Fitch Upgr KPAC Series 1994-C3 $138.2MM Comm Mtge P-T Ctfs.Business Editors NEW YORK--(BUSINESS WIRE)--Dec. 13, 2000 Kidder Peabody Acceptance Corporation I's commercial mortgage pass-through certificates, series 1994-C3, $39.3 million class C is upgraded to `AA-' from `A+'. In addition, Fitch affirms the $63.8 million class A-2, and interest only class A-2X certificates at `AAA', and the $35.1 million class B at `AA+'. Since last year's review, the ratings on classes A-1 and A-1X have been withdrawn because the certificates have been paid in full. The rating actions follow Fitch's annual review of the transaction, which closed in November 1994. The upgrades are primarily attributable to significant increases in subordination levels due to amortization, prepayments, and strong pool performance. As of the December 2000 distribution date, the outstanding collateral balance has been reduced to $138.2 million from $226.5 million at closing. Of the original 29 cross-collaterallized and cross- defaulted loans in the pool, 18 loans remain outstanding. The properties are currently located in 11 different states, with significant concentrations in Georgia (20%), Tennessee (20%), Illinois (15%) and Texas (14%). The pool's collateral consists of office (52%), multifamily (37%) and retail (9%) properties. There are currently no delinquent loans in the pool. 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 the trailing twelve months In commerce, the trailing twelve months (TTM) is a moving measurement (for example, an average or a sum) over the 12 previous months, using the most recent data available. Also sometimes known as last twelve months (LTM). (TTM TTM Trailing 12 months. Often used with Earnings Per Share. ) ending July 31, 2000, when compared to origination, has increased from 2.16 times (x) to 5.08x on class A-2, from 1.76x to 3.28x on class B, and from 1.45x to 2.35x on class C. The DSCR's utilize a Fitch-calculated net cash flow, based on servicer provided net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (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 ) adjusted for annual capital improvements, and a hypothetical refinance constant of 10.04%. The overall Fitch net cash flow has increased by 37% since underwriting and 7% since TTM ending June 30, 1999. One property of concern to Fitch is an office property located in Jacksonville, FL. This property, representing 4.6% of the pool, experienced a 43% decrease in NOI from origination, as a result of declining occupancy due to increased competition in the market. Using the Fitch net cash flow and a blended capitalization rate of 9.5%, the pool has a current overall loan to value (LTV LTV See: Loan-to-value ratio ) ratio of 40%. Fitch will continue to monitor this transaction, as surveillance is ongoing. |
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