Fitch Upgr Lehman Structured Securities Corp. Series 1996-1.Business Editors NEW YORK--(BUSINESS WIRE)--Sept. 25, 2001 Fitch fitch: see polecat. upgrades Lehman Structured Securities Corp., commercial mortgage pass- through certificates, series 1996-1 as follows: $24.4 million class E-1 from `BBB' to `AAA' and $29.9 million class E-2 from `BB' to `BB+'. The rating upgrades follow Fitch's annual review of the transaction, which closed in November 1996. The class E-1 and class E-2 certificates are backed by the $91.6 million class E of the Resolution Trust Corporation, series 1994-C1 (RTC See real time clock. ). The upgrades of the classes are in response to the significant amount of 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 , which is provided by the loans remaining in the RTC transaction. Based on the structure of the RTC transaction, excess interest from the loans is allocated to the certificates as principal payments. This has caused the allocated loan balance to exceed the total certificate balance by $67.7 million. The excess interest payments that are allocated to class E of the RTC transaction are allocated pro-rata to the class E-1 and E-2 of the Lehman 1996-1 transaction. Once the class E begins receiving scheduled principal payments, class E-1 will receive the payment priority until it is paid in full at which time class E-2 will begin to receive scheduled principal payments. Based on rating agency confirmation, the Federal Deposit Insurance Corp. (FDIC FDIC See: Federal Deposit Insurance Corporation FDIC See Federal Deposit Insurance Corporation (FDIC). ), successor to RTC, may continue to request reductions in the reserve fund on RTC multifamily and commercial transactions. The current reserve fund in the RTC transaction is $99 million. In order to upgrade classes E-1 and E-2, Fitch did not give any credit to the balance of the reserve fund. The RTC transaction is currently collateralized by 569 multifamily and commercial loans. By outstanding balance, the pool primarily consists of multifamily (66%), office (13%) and retail (9%) properties. The properties located in many states with primary concentrations in California (81%) and Maryland (8%). As of the August 2001 distribution date the delinquency delinquency Criminal behaviour carried out by a juvenile. Young males make up the bulk of the delinquent population (about 80% in the U.S.) in all countries in which the behaviour is reported. , foreclosure foreclosure Legal proceeding by which a borrower's rights to a mortgaged property may be extinguished if the borrower fails to live up to the obligations agreed to in the loan contract. and 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 statistics were 1.73% of the pool, which is very low and is considered a strength of the pool. Fitch will continue to monitor this transaction, as surveillance is ongoing. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion