News Column

Fitch Affirms GFCM 2003-1

June 26, 2014

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has affirmed 10 classes of General Electric Capital Assurance Company (GFCM) commercial mortgage pass-through certificates series 2003-1. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The affirmations are the result of stable performance since Fitch's last rating action. Fitch modeled losses of 3% of the remaining pool; expected losses on the original pool balance total 1.2%, including $3 million (0.4% of the original pool balance) in realized losses to date. Fitch has designated 25 loans (23.8%) as Fitch Loans of Concern; 83 of the original 171 loans remain. There are no loans in special servicing and none are defeased.

As of the June 2013 distribution date, the pool's aggregate principal balance has been reduced by 73.6% to $216.9 million from $822.6 million at issuance. Interest shortfalls are currently affecting classes H through J.

The largest loan in the pool is Gateway Center I, which is cross-collateralized with Gateway Center II, currently the seventh largest in the pool. Gateway Center I is secured by a 259,759 square foot (sf) anchored retail center in Patchogue, NY (7.45% of the pool). This property faces some potential near-term rollover as the lease for its second largest tenant, Best Buy, was scheduled to expire in early 2014. Fitch inquired with the servicer as to terms of an extension or renewal and is awaiting a response. The tenant remains in occupancy.

Gateway Center II is an adjacent retail project secured by a 79,760 sf property also in Patchogue, NY. This property also faces significant vacancy and near term rollover issues, as its largest tenant, grocery store King Kullen, which occupied over half of the property, vacated at lease expiration in early 2014. The servicer reports the Borrower has requested a lease review for a potential replacement tenant. The status of re-leasing or terms of the lease could not be verified. Gateway Center II represents the largest Fitch Loan of Concern in the remaining pool.

RATING SENSITIVITY

Rating Outlooks on classes A-4 through E remain Stable due to increasing credit enhancement and continued paydown.

The Rating Outlook on class F was revised to Stable from Negative due to the absence of loans in special servicing and the lack of imminent losses.

Fitch affirms the following classes as indicated:

--$37.2 million class A-4 at 'AAAsf', Outlook Stable;

--$112.7 million class A-5 at 'AAAsf', Outlook Stable;

--$11.3 million class B at 'AAAsf', Outlook Stable;

--$13.4 million class C at 'A+sf', Outlook Stable;

--$11.3 million class D at 'BBBsf', Outlook Stable;

--$10.3 million class E at 'BBB-sf', Outlook Stable;

--$12.3 million class F at 'B-sf', Outlook to Stable from Negative

--$7.2 million class G at 'Csf', RE 75%.

--$1.2 million class H at 'Dsf', RE 0%;

--$0 class J at 'Dsf', RE 0%.

The class A-1, A-2 and A-3 certificates have paid in full. Fitch previously withdrew the rating on the interest-only class X certificates.

Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 11, 2013 report, 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is available at 'www.fitchratings.com' under the following headers:

Structured Finance >> CMBS >> Criteria Reports

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=836783

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

Valerie Jayson

+1-312-368-3116

Fitch Ratings, Inc.

70 W. Madison St

Chicago, IL 60602

or

Committee Chairperson

Mary MacNeill

Managing Director

+1-212-908-0785

or

Media Relations

Sandro Scenga, New York, +1-212-908-0278

sandro.scenga@fitchratings.com

Source: Fitch Ratings


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