NEW YORK, Feb. 4 /PRNewswire/ -- Standard & Poor's today lowered its
rating on the class A-3 certificates of Conseco Commercial Mortgage Trust I's
senior commercial mortgage pass-through certificates series 1989-1 to
triple-'B'-minus from double-'A', and removed the rating from CreditWatch with
negative implications, where it was placed on Jan. 18, 2002.
The lowered rating is primarily due to the recent downgrades of Kmart
Corp. (Standard & Poor's 'D' rating), which filed a petition for
reorganization under Chapter 11 of the U.S. Bankruptcy Code on Jan. 22, 2002.
As of the Jan. 15, 2001 distribution date, the class A-3 certificates
totaled $50.8 million. The class A-3 certificates benefits from
overcollateralization and a $1.5 million reserve account that provides
approximate credit support of 31.8%. The collateral consists of a pool of
36 mortgage loans with an aggregate unpaid principal balance of $70.4 million
with a weighted average coupon of 10.1%. Fully amortizing loans account for
82% of the pool by balance.
Substantially all of the mortgaged properties are leased under credit
leases to one or more principal tenants. The ratings on the class A-3
certificates are dependent, in large part, on the tenant's credit quality.
Significant tenant exposure, expressed as a percentage of aggregate principal
balance, includes Kmart Corp. ('D') at 23%; Stop & Shop (Ahold Koninklijke
N.V.) (triple-'B'-plus) at 12%; Wal-Mart Stores Inc. (double-'A') at 9%;
Winn-Dixie Stores Inc. (triple-'B'-minus) at 8%; and Food Lion Inc. (Delhaize
America Inc.) (triple-'B'-minus) at 5%. Two Kmart Corp. stores numbers
provided by the servicer, Conseco Mortgage Capital Inc., with an aggregate
balance of $3.8 million, appeared in Kmart Corp.'s bankruptcy filing on a list
of immediate lease rejections.
Property inspections were supplied for the majority of the loans in the
pool. The inspection reports, overall, did not note any severe deferred
maintenance. However, significant vacancies were noted at six properties,
comprising 11% of the pool. One of the loans with significant vacancy, with a
balance of $982,520, is currently 90-plus days delinquent. It is the only
delinquent loan as of the Jan. 15, 2002 distribution date.
Standard & Poor's will continue to monitor the transaction closely.
SOURCE Standard & Poor's
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CONTACT:
Eric Thompson, New York, +1-212-438-2620, or
Roy Chun, New York, +1-212-438-2430, both for Standard & Poor's
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