCF by 2.8
        percent;
    --  Morningstar weighted-average amortizing debt service coverage ratio
        (DSCR) of 1.45x based on the actual loan payment terms;
    --  Morningstar aggregate property value of $1.44 billion, 23.1 percent
        lower than the aggregate appraised value; and
    --  Morningstar weighted-average beginning and ending loan-to-value (LTV)
        ratios of 87.6 percent and 78.9 percent, respectively.

For complete details about the preliminary ratings for this transaction, Morningstar's Pre-Sale analysis package, including the Pre-Sale Report, Asset Summary Reports, Loan Analysis Summary Table, and the Representations, Warranties and Enforcement Mechanisms, is available under the "Ratings Reports" tab on https://ratingagency.morningstar.com. Information subsequently received could result in the assignment of final ratings that differ from the preliminary ratings.

About Morningstar Credit Ratings, LLC and Morningstar, Inc.
Morningstar Credit Ratings, LLC is a Nationally Recognized Statistical Rating Organization (NRSRO) that specializes in structured credit research and ratings, and offers a wide array of services including new-issue ratings and analysis, operational risk assessments, surveillance services, data, and technology solutions.

Morningstar Credit Ratings, LLC is a subsidiary of Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research in North America, Europe, Australia, and Asia.

Morningstar, Inc. offers an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. Morningstar provides data on approximately 437,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 10 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its registered investment advisor subsidiaries and has more than $176 billion in assets under advisement and management as of Sept. 30, 2013. The company has operations in 27 countries.

Morningstar, Inc. is not an NRSRO and its credit ratings on corporate and municipal issuers are not NRSRO credit ratings.

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Media Contact:
Michelle Weiss, +1 267-960-6014 or michelle.weiss@morningstar.com

SOURCE Morningstar, Inc.