Fitch Ratings Upgrades Classes C & D of FULB, Series 1997-C2.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. upgrades First Union-Lehman Brothers Commercial Mortgage Trust II, commercial mortgage pass-through certificates, series 1997-C2, as follows: -- $110.2 million class C to 'AAA' from 'AA'; -- $121.2 million class D to 'A-' from 'BBB+'. Fitch also affirms the following classes: -- $955.3 million class A-3 'AAA'; -- Interest-only class IO 'AAA'; -- $110.2 million class B to 'AAA' from 'AA'; -- $33.1 million class E to 'BBB' from 'BBB-'. The remaining classes, F, G, H, J, K, L, and M, are not rated by Fitch. The upgrade to classes C and D reflects increases in subordination levels due to amortization and loan payoffs. As of the June 2004 distribution date, the transaction's aggregate principal balance has decreased 29%, to $1.6 billion from $2.2 billion at issuance. Wachovia Securities, the master servicer, collected year-end (YE) 2003 operating statements for 61% of the loans remaining in the pool, excluding the 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. loans (11%). The pool's YE 2003 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 ) was 1.53 times (x), compared with 1.26x at issuance. As of the June 2004 distribution date, fourteen loans (7.2%) were specially serviced, including eleven delinquent loans (4.6%), three of which (1.6%) are 30 days delinquent, four (0.74%) are 90 days delinquent, two (0.46%) are in foreclosure and two (1.8%) are 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 (REO reo Noun NZ a language [Maori] ). The largest specially serviced assets (2.3%) are a group of cross-collateralized and cross-defaulted loans secured by three health care properties in Largo, FL. The loans have been in special servicing since May 2003 due to imminent default. The loans are current; however, the properties have experienced cash flow problems due to lower occupancy and increased expenses. The special servicer is evaluating workout options. The largest REO loan (1.05%) is secured by a hotel property in Maitland, FL. The property is listed for sale and losses are expected. The second REO loan (0.8%) is secured by a retail property located in Brandon, FL. The property is 66% leased and the special servicer is working on leasing the vacant space before marketing the property. Realized losses to date total $22.1 million, or 1.0% of the original pool balance. |
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