Fitch Ratings Upgrades Midland RAC's 1996-C1 Ctfs.Business Editors CHICAGO--(BUSINESS WIRE)--Sept. 23, 2002 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 Midland Realty Acceptance Corp.'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 1996-C1 as follows: $26 million class C to 'AA' from 'A+'; $14.8 million class D to 'A' from 'A-'; $5.6 million class E to 'BBB+' from 'BBB'; and $7.4 million class F to 'BBB' from 'BBB-'. In addition, Fitch affirms the following classes: $22.8 million class A-2; $91.8 million class A-3, interest-only class A-EC and $20.4 million class B at 'AAA'; $18.6 million class G at 'BB'; and $11.1 million class J at 'B'. The $5.6 million class H, $11.1 million principal-only class K-1 and interest-only class K-2 are not rated by Fitch. The rating upgrades and affirmations follow Fitch's annual review of the transaction, which closed in September 1996. The upgrades reflect the significant increase in subordination levels due to amortization and loan payoffs. As of the August 2002 distribution date, the transaction's aggregate principal balance has decreased approximately 37% to $235.3 million from $371.1 million at issuance. The certificates are collateralized by 97 fixed-rate mortgage loans, consisting primarily of multifamily (32% by balance), retail (33%), office (12%), and healthcare (8%) properties, with significant concentrations in California (11%), Texas (10%), Illinois (9%) and 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%). The master servicer, Midland Loan Services (Midland), collected operating statements for approximately 91% of the loans remaining in the pool. The year-end (YE) 2001 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 ) is 1.66 times (x) compared to 1.70x for YE 2000 and 1.44x at issuance. Twelve loans (8.9%) are currently in special servicing, including two that 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 two REO loans and one 90-day delinquent loan (4%) are health care properties. Fitch expects these loans to incur losses. Another specially serviced loan (0.9%) is a Ramada ra·ma·da n. Southwestern U.S. 1. a. An open or semienclosed shelter roofed with brush or branches, designed especially to provide shade. b. An open porch or breezeway. 2. Inn with declining performance. Midland, the special servicer, is gathering information to determine the appropriate workout for this loan. Eleven cross-collateralized and cross-defaulted Frank's Nursery & Craft Stores became delinquent when the borrower for these loans filed for bankruptcy protection on February 19, 2001. Four of the weaker properties have been sold, leaving seven (2.7%) loans in the transaction. Midland agreed to modify the terms of the seven loans. The modification includes reduced interest payments and an extension of the maturity dates, bringing past due advance interest current and putting the remaining expenses in a B note. Fitch does not expect losses associated with these loans, as they are current and performing. Fitch will continue to monitor the performance of this transaction. |
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