MOODY'S ASSIGNS PROVISIONAL RATINGS TO MORGAN STANLEY CAPITAL I INC. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1999-RM1
New York, February 17, 1999 -- Based on information as of February 15, 1999, Moody's Investors Service assigns the following provisional ("P") ratings to Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series 1999-RM1:
Issuer: Morgan Stanley Capital I Inc.
Series: Commercial Mortgage Pass-Through Certificates, Series 1999-RM1
Class A-1; $183,000,000; (P) Aaa; Credit Support: 28.75%
Class A-2; $429,255,000; (P) Aaa; Credit Support: 28.75%
Class B; $42,966,000; (P) Aa2; Credit Support: 23.75%
Class C; $45,113,000; (P) A2; Credit Support: 18.50%
Class D; $12,890,000; (P) A3; Credit Support: 17.00%
Class E; $34,372,000; (P) Baa2; Credit Support: 13.00%
Class F; $17,186,000; Not Rated
Class X; $859,306,538 (Notional); (P) Aaa; Credit Support: N/A
Class G; $10,741,000; (P) Ba1; Credit Support: 9.75%
Class H; $23,631,000; (P) Ba2; Credit Support: 7.00%
Class J; $8,593,000; Not Rated
Class K; $12,890,000; Not Rated
Class L; $6,445,000; (P) B2; Credit Support: 3.75%
Class M; $8,593,000; (P) B3; Credit Support: 2.75%
Class N; $8,593,000; (P) Caa2; Credit Support: 1.75%
1. Significant use of reserves for on-going capital expenditures (80.6% by balance).
2. Diverse portfolio both geographically (throughout 35 states and the District of Columbia) and by asset type. California state concentration (25.7%) is offset by diversification within the state.
3. Relatively low loan concentration, with the largest loan representing 4.3% of the pool, and the top 10 loans representing 20.3%. Each of the other loans represents less than 1.1% of the pool balance.
4. Heaviest concentration among anchored retail (23.9%) and multifamily (22.9%) properties, considered by Moody's to be the most stable real estate asset classes.
1. Highly leveraged portfolio: Moody's LTV is 89%.
2. Only one loan representing 1.5% of the pool balance is structured with an initial hard lockbox.
3. Twenty-three loans representing 9.2% of the pool are secured by properties which are 100% leased to a single tenant.
4. Eleven loans representing 4.4% of the pool permit the mortgaged properties to be pledged as security for subordinate financing. In each case, the permitted second mortgages are subject to certain established DSC and LTV thresholds.
OVERVIEW OF THE MORTGAGE POOL
The aggregate outstanding principal balance of the pool is $859,306,538, comprised of 221 mortgage loans secured by 235 commercial and multifamily properties. The outstanding principal balances range from $516,977 to $36,790,447, with an average loan size of $3,752,430. The largest loan represents 4.3%, and the top 10 loans represent 20.3%. There is one group of cross-collateralized and cross-defaulted loans, representing 0.2% of the pool. There are seven mortgage loans that are secured by multiple properties, which combined represent 3.8% of the pool balance. The largest of such sub-pools is a $10.4mm loan (1.2%) secured by six limited service motels located throughout Georgia.
Currently, there are no known additional liens on any of the properties; however, two loans have unsecured affiliate debt totaling approximately $1.2mm, and one loan has unsecured mezzanine debt of $4.9mm. With respect to 11 of the mortgage loans, the loan documents allow the borrower to incur secured subordinate debt in the future, subject to minimum DSC ranging from 1.25X to 1.30X, and maximum LTV ranging from 70% to 75%.
Loan Type: The pool consists of conventional fixed rate mortgage loans with a weighted average interest rate of 7.2% and a weighted average constant of 8.5%. Each of the loans is secured by a first mortgage lien on the borrower's fee simple estate, with the exception of four loans (representing 2.9% by pool balance) which are totally or partially secured by a leasehold interest. One ground lease (0.6%) expires in 2002, but has seven 5-year renewal options. All ground leases contain full notice of default and right to cure provisions.
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