Approximately $124.7 Million of Structured Securities Affected
New York, April 15, 2009 -- Moody's Investors Service ("Moody's) affirmed the ratings
of two classes and upgraded three classes of Morgan Stanley Capital I
Inc., Commercial Mortgage Pass-Through Certificates,
Series 1998-CF1. The upgrades are due to increased subordination
due to amortization and payoffs and overall stable pool performance.
The pool balance has decreased by 58% since last review.
The action is the result of Moody's on-going surveillance
of commercial mortgage backed securities ("CMBS") transactions.
As of the March 16, 2009 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 89%
to $124.7 million from $1.1 billion at securitization.
The Certificates are collateralized by 58 loans ranging in size from less
than 1% to 8% of the pool, with the 10 largest loans
representing 51% of the pool. Five loans, representing
8% of the pool, have defeased and are secured by U.S.
Twelve loans, representing 26% of the pool, are on
the master servicer's watchlist. The watchlist includes loans which
meet certain portfolio review guidelines established as part of the Commercial
Mortgage Securities Association's monthly reporting package.
As part of our ongoing monitoring of a transaction, Moody's
reviews the watchlist to assess which loans have material issues that
could impact performance.
Forty-seven loans have been liquidated from the pool, resulting
in an aggregate realized loss of approximately $76.5 million.
Classes J, K, L, M and N have been eliminated entirely
due to losses and Class H has experienced a loss of $6.2
million. Three loans, representing 8% of the pool,
are currently in special servicing. Two of the loans, representing
2.5% of the pool, are secured by healthcare properties
and the third is secured by a multifamily property. Moody's
is estimating an aggregate loss of approximately $3.9 million
for the specially serviced loans.
As of the most recent distribution date, unpaid interest totaled
$5.8 million for Class H. In general, interest
shortfalls are caused by trust expenses associated with specially serviced
loans, including special servicing fees, legal expenses and
other expenses associated with the resolution of a loan. Interest
shortfalls can also result when the servicer only advances a portion of
the monthly principal and interest ("P&I") payment for a specially
serviced loan because of a decline in the value of the underlying property
(based on an appraisal reduction determination), or the servicer
recovers previous P&I over-advances prior to a loan being liquidated.
Moody's was provided with full-year 2007 and partial or full-year
2008 operating results for 83% and 71% of the pool,
respectively. Moody's loan to value ("LTV") ratio is 74%,
the same as in Moody's prior full review in April 2008.
The top three non-defeased loans represent 7.9% of
the pool. The largest loan is the Bristol Market Place Loan ($9.9
million -- 7.9%) which is secured by a 99,256
square foot retail center located in Santa Ana, California.
The major tenants include Smart & Final and a Sav-On.
The center was 92% occupied as of February 2009 compared to 98%
at last review. Moody's LTV is 71% compared to 72%
at last review.
The second largest loan is the Preston Place Apartments Loan ($9.2
million -- 7.4%) which is secured by a 239-unit
multifamily property located in Plano, Texas. Performance
has been stable since last review. Moody's LTV is 50%
compared to 51% at last review.
The third largest loan is the Van Dorn Station Loan ($7.4
million -- 6.0%) which is secured by a 75,000
square foot retail center located in Alexandria, Virginia.
The center is primarily tenanted by restaurants and service tenants.
Performance has been stable since last review. Moody's valuation
of this loan incorporates a stressed cash flow due to our concerns about
the retail environment. Moody's LTV is 50% compared
to 49% at last review.
Moody's rating action is as follows:
-Class X, Notional, affirmed at Aaa; previously
affirmed at Aaa on April 7, 2008
-Class D, $45,081,272, upgraded
to Aaa from Aa2; previously upgraded to Aa2 from Aa3 on April 7,
-Class E, $19,378,000, upgraded
to A2 from Baa2; previously upgraded to Baa2 from Ba2 on April 7,
-Class F, $22,146,000, upgraded
to B2 from B3; previously upgraded to B3 from Caa2 on April 7,
-Class G, $33,218,000, affirmed
at C; previously affirmed at C on April 7, 2008
-Class H, $4,850,335, affirmed at
C; previously affirmed at C on April 7, 2008
Moody's monitors transactions on both a monthly basis through two sets
of quantitative tools: MOST® (Moody's Surveillance Trends) and
CMM on Trepp, and a periodic basis through a full review.
Moody's prior full review is summarized in a press release dated April
The principal methodology used in rating and monitoring this transaction
is "CMBS: Moody's Approach to Rating U.S. Conduit
Transactions" dated September 15, 2000, which can be found
at www.moodys.com in the Credit Policy & Methodologies
directory, in the Ratings Methodologies subdirectory. Other
methodologies and factors that may have been considered in the process
of rating this issue can also be found in the Credit Policy & Methodologies
VP - Senior Credit Officer
Structured Finance Group
Moody's Investors Service
Moody's Affirms Two and Upgrades Three Classes of MSC 1998-CF1
Michael M. Gerdes
Senior Vice President
Structured Finance Group
Moody's Investors Service