NEW YORK, Feb. 11 /PRNewswire/ -- Standard & Poor's today affirmed its
ratings on nine classes of First Union Commercial Mortgage Trust's commercial
mortgage pass-through certificates series FUNB 1999-C1 (see list).
The affirmations reflect the stable operating performance of the
collateral pool. The pool has experienced slight increases in subordination
levels due to loan amortization.
As of January 2002, the pool collateral consisted of $1.11 billion of
principal balance, down from $1.16 billion, at issuance. The weighted average
fixed-rate coupon is 7.05%. Standard & Poor's calculated a debt service
coverage (DSC) of 1.51 times (x) (based on 97% year-end 2000, financial
information) from 1.47x at issuance. To date, only 28% of the borrowers have
reported interim 2001 financial statements. The DSC calculations exclude
credit lease loans, which represent 9.8% of the pool's balance. The
transaction includes 10 credit tenants whose current ratings are similar to
those at issuance. The major exception is Rite Aid (2.2% of principal
balance), which had its credit rating lowered from investment to noninvestment
grade. The top 10 mortgages represent 20.1% of the pool. DSC for these loans
improved to 1.46x for year-end 2000 from 1.32x at issuance.
The pool's collateral is located in 33 states, with concentrations in
Florida (12.6% of principal balance), California (10.1%), and Georgia (9.8%)
No other states have concentrations of greater than 10%. The property type
concentration includes multifamily (42.6% of principal balance), retail
(29.2%)lodging (11.8%), and office (10%).
Currently, there are five loans that are being specially serviced: three
lodging, one health care, and one-retail. Three of the loans are 90 days
delinquent with a total principal balance of $12.7 million. The other two are
30 days delinquent and current with principal balances of $7.2 and
$5.7 million, respectively. Based on discussions with the special servicer,
Lennar Partners Inc., Standard & Poor's expects losses on several of these
properties.
There are 54 mortgages totaling $106 million (9.5% of principal balance)
on the servicer's (First Union National Bank) watchlist. The average watchlist
loan balance is $1.96 million. Most of the mortgages appear on the watchlist,
either due to low or declining DSCs and occupancy levels. Standard & Poor's
has identified four loans with Kmart stores as partial or full collateral for
the loan (loans which have some Kmart exposure total approximately
$12 million). None of the loans are credit lease transactions. The servicer
mentioned that none of the stores have been identified as scheduled for
closing.
Based on Standard & Poor's loss analysis, which included the stressing of
specially serviced loans, watchlist loans, and the possibility of several
future Kmart store closings, the resultant stressed subordination levels
adequately support the affirmed ratings.
RATINGS AFFIRMED
First Union Commercial Mortgage Trust
Commercial mortgage pass-thru certs series FUNB 1999-C1
Class Rating Credit Support (%)
A-1 AAA 29.81
A-2 AAA 29.81
IO-1 AAA N/A
B AA 24.58
C A 19.09
D BBB 13.07
E BBB- 11.51
F BB 6.51
G B 3.26
*N/A-Not applicable.
SOURCE Standard & Poor's
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Related links:
http://www.standardandpoors.com/ratings
CONTACT:
Larry Kay, +1-212-438-2504, or Pramit Sheth,
+1-212-438-1470, both of Standard & Poor's
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