Fitch Affirms LB Commercial Mortgage Trust Series 1999-C2.

Business Editors

CHICAGO--(BUSINESS WIRE)--Jan. 8, 2004

LB Commercial Mortgage Trust's commercial mortgage pass-through certificates, series 1999-C2 are affirmed by Fitch as follows:

-- $215.6 million class A-1 'AAA';

-- $450.02 million class A-2 'AAA';

-- Notional class X 'AAA';

-- $37.93 million class B 'AA';

-- $37.93 million class C 'A';

-- $13.39 million class D 'A-';

-- $23.43 million class E 'BBB';

-- $12.27 million class F 'BBB-'.

Fitch does not rate classes G through P.

The rating affirmations are the result of stable to improved performance and limited paydown of the underlying collateral. As of the December 2003 distribution date, the transaction's collateral balance has been reduced by 4.4% since issuance, to $853 million from $892.4 million.

Wachovia Securities, as master servicer, collected year-end (YE) 2002 operating statements for 100% of the loans. The weighted average debt service coverage ratio (WADSCR) was 1.73 times (x) at YE 2002, compared to 1.45x at issuance. Approximately 4.4% of the transaction had DSCRs less than 1.00x.

There are currently four loans (2.4%) in special servicing, including three 90 days delinquent (2.3%) loans and one loan (0.1%) in foreclosure. These loans consist of two multifamily properties, one office property and one mobile home park. The expected losses attributed to these loans are not expected to affect the Fitch rated classes.

The largest loan (16.4%) in the transaction is secured by the Sun America Center, an office property located in Century City, West Los Angeles, CA. The servicer reported DSCR has remained stable since issuance at 2.25x, compared to 2.26x at issuance.

The second largest loan (14.4%) in the transaction is secured by the A note ($123.1 million) of the Century City Mall loan. The B note ($32 million) secures a separate trust rated by Fitch, LB Series 1999-C2A. The Mall, located in Century City, CA, contains approximately 784,000 square feet and is 94% occupied. Fitch analyzed the borrower reported financial statements as of YE 2002. The Fitch net cash flow (NCF), which was adjusted for normalized capital costs and non-cash items, was approximately $20.4 million, compared to $18 million at issuance. The DSCR using a refinance constant of 9% and the actual loan balance, was 1.45x at YE 2002, compared to 1.32x at issuance. Given the improved performance, the loan maintains an investment grade credit assessment.

While Fitch is concerned with the concentrations as the top two loans represent 30.8% of the pool and both are located in the same market, the two loans continue to perform well and the concentrations were taken into consideration when remodeling the pool.