NEW YORK, Feb. 4 /PRNewswire/ -- Standard & Poor's today raised its
ratings on classes B, C, and D of LB Commercial Conduit Mortgage Trust's
multiclass pass-through certificates series 1995-C2. At the same time, ratings
are affirmed on the remaining A, E, and F classes in the pool (see list).
The raised ratings reflect the improved financial operating performance
of the collateral pool, and the increase in the subordination levels following
the pay-off of 34.7% of the pool. The upgrade is tempered by the high
percentage of mortgages in the lodging sector.
As of January 2002, the pool collateral consisted of 52 mortgages with a
principal balance of $169.6 million, down from 77 mortgages with a principal
balance of $259.8 million at issuance. The weighted average fixed coupon is
10.1%. GMAC Commercial Mortgage Corp. (GMAC), the master servicer reported
weighted average debt service coverage (WADSCR) of 1.60 times (x) (based on
87% year-end 2000, and 13% year-end 1999 financial information) from 1.43x, at
issuance. Seventy-five percent of the borrowers in the pool have reported
interim 2001 financials, resulting in a WADSCR of 1.50x. The lower 2001 WADSCR
is due in part to the seasonality of the collateral. Standard & Poor's expects
that over the next year or so, the currently weak economic conditions may
cause the DSC to decline somewhat. However, any such declines have already
been factored in the rating actions. The top 10 mortgages represent 50.1% of
the pool, an increase from 35.2%, at issuance, and debt service coverages
(DSC) have declined to 1.32x from 1.39x. Property inspection reports for the
top 10 mortgages revealed rankings of at least satisfactory.
The geographic concentration and property type concentration for the pool
has changed little, since issuance. Geographically diverse, the pool's
collateral is located in 16 states, with concentrations in Texas (20.4% of
total principal balance), New Jersey (16.6%), Florida (12.8%), Minnesota
(9.7%), and Virginia (9.2%). The property type concentration includes lodging
(28.9%), multifamily (27.9%), self-storage (19.9%), industrial (13.3%), and
retail (4.4%). The lodging sector is generally experiencing a decline in
occupancy levels because of the slowing economy. However, none of the lodging
sector mortgages is currently delinquent. Currently, there are no realized
losses to date.
There is only one delinquency based on the January 2002 distribution
date. The delinquent loan is a $2.8 million mortgage (or 1.66% of the pool
balance) secured by a multifamily property located in Amarillo, Texas. The
property is classified as 90-days delinquent. The mortgage came due on Sept.
1, 2001, and the borrower did not have a commitment to pay-off the mortgage.
The borrower is currently in the process of refinancing the loan. In the
interim, CRIIMI MAE Services L.P. (CRIIMI MAE), the special servicer is
considering a six-month extension as a bridge loan, until the permanent
financing is secured.
As of January 2002, the two hotels under the Holiday Inn flag located in
Fort Worth, Texas were forwarded to CRIIMI MAE. The two mortgages total
$8.8 million and $6.7 million, respectively, and have gone to the special
servicer because the borrower would like some relief, in response to the low
occupancy levels. Both mortgages are current.
There are 11 mortgages totaling $70.8 million on GMAC's watchlist. Most
of the mortgages appear on the watchlist, either due to low DSCs or past due
mortgages, four of which are reported to have commitments in place, and should
be paid-off shortly. Of particular concern are five mortgages, which total
$21.9 million and were defaulted in Standard & Poor's loss analysis. Three are
hotels located in the south that are suffering from high vacancy levels. Two
of the hotels are showing improving levels. The remaining two mortgages are
self-storage facilities with low occupancies and rental collection problems.
Based on Standard & Poor's loss analysis, the stressed subordination
levels adequately support the raised and affirmed ratings.
RATINGS RAISED
LB Commercial Conduit Mortgage Trust
Commercial mortgage pass-thru certs series 1995-C2
Class Rating Credit Support%
To From
B AAA AA 42.76%
C AA A 32.83%
D A BBB 25.19%
RATINGS AFFIRMED
LB Commercial Conduit Mortgage Trust
Commercial mortgage pass-thru certs series 1995-C2
Class Rating Credit Support%
A AAA 51.93%
E BB 10.67%
F B 5.33%
SOURCE Standard & Poor's
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Related links:
http://www.standardandpoors.com/ratings
CONTACT:
Caryn J. Bailey, +1--212-438-2392 or Amy Yan,
+1-212-438-2639, both of S&P
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