Fitch Ratings has affirmed six classes of GMAC Commercial Mortgage Securities, Inc.'s commercial mortgage pass-through certificates series 1998-C1. A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The affirmations reflect continued expected losses from the largest loan in the pool. As of the January 2014 distribution date, the pool's aggregate principal balance has been reduced by 91.6% to $121 million from $1.44 billion at issuance with two loans remaining. The pool has experienced $11.7 million (0.8% of the original pool balance) in realized losses to date.
The largest remaining loan is the specially-serviced Senior Living Properties Portfolio (92.6% of the pool), which is currently secured by 42 healthcare properties located in Texas. The portfolio originally consisted of 87 properties located in both Illinois and Texas and experienced extensive operating losses beginning in 2000. Operating losses were a result of lower revenues due to changes in the Medicare and Medicaid reimbursement rates. The loan transferred to special servicing in 2001 and subsequently 30 properties located in Illinois were liquidated in 2005 and 2006. The borrower continues to sell the remaining assets in the portfolio and is currently in negotiations to sell 15 of the 42 remaining properties. Based on recent valuations of the properties and increasing fees and expenses as the pool takes longer to liquidate, Fitch expects significant losses upon disposition of the assets.
RATING SENSITIVITY
The remaining classes are expected to be subject to further downgrades as losses are realized.
Fitch affirms the following classes as indicated:
--$28.5 million class G at 'CCsf', RE 30%;
--$25.2 million class H at 'Csf', RE 0%;
--$14.4 million class J at 'Csf', RE 0%;
--$25.2 million class K at 'Csf', RE 0%;
--$14.4 million class L at 'Csf', RE 0%;
--$10.8 million class M at 'Csf', RE 0%.
The class A-1, A-2, B, C, D, E and F certificates have paid in full. Fitch does not rate the class N certificates. 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 24, 2013);
--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 11, 2013).
Applicable Criteria and Related Research:
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724961
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=818135
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Fitch Ratings
Primary Analyst
Martin Nunnally, +1-212-908-0871
Associate
Director
Fitch Ratings, Inc.
One State Street Plaza
New
York, NY 10004
or
Committee Chairperson
Mary MacNeill,
+1-212-908-0785
Managing Director
or
Media Relations
Sandro
Scenga, New York, +1-212-908-0278
sandro.scenga@fitchratings.com