OREANDA-NEWS. Fitch Ratings has affirmed German Residential Funding 2013-2 PLC's notes as follows:

EUR74.6m senior debt: Not rated
EUR420.9m class A due November 2024 (ISIN XS0973049983): affirmed at 'AAAsf'; Outlook Stable
EUR81.6m class B due November 2024 (ISIN XS0973050569): affirmed at 'AAsf'; Outlook Stable
EUR52.4m class C due November 2024 (ISIN XS0973050726): affirmed at 'Asf'; Outlook Stable
EUR58.3m class D due November 2024 (ISIN XS0973051021): affirmed at 'BBBsf'; Outlook Stable
EUR23.3m class E due November 2024 (ISIN XS0973051294): affirmed at 'BBB-sf'; Outlook Stable
EUR46.7m class F due November 2024 (ISIN XS0973051450): affirmed at 'BBsf'; Outlook Stable
EUR36.9m class G due November 2024 (ISIN XS0977930261): not rated

The transaction is a refinancing of commercial mortgage loans previously granted for the acquisition of a portfolio of German multifamily housing (MFH) assets. The sponsor of the transaction is GAGFAH S.A., now controlled by Deutsche Annington Immobilien SE. As of end-March 2015, the portfolio primarily consisted of 22,462 residential and commercial units with a combined lettable area of 1.4m sq m.

KEY RATING DRIVERS
Operating performance of the German MFH portfolio has been in line with Fitch's expectations, underpinning whole-loan debt service cover/interest cover ratios reported as of end-March 2015 of 2x/2.3x. Residential rents have increased to EUR5.4 per sq m/month, up some EUR0.2per sq m per month since closing in October 2013 - just under the rate of price inflation. Irrecoverable costs relative to gross rental income have also risen to an annualised 40%, in line with Fitch's expectations. The agency will continue to monitor costs given their negative effect on free cash flow (although capital expenditure is vital in maintaining the appeal of the properties over the long term).

Despite property disposal activity carried out since closing (some 2% of units have so far been sold), the geographical portfolio composition is largely unchanged, with the most important exposure to the states of Lower Saxony (56% of appraised market value as of end-March 2015) and Hamburg (28%). Exposure to Germany's top 10 cities has increased slightly to 68.8%. Vacancy decreased to 5.4% as of end-March 2015 from 5.9% at closing.

Fitch estimates a 'Bsf' market value of the portfolio of EUR905m.

RATING SENSITIVITIES
Any disruption to the management of the portfolio or a sharp economic decline in the regions represented in the portfolio leading to deterioration in operating performance could prompt downgrades or revisions of the Outlooks to Negative.

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 pool and the transaction. There were no findings that were material to this analysis. Fitch has not reviewed the results of any third party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring.

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.
-Quarterly servicer report provided by the servicer as of end-May 2015
-Rent rolls provided by the servicer as of end-March 2015
-Cash management report provided by the cash manager as of end-May 2015