Fitch Ratings has upgraded one class of GMAC Commercial Mortgage Securities, Inc. (GMAC) commercial mortgage pass-through certificates series 1997-C1. A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The upgrade reflects increasing credit enhancement and defeasance. Only 15 of the original 356 loans remain, two of which are defeased (39.2%). Fitch modeled losses of 7% of the remaining pool; expected losses on the original pool balance total 3.8%, including $60.9 million (3.6% of the original pool balance) in realized losses to date. Fitch has designated four loans (21.6%) as Fitch Loans of Concern, which includes two specially serviced assets (14.7%).
As of the January 2015 distribution date, the pool's aggregate principal balance has been reduced by 97% to $50.2 million from $1.7 billion at issuance. Interest shortfalls are currently affecting classes H and K.
The second largest loan in the pool and the largest contributor to expected losses is a specially-serviced loan (7.8% of the pool) secured by two retail properties, the 84,729 square foot (sf) property located in Portage, WI and the 96,479 sf property located in Waseca, MN. The loan transferred to special servicing in May 2014 due to a monetary default caused by K-Mart vacating the Portage property. The occupancy for the Portage property is approximately 2% and the Waseca property is approximately 50%. The combined net operating income (NOI) debt service coverage ratio (DSCR) was .10x as of December 2014.
RATING SENSITIVITIES
The Rating Outlook on class G is Stable due to the high likelihood of full principal recovery. No further upgrades to class G is warranted given that the class has experienced interest shortfalls previously, as well as the remote potential for interest shortfalls in the future. According to Fitch's global criteria for rating caps, Fitch will not assign or maintain 'AAAsf' or 'AAsf' ratings for notes that it believes have a high level of vulnerability to interest shortfalls or deferrals, even if permitted under the terms of the documents (for more details please see the full report titled 'Criteria for Rating Caps and Limitations in Global Structured Finance Transactions', dated May 28, 2014, at www.fitchratings.com).
Fitch upgrades the following class and revises the Rating Outlook as indicated:
--$3.6 million class G to 'Asf' from 'BBBsf'; Outlook to Stable from Positive.
The class A-1, A-2, A-3, B, C, D, E and F certificates have paid in full. Fitch does not rate the class H and K certificates. Fitch previously withdrew the rating on class J and the interest-only class X certificates.
Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 10, 2014 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' (Aug. 4, 2014);
--'Criteria for Rating Caps and Limitations in Global Structured Finance Transactions' (May 28, 2014);
--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 10, 2014).
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389
Criteria for Rating Caps and Limitations in Global Structured Finance Transactions
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748781
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=977955
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.
