Fitch Ratings Affirms LB Commercial Mortgage Trust Series 1998-C1.Business Editors CHICAGO--(BUSINESS WIRE)--Oct. 25, 2002 LB Commercial Mortgage Trust'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 1998-C1 are affirmed by 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. as follows: $125.2 million class A-1, $308 million class A-2, $642.3 million class A-3 and interest-only class IO at 'AAA'; $86.4 million class B at 'AA'; $86.4 million class C at 'A'; $90.7 million class D at 'BBB'; and $34.6 million class E at 'BBB-'. Fitch also affirms $51.8 million class F at 'BB+'; $34.6 million class G at 'BB'; $17.3 million class H at 'BB-'; $43.2 million class J at 'B'; $17.3 million class K at 'B-'; and $17.3 million class L at 'CCC'. The rating affirmations follow Fitch's annual review of the transaction which closed in March 1998. The rating affirmations are the result of the overall steady performance of the mortgage pool since issuance. GMAC GMAC General Motors Acceptance Corporation GMAC Graduate Management Admission Council GMAC Give Me A Call GMAC Genetic Manipulation Advisory Committee GMAC Genetic Modification Advisory Committee (Singapore) GMAC Give Me A Chance Commercial Mortgage Corp. (GMACCM), as master servicer, collected 96.9% of year-end (YE) 2001 operating statements by outstanding loan balance. The weighted average 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 ) for those loans remained flat at 1.49 times (x) at YE 2001, compared to 1.49x at YE 2000 and 1.35x at issuance. Approximately 9.2% of the transaction had DSCRs less than 1.00x compared to 4.3% at YE 2000. As of the October 2002 distribution date, the collateral balance has been reduced by 8.3%, to $1.59 billion from $1.73 billion at issuance. Fifteen loans have paid off, bringing the number of loans to 243 from 259 at issuance. The deal is geographically diversified, with properties located in 30 states with major concentrations in Florida (9.9%), 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 (9.7%), California (8.1%), Texas (7.9%) and Pennsylvania (6.1%). The geographic diversification is seen as a strength, however, Fitch is concerned that 46.5% of the transaction is collateralized by retail loans and 6.5% is collateralized by hotel loans. The five largest loans comprise only 10.9% of the transaction's loan balance. The weighted average DSCR for these loans increased to 1.41x at YE 2001 from 1.36x at YE 2000 and 1.32x at issuance. The loan size diversification of the transaction is seen as another strength of the pool, however, one of the five largest loans is on the servicer's watchlist which is a concern. Fitch considers 15 loans, representing 7.2% of the pool, to be of concern. There are four loans, representing 2.2% of the pool, in special servicing. The largest of these loans is collateralized by a full service hotel (1.2% of the pool) located in Kissimmee, Florida Kissimmee redirects here. For other uses, see Kissimmee (disambiguation). Kissimmee is a city in Osceola County, Florida, United States. As of 2006, the population recorded by the U.S. Census Bureau is 60,894. It is the county seat of Osceola County. , approximately one mile from the Disney World main gate. The loan transferred to special servicing due to debt service payment default, and GMACCM has filed for foreclosure. The decline in performance is due to an overdeveloped market and a drop in the tourism industry. The second largest specially serviced loan is secured by an office property (0.7% of the pool) located in Skokie, Illinois. The loan transferred to the special servicer because of payment default. The property is 43% occupied due to several tenants vacating when their leases expired. The property is real estate owned Real Estate Owned Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most . There are two additional loans (0.28%) in special servicing. The first loan, representing 0.14% of the pool, is secured by a retail property located in Orlando, Florida The city of Orlando is a major city in central Florida and is the county seat of Orange County, Florida. According to the 2000 census, the city population was 185,951. A 2006 U.S. . The loan transferred to the special servicer because of poor management resulting in occupancy problems. A new manager is now in place and the GMACCM is considering a forbearance agreement. The loan is currently 90 days delinquent. The second loan, representing 0.14% of the pool is secured by an industrial property located in Riverside, New Jersey. The loan transferred to special servicing after the largest tenant vacated. The borrower transferred the property to GMACCM via a deed in lieu in lieu prep. instead. "In lieu taxes" are use taxes paid instead of sales tax. A "deed in lieu of foreclosure" occurs when a debtor just deeds the property securing the loan to the lender rather than go through the foreclosure process. . There is a prospective buyer and GMACC GMACC Governor's Military Affairs Coordinating Committee is in preliminary negotiations. The loans of concern were defaulted in various stress scenarios. The resulting subordination levels were sufficient to affirm the current ratings. Fitch will continue to monitor the high concentration of loans collateralized by retail and hotel properties and loans of concern as surveillance is ongoing. |
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