Fitch Affirms NationsLink Funding Corp. Series 1999-LTL-1.Business Editors CHICAGO--(BUSINESS WIRE)--Sept. 23, 2002 Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. affirms NationsLink Funding Corporation's commercial loan 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 1999-LTL-1, $34.1 million class A-1, $193.9 million class A-2, $127.3 million class A-3 and interest-only class X at 'AAA'. In addition, Fitch affirms the following classes: $25.9 million class B at 'AA' and $20.9 million class C at 'A'. Fitch does not rate classes D, E, F or G. The rating affirmations follow Fitch's annual review of the transaction, which closed in March 1999. The certificates are collateralized by 127 fixed-rate mortgage loans and one participation interest in a mortgage loan, secured by 128 commercial properties. The pool consists primarily 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. (CTL See control key. 1. CTL - Checkout Test language. 2. CTL - Compiler Target Language. 3. CTL - Computational Tree Logic ) loans, contributing to 78% of the pool by balance. There are also 17 traditional conduit loans and one large loan, which comprise 13.3% and 8.7% of the pool respectively. The transaction is geographically diverse across 28 states. There are no delinquent loans and one loan (2.6%) in special servicing. The loan in special servicing is a CTL loan secured by a property leased to Georgia Baptist Hospital. The loan transferred due to imminent default as the tenant indicated they will be closing their health care operation and vacating the building. The special servicer, Midland Loan Services, L.P., is currently negotiating with the borrower and the tenant to reach an optimal solution for the bondholders. The loan has remained current throughout the negotiations. The largest loan in the pool, Broadway at the Beach, is secured by a 342,705 square foot open-air entertainment center located in Myrtle Beach, SC. The debt service coverage ratio The debt service coverage ratio (DSCR), or debt service ratio, is the ratio of net operating income to debt payments on a piece of investment real estate. It is a popular benchmark used in the measurement of an income-producing property’s ability to produce (DSCR DSCR See: Debt-service coverage ratio ) remains strong at 2.07 times (x) at year end (YE) 2001, compared to 1.93 as of YE 2000 and 1.60x at issuance. DSCR is calculated using net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the property and actual debt service. The weighted average DSCR for the 17 conduit loans remains stable at a 1.49x as of YE 2001 compared to 1.50x as of YE 2000 and 1.42x at issuance. One of these loans, the Ridgeway A ridgeway is a road or path that follows the highest part of the landscape. Roads and pathways
The CTL portion of the pool is comprised of 109 loans and one participation in a loan, secured by leases on 110 properties. The leases are guaranteed by 35 different credits tenants. Overall, the ratings of the tenants have declined since issuance. Some of the tenant exposure is to Rite-Aid, Eckerd Corp., Pep Boys, and Circuit City among others. While Fitch has concerns with the specially serviced loan, the Ridgeway Inn and the decline in the credit of the CTL loans, the credit enhancement Credit Enhancement A method whereby a company attempts to improve its debt or credit worthiness. Notes: Credit enhancements take many different forms. An example of a credit enhancement would be conversion rights added on to a debt instrument in order to lower the issuing remains sufficient to affirm the ratings on the transaction. |
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