Fitch Downgrades 1 & Upgrades 7 Classes of COMM 2000-C1.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- 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. downgrades the long-term credit rating and distressed recovery (DR) rating(1) of COMM's commercial mortgage 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 2000-C1, as follows: --$4.5 million class N to 'C/DR6' from 'CC/DR3'. Fitch also upgrades the following classes: --$38.2 million class B to 'AAA' from 'AA'; --$39.3 million class C to 'AAA' from 'A'; --$13.5 million class D to 'AA+' from 'A-'; --$25.8 million class E to 'A' from 'BBB'; --$11.2 million class F to 'BBB+' from 'BBB-'; --$26.9 million class G to 'BB+' from 'BB'; --$6.7 million class H to 'BB' from 'BB-'. In addition, Fitch affirms the following classes and DR ratings: --$41.7 million class A-1 at 'AAA'; --$542.9 million class A-2 at 'AAA'; --Interest-only class X at 'AAA'; --$6.7 million class J at 'B+'; --$10.1 million class K at 'B'; --$7.9 million class L at 'B-'; --$6.7 million class M remains at 'CCC/DR1'. Fitch does not rate the $0.7 million class O certificates. The rating downgrade is the result of increased loss expectations on the specially serviced assets. Fitch projected losses on the specially serviced assets are expected to fully deplete de·plete v. 1. To use up something, such as a nutrient. 2. To empty something out, as the body of electrolytes. class O and significantly impair class N. The rating upgrades reflect increased 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 due to scheduled amortization and additional defeasance (3.4%) since Fitch's last rating action. As of the May 2006 distribution date, the pool's collateral balance has paid down 15.3% to $782.2 million from $897.9 million at issuance. To date, 13 loans (4.7%) have fully defeased. Fitch remains concerned about the high percentage of Fitch Loans of Concern (17.8%) in the pool. These include the specially serviced loans and loans with low 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 ) and occupancies. Aside from the largest Loan of Concern, which is currently in special servicing, the second largest Loan of Concern (2.6%) is secured by three office buildings in various cities in Maryland and Virginia. The three properties have reported drops in occupancies, driving a decline in property performance. Consolidated occupancy as of September 2005 was 60.7%. Fitch will continue to monitor the performance of the collateral. Currently, there are six loans (10.6%) in special servicing. The largest loan (7.0%) in special servicing consists of an eight-property apartment portfolio, six of which are located in Michigan, one in Illinois and one in Ohio. The loan is in foreclosure. The loan is split into an A-note portion, which is included in the trust, and a B-note, with a current balance of $14.68 million, which is held outside the trust. The loan transferred to special servicing in March 2005 as a result of insufficient property cash flow. Six of the eight properties have been foreclosed on, with two properties having been sold or are in the process of being sold to buyers at no loss to the trust. Title issues continue to protract pro·tract v. To extend or protrude a body part. the transfer of ownership of an MI property while the foreclosure sale foreclosure sale n. the actual forced sale of real property at a public auction (often on the court house steps following public notice posted at the court house and published in a local newspaper) after foreclosure on that property as security under a mortgage or of the OH property is scheduled to occur in the second quarter 2006. The second largest loan in special servicing is a retail property (1.1%) in Cincinnati, OH and is 90+ days delinquent. Attempts to release vacant space failed, leading to a consensual receivership. The special servicer will take title to the property after the completion of a mylar survey. Based on the most recent appraised value An appraised value (USA) or mortgage valuation (Australia) pertains to the assessed value of real property in the opinion of a qualified appraiser or valuer. It is usually used as a pre-qualification & risk-based pricing factor related to the issuance of mortgage loans by a , Fitch projects losses upon disposition. Fitch reviewed the credit assessments of the Crowne Plaza This article or section needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. hotel (10.6%) and the Crystal Park One (5%) loans. The Fitch stressed DSCR is calculated using servicer provided 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. less required reserves Required reserves The dollar amounts, based on reserve ratios, that banks are required to keep on deposit at a Federal Reserve Bank. required reserves divided by debt service payments based on the current balance using a Fitch stressed refinance constant. The Crowne Plaza is secured by a 46-story, 770-room hotel located in the Times Square submarket of Manhattan, NY. This loan has been split into an A-note, which is held inside the trust, and a B-note, with a current balance of $27 million, which is held outside the trust. Property performance has demonstrated an upwards trend since 2002, although net operating income continues to lag underwriting levels. Occupancy in 2005 suffered due to lower-than-anticipated room reservations during the December holidays, poor weather and the mass transit strike in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. . The borrower plans on implementing pricing strategies in 2006 to increase hotel revenues. The A-note corresponding DSCR as of year-end (YE) 2005 was 1.48 times (x) compared with 1.05x at YE 2004 and 1.73x at issuance. YE 2005 occupancy was 89%, decreasing slightly from 90% at YE 2004. Fitch maintains a below investment grade credit rating on this loan. The Crystal Park One loan is secured by a 416,524 square foot (SF), 11-story office building located in the Crystal City section of Arlington, VA. This loan also has an A and B-note structure, where the B-note, with a current balance of $12.8 million, is held outside the trust. Occupancy will decline to 80% at the end of May 2006, primarily due to the U.S. Patent and Trademark Office vacating space in the building. However, leasing activity appears strong as indicated by the borrower re-leasing 33% of the vacant space since YE 2005. Fitch will continue to monitor the performance of the collateral. Fitch maintains an investment-grade credit rating on this loan. The A-note corresponding DSCR as of the YE 2005 was 1.61x, compared with 1.57x at YE 2004 and 1.95x at issuance. (1) Fitch's Distressed Recovery (DR) ratings, introduced in April 2006 across all sectors of structured finance, are designed to estimate recoveries on a forward-looking basis while taking into account the time value of money. For more information on Distressed Recovery ratings, see the full report ('Structured Finance Distressed Recovery Ratings'), which is available on the Fitch Ratings web site at www.fitchratings.com. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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