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Recent commercial mortgage industry ratings actions

March 27, 2001

By SAM GARCIA

Fitch affirmed Heller Financial Commercial Mortgage Asset Corp.'s mortgage pass-through certificates, series 2000 PH-1. These certificates are collateralized by 235 fixed-rate mortgage loans, consisting primarily of retail (38%), multifamily (24%), and office (18%) properties. Five loans (2.3% of the pool) have year-to-date or trailing-twelve-month 2000 debt service coverage ratios (DSCR) below 1.00x. The 2000 weighted average DSCR is 1.56 times (x), compared to the underwritten DSCR for the same loans of 1.43x. Three loans (1.3%) are delinquent, including two that are being specially serviced. One of these loans (0.1%), which is secured by two multifamily properties in Fayetteville, N.C., is currently in foreclosure.

Fitch rated as 'A' an offering of $300 million 6.95% senior unsecured notes due
March 2, 2011 by ERP Operating Limited Partnership, the principal operating subsidiary of Equity Residential Properties Trust (EQR). EQR is a $15 billion (total market capitalization) equity real estate investment trust (REIT) and the nation's largest owner/operator of multifamily apartment properties. Proceeds will be used to reduce bank borrowings and mortgage debt.

Fitch's ratings reflect positively on the company's strong asset and geographic diversification with more than 1,100 properties in 36 states as of Dec. 31, 2000, the stable cash flow and predictable capital expenditure requirements of this property type, EQR's modest exposure to development risk, solid balance sheet, and the company's consistent operating strategy. Fitch's primary ratings concern is EQR's position as a consolidator in the multifamily industry, and corresponding potential for debt-financed acquisitions to erode financial protection measures. Fitch's ratings affirmation also incorporates EQR's strong financial flexibility and large pool of unencumbered properties.

Fitch considers multifamily properties as one of the most recession-resistant commercial property types, resulting in a durable income stream.

S&P raised its ratings on four classes of Structured Asset Securities Corp.'s multiclass pass-through certificates series 1996-CFL and affirmed ratings on another class of the same series. The raised ratings reflect (since September 2000 review) a well-seasoned mortgage pool, a further increase in credit support levels, strong performance, and stable credit characteristics. The pool consists of 156 loans secured by 160 properties, down from 176 loans ($634.56 million) at the July 2000 balances review, and 564 loans at issuance. The weighted average coupon of the mortgage loan pool is 9.3%. Office properties represented 30.7% and retail properties represented 29.6% of the outstanding pool balance. Utilizing a combination of interim and year-end financial information, S&P calculated an increase in the DSCR to 1.47x from 1.38x since the last review.

S&P assigned preliminary ratings to J.P. Morgan Chase Commercial Mortgage Securities Corp.'s $1.018 billion commercial pass-through certificates series
2001-CIBC1. S&P determined that, on a weighted average basis, the pool has a DSCR of 1.32 times, a beginning LTV of 86.5% and and ending LTV of seventy-six percent.

S&P raised ratings on series BTR1999-S1 BTR-2 Trust's commercial mortgage pass-through certificates and affirmed series BTR1999S1. The ratings actions reflect the significant paydown in the $223.5 million pool's collateral, which totalled $447 million at issuance. The weighted average coupon is 8.80%, and the weighted average DSCR totaled 1.71 times. More than forty-four percent of the properties are located in Florida, and the pool has experienced no delinquencies or losses since inception.

S&P assigned preliminary ratings to PNC Mortgage Acceptance Corp.'s $889.3 million commercial mortgage pass-through certificates series 2001-C1. The 'AAA' rating on on the bulk of the certificates reflect the credit support provided by the subordinate classes of certificates, the liquidity provided by the servicer and trustee, the economics of the underlying mortgage loans, and the geographic and property type diversity of the loans. $730 million in conduit loans have a weighted average DSCR of 1.26 times, a beginning LTV of 92.9 percent and an ending LTV of 80.3%.

Various classes of Salomon Brothers Mortgage Securities VII, Inc.'s commercial mortgage pass-through certificates, series 2000-NL1, were affirmed by Fitch. The certificates are collateralized by 67 fixed-rate mortgage loans, consisting primarily of office (33%), multifamily (23%), mixed use (15%), and retail (13%) properties. According to the information provided, the 2000 weighted average DSCR is 1.71 times, compared to the underwritten DSCR for the same loans of 1.40x.

Two classes of J.P. Morgan Commercial Mortgage Finance Corp.'s mortgage pass-through certificates series 1995-C1 were raised by Fitch while nine classes were affirmed. The raised ratings reflect improved credit support since the last review. The pool consists of 18 mortgage loans with a weighted average coupon of 9.28% and a weighted average DSCR of 1.45 times based on 2000 trailing 12-month net operating income.

S&P assigned preliminary ratings to GMAC Commercial Mortgage Securities Inc.'s $864.1 million mortgage pass-through certificates series 2001-C1. The ratings reflect the credit support provided by the subordinate classes of certificates, the liquidity provided by the trustee, the economics of the underlying loans, and the geographic and property type diversity of the loans. Standard & Poor's analysis determined that, on a weighted average basis, the pool has a DSCR of 1.29 times, a beginning loan-to-value ratio (LTV) of 91.1%, and an ending LTV of 80.4%.

Fitch placed Credit Suisse First Boston Mortgage Securities Corp., series 1995-WF1 $31.3 million class C, currently rated `AA', on Rating Watch Positive. Other classes were affirmed. The Rating Watch is due to an increase in subordination caused by the prepayment of loans representing approximately 4% of the pool since Fitch's last review. The transaction consists of 39 commercial and multifamily mortgage loans. The property type concentration is 60% retail, 17% industrial, 12% office and 10% multifamily. The DSCR -- after releasing three loans from the pool -- has remained stable at a 1.69 times (x).

MortgageDaily.com
Readers can find details about recent ratings actions directly at:
FitchIBCA.com
Standard&Poor's.com

Sam Garcia has been in mortgage lending since 1980, and is managing editor of MortgageDaily.com. He also owns and operates CloseNow.com, a real estate portal site.

email: [email protected]

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