1251 Ave Of The Americas Remains On Rating Watch Negative By Fitch.

Business Editors

NEW YORK--(BUSINESS WIRE)--Dec. 9, 2002

1251 Avenue of the Americas Trust's, series 1999-XL1251 $42.2 million class A-1, $188.0 million class A-2, and $343.4 million class X, currently rated 'AAA' remain on Rating Watch Negative following Fitch Rating's annual review of the transaction. Fitch also removes from Rating Watch Negative the $60.4 million class B and affirms its rating at 'AA'. The following classes are affirmed as follows: the $52.8 million class C at 'A', the $21.9 million class D at 'A-', and the $67.4 million class E at 'BBB'. The transaction closed on April 29, 1999.

Class B is removed from Rating Watch after reassessing the risk level of the asset. Classes A-1, A-2, and X remain on Rating Watch Negative after reviewing the amount of terrorism specific insurance available to the property and the recent signing of the Terrorism Risk Insurance Act of 2002 (the Act), which was signed on November 26, 2002. Prior to the passage of the Act, the borrower obtained various terrorism specific insurance policies, which expire in September 2003. These policies provide coverage in an amount lower than the current outstanding balance on the 'AAA' rated classes A-1 and A-2. With the passage of the Act, however, all terrorism exclusions in place under the existing all-risk policy, which provides coverage in excess of the outstanding class A-1 and A-2 balances, are temporarily suspended. Within the next 90 days, which commenced upon the passage of the bill, the borrower should be notified by its insurance provider of the change in coverage for terrorism exposure under the all-risk policy and of any change in premium to reflect the additional coverage. The borrower will then have the opportunity to decide whether or not it elects the additional coverage. Fitch will maintain classes A-1, A-2, and X on Rating Watch Negative during this determination period.

As part of this review, Fitch also analyzed the operating performance of the collateral. Based on full-year operating results through year-end (YE) 2001 and year-to-date (YTD) results through June 30, 2002, the property's operating performance has improved since issuance. Fitch's net cash flow (NCF), which was adjusted for on-going reserves and non-cash items, for YE 2001, was $62.8 million, compared to $60.5 million for YE 2000 and $56.8 million at issuance. The YE 2001 debt service coverage ratio improved to 1.61 times (x) from 1.40x at issuance, based on a 9.0% refinance constant and the actual loan balance. YTD operating performance through June 30, 2002 was stable.

Classes C through E are affirmed given the stable operating performance of the collateral. Fitch will review fourth quarter 2002 operating results as soon as they are available. In reviewing fourth quarter results, Fitch will be looking for any increases in insurance expenses and their effect on NCF.

The certificates evidence interest in a trust fund consisting of a first mortgage loan, with a current balance of $433 million, secured by ownership interests in 1251 Avenue of the Americas. The ownership interests are in the form of a fee mortgage on 51 of 56 commercial condominium units and a leasehold interest in the remaining five units. Originally completed in 1972 for the Exxon Corporation as its world headquarters, 1251 Avenue of the Americas is a multi-tenanted Midtown Manhattan office building located at the southeast corner of 6th Avenue and 50th Street in Manhattan. Comprising 2.3 million square feet (sf), the property is currently 99% leased and 99% occupied. Approximately 50% of the space is leased to long-term credit tenants.