News Column

Fitch Upgrades DLJ 1998-CG1

May 22, 2014

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has upgraded two and affirmed two classes of DLJ Commercial Mortgage Corp. (DLJ) commercial mortgage pass-through certificates series 1998-CG1. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrades are the result of increasing credit enhancement and stable performance of the pool since Fitch's last rating action.

As of the April 2014 remittance report, the transaction has paid down 95.7% to $66.8 million from $1.564 billion at issuance. Seventeen of the original 303 loans remain. There are no specially serviced loans, and three loans (30%), including the largest loan in the pool (24.3%), are fully defeased. The remaining non-defeased loans consist of 56.4% fully amortizing loans.

The largest two non-defeased loans are secured by two office buildings, BLN Office I & II (15.3% of the pool), that total 336,294 square foot (sf) in Bloomington, MN. The complex is located in the Bloomington office market across from the Mall of America. Both buildings are in good condition but have experienced performance volatility due to the largest tenant at the site, Wells Fargo, signing short-term lease renewals. The loans were previously in special servicing and modified in early 2013 to allow the sponsor time to negotiate lease extensions and find refinancing. The modification included a maturity date extension to July 2014. Per the servicer, the sponsor is in the process of securing a refinance of the loans.

The largest contributor to expected losses is a loan secured by an 82,542 sf retail center, The Park Shopping Center, located in Orange Park, FL (2.8%). The property's performance has been below expectations since 2002 due to a decline in income from high vacancies. The loan was previously in special servicing and was modified in February 2012 whereby a hard lock box was instituted to capture cashflow. The property's current occupancy is listed at 44%. The sponsor continues to actively market vacant space and is offering lease concessions to.

RATINGS SENSITIVITY

The ratings on classes B-4 through B-7 are expected to remain stable. Although credit enhancement is high, 43.6% of the remaining loans have maturity or ARD dates beyond 2015. Therefore, near-term paydown to classes B-6 and B-7 is limited.

Fitch upgrades the following classes:

--$27.4 million class B-6 to 'BBBsf' from 'BBB-sf', Outlook Stable;

--$15.6 million class B-7 to 'Bsf' from 'B-sf', Outlook Stable.

Fitch affirms the following classes:

--$0.5 million class B-4 at 'AAAsf', Outlook Stable;

--$15.6 million class B-5 at 'AAAsf', Outlook Stable.

The class A-1A, A-1B, A-1C, A-2, A-3, A-4, B-1, B-2 and B-3 certificates have paid in full. Fitch does not rate the class C certificates. Fitch previously withdrew the rating on the interest-only class S certificates.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 20, 2014);

--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 11, 2013).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748821

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724961

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=831368

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.



Fitch Ratings

Primary Analyst

Jay Bullie

Associate Director

+1-312-368-2079

Fitch Ratings, Inc.

70 W. Madison Street

Chicago, IL 60602

or

Committee Chairperson

Mary MacNeill

Managing Director

+1-212-908-0785

or

Media Relations

Sandro Scenga, +1-212-908-0278

sandro.scenga@fitchratings.com


Source: Fitch Ratings


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