Fitch Affirms DLJ 1998-CG1

Fri Jun 7, 2013 6:24pm EDT

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Fitch Affirms DLJ 1998-CG1

Fitch Ratings has affirmed four classes of DLJ Commercial Mortgage Corp. (DLJ) commercial mortgage pass-through certificates series 1998-CG1 due to stable pool performance. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The affirmations are due to stable performance of the pool and sufficient credit enhancement to support ratings on the remaining classes. Fitch modeled losses of 4% of the remaining pool; expected losses on the original pool balance total 0.2%. The pool has experienced no realized losses to date. Fitch has designated eight loans (45.8%) as Fitch Loans of Concern, which includes two specially serviced assets (19.6%).

As of the May 2013 distribution date, the pool's aggregate principal balance has been reduced by 94.6% to $83.9 million from $1.56 billion at issuance. Per the servicer reporting, three loans (26% of the pool) are currently defeased. Interest shortfalls are affecting classes B-7 through C.

The largest contributor to expected losses is a loan secured by a 124,000 square foot (sf) retail shopping center located in Lodi, CA (3.9% of the pool). Though the loan is current and performance has been relatively stable since issuance, the center's three largest tenants all have leases expiring within the next one to two years. Fitch took the near-term lease expiration into account in its analysis.

The next largest contributor to expected losses is a loan secured by a 59,000 sf retail outlet located in Casselberry, FL (4.4%). This property's performance has been below expectations since 2002 due to decline in the income and a result of higher vacancy. The property is 79.43% occupied as of May 3, 2013; the market is competitive which has led to leasing challenges. Additionally, two of the three largest tenants have leases which expire within the next one to two years.

RATING SENSITIVITIES

The ratings on classes B-4 through B-7 are expected to be stable as the credit enhancement remains high through continued pay down.

Fitch affirms the following classes as indicated:

--$17.6 million class B-4 at 'AAAsf', Outlook Stable;

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

--$27.4 million class B-6 at 'BBB-sf', Outlook Stable;

--$15.6 million class B-7 at 'B-sf', 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 on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 18, 2012 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' (June 6, 2012);

--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 18, 2012).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

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

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=696969

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=793199

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, New York, Media Relations
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com
or
Primary Analyst
Analyst
Alex Benz, +1-212-908-0854
or
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Committee Chairperson
Senior Director
Christopher Bushart, +1-212-908-0606

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