Fitch Ratings Upgrades Five Classes Of GP Capital 2001-A.Business Editors CHICAGO--(BUSINESS WIRE)--March 11, 2003 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 GP Capital Funding Corp., commercial mortgage pass-through certificates, series 2001-A, $3.6 million class C to 'AAA' from 'AA', $10 million class D to 'AAA' from 'A-', $5.5 million class E to 'AA-' from 'BBB', $4.5 million class F to 'A-' from 'BB' and $4.5 million class G to 'BB' from 'B'. Fitch does not rate class H certificates. The upgrades follow Fitch's annual review of the transaction, which closed March 2001. The upgrades are attributed to an increase in 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 refinance and amortization of loans. As of the February 2003 distribution date, the transaction's collateral balance has decreased by 52%, to $50.3 million from $111.2 million at issuance. Of the original 60 loans, 29 have paid off since issuance. BNY BNY Bank of New York Asset Solutions, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , the master servicer, provided 83% of the pool's year-end (YE) 2001 and issuance financial statements. The weighted-average net operating income (NOI NOI Net Operating Income NOI Notice of Intent NOI Nation of Islam NOI Notice of Inquiry NOI Neuro Orthopaedic Institute NOI New Organizing Institute NOI Notice of Interest NOI No Offense Intended NOI National Olympiad in Informatics ) improved 15% from issuance to YE 2001. Fitch used the NOI as an indicator of performance given the floating-rate nature of the loans. All loans remaining extended their maturity terms subjecting the transaction to adverse selection. Unique, volatile property types collateralize collateralize To pledge an asset as security for a loan. A loan to a broker is collateralized by pledging securities. the loans in this transaction. Following the payoffs, the collateral consists of retail (36%), multifamily (21%), industrial (12%), and 36% that are non-traditional properties, including hotel, restaurant, and car dealership. There are geographic concentrations in New York (39%), California (16%), Florida (18%), and New Jersey (11%). Currently, eight loans (33%) are delinquent and specially serviced. When modeling the transaction, Fitch stressed the loans at higher probabilities of default and loss severities. In addition to the specially serviced loans, 18 loans (45%) are on the servicer's watchlist. The majority of the loans on the servicer's watchlist are due to upcoming maturities or a decline in DSCR DSCR See: Debt-service coverage ratio . Despite the increased number of loans of concern and concentration concerns for this pool, Fitch found the increase in subordination levels sufficient to upgrade the certificates. Fitch will continue to monitor this transaction, as surveillance is ongoing. |
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