Fitch Ratings Upgrades J.P. Morgan 1999-C7 Class B.Business Editors NEW YORK--(BUSINESS WIRE)--July 2, 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 J.P. Morgan Commercial Mortgage Finance Corp.'s 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 1999-C7, $40.1 million class B certificates to 'AA+' from 'AA'. In addition, the following classes are affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. by Fitch: $121.8 million class A-1, $357 million class A-2 and interest-only class X at 'AAA'; $40.1 million class C at 'A+'; $52.1 million class D at 'BBB'; $12 million class E at 'BBB-'; $38.1 million class F at 'BB'; $26 million class G at 'B'; and $4 million class H at 'B-'. The $24 million class NR certificates are not rated by Fitch. The rating actions follow Fitch's review of the transaction, which closed in April 1999. The upgrade is primarily the result of increased subordination levels due to loan payoffs and amortization. As of the June 2003 distribution date, the pool's aggregate principal balance has been reduced by 10.3% to $715.1 million from $801.4 million at issuance. The certificates are collateralized by 142 fixed-rate mortgage loans, consisting primarily of multifamily (33%), office (28%) and retail (23%) properties, with significant concentrations in California (17%), Maryland (15%) and Florida (11%). No loans are delinquent or specially serviced, and there have been no realized losses Realized Loss A loss recognized when assets are sold for a price lower than the original purchase price. Notes: A portion of the realized loss may be applied against a capital gain or realized profit to reduce taxes. . Midland Loan Services, Inc. (Midland) provided year-end (YE) 2002 financials for 96% of the pool. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the information provided, the pool's 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 (WADSCR WADSCR Weighted Average Debt Service Coverage Ratio ) increased to 1.62 times (x) from 1.56x at issuance (for the same loans). Eleven loans (10%) are secured by hotels. The YE 2002 WADSCR for the hotels remains rather strong, at 1.76x, although it was down from 1.84x at issuance. Also, two loans (0.8%) reported YE 2002 DSCR DSCR See: Debt-service coverage ratio below 1.00x. Thirty-five loans (24%) are currently on Midland's watchlist, primarily due to the decline in occupancy and/or DSCR. The largest of these loans (2.5%) is secured by an office property in the Baltimore central business district. The property's performance declined after one of the major tenants had vacated. However, recently, a new 10-year lease has been signed which will increase occupancy to 85%. Fitch identified several loans of concern and applied various stress scenarios. Even under these stress scenarios, subordination levels remain sufficient to upgrade class B and affirm the remaining classes. Fitch will continue to monitor this transaction, as surveillance is ongoing. |
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