Fitch: No Imminent Concern for U.S. CMBS On Mills' Possible Sale.

CHICAGO -- The possible sale of all or part of the Mills Corp. (Mills) poses no imminent concern for the Fitch-rated U.S. CMBS transactions containing exposure to Mills, according to Fitch Ratings following a review of its entire U.S. CMBS portfolio.

Fitch has identified 13 properties across 14 U.S. CMBS transactions rated by Fitch, with exposure to Mills, with concentrations ranging from 1.3% for Ontario Mills in the GMACC 2001-C1 transaction, to 100% in the Whale 2002 Whale-1 transaction, now that the sole remaining property is Opry Mills. However, no rating adjustments need to be made at this time and any future rating actions would depend primarily on the operating performance of each property and its affect on the overall credit composition of its respective CMBS transaction.

'The underlying properties have continued to perform well in light of financial and regulatory concerns that came to light within the last year,' said Lauren Cerda, Senior Director, Fitch Ratings. 'On average, occupancy levels remain consistent with issuance numbers, net cash flow is in-line with Fitch's expectations and there is no imminent concern of default across the company's portfolio.'

However, with names like Simon Property Group, General Growth Properties and Vornado Realty Trust already cropping up as possible buyers, a possible sale of all or part of Mills brings to light a potential concern about who could buy the company, according to Cerda.

'While Mills' portfolio does include some traditional malls, they are more widely known as an operator of large hybrid malls which combine outlet, entertainment and traditional stores,' said Cerda. 'Therefore, a potential sale may necessitate that only a more specialized mall owner would be able to come in and purchase at least that portion of Mills' properties, leaving open the possibility that the portfolio could be split up between traditional mall operators and outlets.'

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