Fitch Upgr NationsLink Funding Corp., Ser 1998-1 $890.9MM P-T Ctfs.

Business Editors

NEW YORK--(BUSINESS WIRE)--Sept. 6, 2002

NationsLink Funding Corp.'s commercial mortgage pass-through certificates, series 1998-1, have been upgraded as follows: $53.6 million class B certificates to 'AA+ ' from 'AA', $56.1 million class C certificates to 'A+' from 'A', and the $48.5 million class D certificates to 'BBB+ ' from 'BBB'. In addition, Fitch Ratings affirmed the following classes: $71.9 million class A-1 certificates, $81.6 million class A-2 certificates, $433.8 million class A-3 certificates, $587.2 million interest-only class X-1 and $303.7 million interest-only class X-2 at 'AAA'; $51.0 million class F certificates at 'BB', $10.2 million class G certificates at 'BB-', $25.5 million class H certificates at 'B', and the $12.2 million class J certificates at 'B-'. Fitch does not rate classes E and K. The rating affirmations follow Fitch's annual review of the transaction, which closed in March 1998.

Fitch upgraded the transaction due to improved credit enhancement levels, which have been the result of loan amortization and payoffs. The certificates are currently collateralized by 187 fixed-rate mortgage loans secured by first lien mortgages or deeds of trust on 187 multifamily and commercial properties. Significant property type concentrations include multifamily (47%), and retail (31%). The properties are located in 30 states, with the largest concentrations in Florida (21%), California (14%), and North Carolina (11%).

As of the August distribution date, the pool's aggregate certificate balance was reduced by 12.7% to $890.9 million from $1.02 billion at issuance. Midland Loan Services, the master servicer, collected year-end 2001 property financial statements for 91% of the pool. Based on the properties that reported full year 2001 performance, the pool's weighted average debt service coverage ratio (DSCR) has improved to 1.71x from 1.40x at issuance. Five loans (6% of the pool) had a DSCR below 1.00x, two of the five are current. To date, realized losses have totaled $2.7 million.

Five loans, 4% of the pool, are currently in special servicing. Karen Gardens Apartments, a multifamily property located in Elmhurst, NY, representing 0.2% of the pool, is current and performing under a modified note. The loan is being monitored for return to the master servicer within the next 90 days. The Days Suites Kissimmee Lodge, a hotel located in Kissimmee, FL, representing 3% of the pool, has been brought current under a forbearance agreement and is pending return to the master servicer. St. Joseph's Holiday Inn and Conference Center, a hotel located in St. Joseph, MO, representing 0.5% of the pool, is REO and the special servicer is in the process of finalizing the transfer of the Holiday Inn Franchise to the trust. Ogden Medical Center, an office property located in Ogden, UT, representing 0.3% of the pool, was 90+ days delinquent, however the borrower has brought principal and interests payments current and is also in the process of bringing escrows and default interest current. Rialto Shopping Center, a retail property located in Venice, FL, representing 0.3% of the pool, is 60 days delinquent. The property has suffered from large tenant vacancies such as Food Lion, which occupied 40% of NRA, and Eckerds, which occupied 16% of NRA. The borrower is currently marketing the space. Three loans, 1% of the pool, were on the master servicer's watchlist.

Fitch Ratings' analysis took into account the specially serviced loans and other underperforming loans. Based on this analysis, Fitch Ratings concluded subordination levels were sufficient to warrant the upgrades. Fitch Ratings will continue to monitor this transaction, as surveillance is ongoing.