Fitch Downgrades 2 Classes of Nomura Asset Securities Corp. 1998-D6; Assigns Outlooks.

NEW YORK -- Fitch Ratings downgrades and assigns Distressed Recovery (DR) ratings to Nomura Asset Securities Corp.'s commercial mortgage pass-through certificates, series 1998-D6, as follows:

--$18.6 million class B-5 to 'CCC/DR1' from 'B';

--$27.9 million class B-6 to 'C/DR5' from 'B-'.

In addition, Fitch affirms and assigns Rating Outlooks to the following classes:

--$65.8 million class A-1B at 'AAA'; Outlook Stable;

--$382.7 million class A-1C at 'AAA'; Outlook Stable;

--Interest-only class PS-1 at 'AAA'; Outlook Stable;

--$223.4 million class A-2 at 'AAA'; Outlook Stable;

--$204.7 million class A-3 at 'AAA'; Outlook Stable;

--$167.5 million class A-4 at 'AAA'; Outlook Stable;

--$55.8 million class A-5 at 'AAA'; Outlook Stable;

--$37.2 million class B-2 at 'AA+'; Outlook Stable;

--$37.2 million class B-3 at 'BBB+'; Outlook Negative.

Class A-1A has been paid in full. Fitch does not rate the interest-only class A-CS1, which has been paid in full; the $158.2 million class B-1; the $65.1 million class B-4; the $11.2 million class B-7; or the $241 B-7H certificates.

The downgrades of classes B-5 and B-6 are due to projected losses on the 13 specially serviced loans (3.8%) as well as a higher probability of default corresponding to the other Fitch Loans of Concern (11.2%). The affirmations are the result of sufficient credit enhancement to the investment grade classes. The Rating Outlooks reflect the likely direction of any changes to the ratings over the next one to two years.

Thirteen assets (3.8%) are currently in special servicing, 11 of which (2%) transferred subsequent to the last Fitch rating action. The largest specially serviced asset (1.4%) is secured by two contiguous shopping centers located in Utica, MI, which comprise a total of 318,390 square feet (sf). The loan was transferred in December 2007 for imminent default when its largest tenant's lease expired. At that time, occupancy for the two properties was 66%. A new tenant has since leased 49,248 sf, increasing occupancy to 81% as of Jan. 16, 2009. The borrower has decided to market the property for sale and has asked for a waiver of the prepayment premium; however, the special servicer is not expected to come to a decision until after offers have been received and evaluated. Fitch expects that losses are possible.

The second largest specially serviced asset (0.4%) is secured by a 82,868 sf retail shopping center located in Sterling Heights, MI. The loan was transferred in January 2008 for imminent default because the largest tenant's lease (50.8%) expired. As of September 2008, occupancy stood at 24%. The special servicer is expecting to receive purchase offers on the property, and will evaluate a sale upon their receipt. Fitch expects losses on the asset.

The third largest specially serviced asset (0.3%) transferred Dec. 24, 2008. The loan is secured by a 32,722 sf single-tenant retail property located in Columbus, OH which is 100% leased to Circuit City. At the time of transfer, the property was not listed on Circuit City's store closure list. However, the retailer has announced since that time that it expects to liquidate and close all of its stores. The special servicer has indicated that foreclosure on the loan is expected. Fitch expects losses on the asset.

Of the 10 additional specially serviced assets (1.7%), three (0.6%) are single-tenant properties 100% leased to Circuit City and four (0.7%) are fully occupied by Value City or an affiliate. Both retailers have entered into Chapter 11 bankruptcy and have indicated that they will liquidate their remaining stores. In addition to the specially serviced assets, four Fitch Loans of Concern (1.2%) count either Circuit City or Value City as the primary tenant. Fitch assigned a higher probability of default to these loans. In total, 32 loans (15%) are Fitch loans of concern, including the specially serviced assets (3.8%).

At issuance, the transaction included six shadow rated loans that comprised 10.1% of the pool. Four have repaid in full: Fox Plaza, Bristol/French Quarter, Westminister Center, and Morris Corporate Center. The two remaining shadow rated loans (3.1%) have fully defeased; these include the InnKeepers Suites Portfolio (2.2%), and the Westin Casuarina loan (0.9%).

As of the January 2009 distribution date, the pool's certificate balance has decreased 60.9%, to $1.46 billion, from $3.72 billion at issuance. Thirty-five loans (38.7%) have fully defeased since issuance, including four of the 10 largest loans in the pool (19.2%). In addition, one loan (2.6%) has partially defeased. Four loans (7.9%) are anticipated to repay in 2009 or 2010; of these, three (3.5%) have defeased.

Fitch's rating definitions and the terms of use 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 are also available from the 'Code of Conduct' section of this site.