CNC Series 1994-1 P-T Certificates Downgraded By Fitch.Business Editors NEW YORK--(BUSINESS WIRE)--Jan. 8, 2002 CNC's pass-through certificates Pass-Through Certificates (PTCs) are instruments that evidence the ownership of two or more Equipment Trust Certificates. In other words, Equipment Trust Certificates may be bundled into a pass-through structure as a means of diversifying the asset pool and/or increasing the size , series 1994-1 classes are downgraded by Fitch as follows: $39.1 million class A-1, $38 million class A-2 and $35.3 million class A-3 to 'A' from 'AA'; $9.8 million class B to 'BB' from 'BBB'; $7.8 million class C to 'B' from 'BB'; and $7.8 million class D to 'B-' from 'BB'. The rating actions follow Fitch's review of the transaction as a result of the revision of Fitch's corporate rating of Kmart. The transaction closed in March 1994. The rating downgrades are a result of further deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in the credit ratings of the largest tenant concentration, Kmart. Fitch downgraded its ratings of Kmart to 'B+' from 'BB+' and revised the Rating Outlook to Negative from Stable (see press release dated Jan. 7, 2002). Currently Kmart represents 45% of transaction's outstanding balance. Other major tenants include Wal-Mart 38% and Food Lion Food Lion LLC is an American grocery store company headquartered in Salisbury, North Carolina that operates approximately 1,300 supermarkets in 11 Southeast and Mid-Atlantic states under the Food Lion, Harveys, Bloom, Bottom Dollar, and Reid's nameplates. 11%. The ratings of credit tenant lease A credit tenant lease is a method of financing real estate. The landlord borrows money to finance the property and pledges as security the rents to be received from the tenant. transactions are highly sensitive Adj. 1. highly sensitive - readily affected by various agents; "a highly sensitive explosive is easily exploded by a shock"; "a sensitive colloid is readily coagulated" to the movements of the corporate credit ratings of the underlying tenants. When the 45% of the pool secured by Kmart leases were lowered one full category, the resulting subordination levels generated by Fitch's analysis necessitated the downgrades. Fitch will continue to monitor the transaction, as surveillance is ongoing. |
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