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Rating Action:

Moody's Upgrades One and Affirms Eight CMBS Classes of PNCMA 2000-C1

Global Credit Research - 28 Apr 2011

Approximately $83.2 Million of Structured Securities Affected

New York, April 28, 2011 -- Moody's Investors Service (Moody's) upgraded the rating of one class and affirmed eight classes of PNC Mortgage Acceptance Corporation Commercial Mortgage Pass-Through Certificates, Series 2000-C1 as follows:

Cl. X, Affirmed at Aaa (sf); previously on Nov 8, 2000 Definitive Rating Assigned Aaa (sf)

Cl. E, Upgraded to Aaa (sf); previously on Sep 25, 2008 Upgraded to Aa1 (sf)

Cl. F, Affirmed at A1 (sf); previously on Jun 30, 2010 Confirmed at A1 (sf)

Cl. G, Affirmed at B1 (sf); previously on Jun 30, 2010 Downgraded to B1 (sf)

Cl. H, Affirmed at Ca (sf); previously on Jun 30, 2010 Downgraded to Ca (sf)

Cl. J, Affirmed at C (sf); previously on Jun 30, 2010 Downgraded to C (sf)

Cl. K, Affirmed at C (sf); previously on Jun 30, 2010 Downgraded to C (sf)

Cl. L, Affirmed at C (sf); previously on Jun 30, 2010 Downgraded to C (sf)

Cl. M, Affirmed at C (sf); previously on Jun 30, 2010 Downgraded to C (sf)

RATINGS RATIONALE

The upgrade is due to the significant increase in subordination due to loan payoffs and amortization and overall stable pool performance. The pool has paid down by 25% since Moody's last review.

The affirmations are due to key parameters, including Moody's loan to value ratio (LTV), Moody's stressed debt service coverage ratio (DSCR) and the Herfindahl Index (Herf), remaining within acceptable ranges. Based on our current base expected loss, the credit enhancement levels for the affirmed classes are sufficient to maintain their current ratings.

Moody's rating action reflects a cumulative base expected loss of 35% of the current balance. At last review, Moody's cumulative base expected loss was 28%. The current cumulative base expected loss represents a higher percentage of the pool than at last review due to significant pay downs since last review, even though the dollar amount of expected loss is less. At last review Moody's cumulative expected loss was $31 million compared to $29 million at this review. Moody's stressed scenario loss is 38% of the current balance. Moody's provides a current list of base and stress scenario losses for conduit and fusion CMBS transactions on moodys.com at http://v3.moodys.com/viewresearchdoc.aspx?docid=PBS_SF215255. Depending on the timing of loan payoffs and the severity and timing of losses from specially serviced loans, the credit enhancement level for investment grade classes could decline below the current levels. If future performance materially declines, the expected level of credit enhancement and the priority in the cash flow waterfall may be insufficient for the current ratings of these classes.

Moody's forward-looking view of the likely range of performance over the medium term. From time to time, Moody's may, if warranted, change these expectations. Performance that falls outside the given range may indicate that the collateral's credit quality is stronger or weaker than Moody's had anticipated when the related securities ratings were issued. Even so, a deviation from the expected range will not necessarily result in a rating action nor does performance within expectations preclude such actions. The decision to take (or not take) a rating action is dependent on an assessment of a range of factors including, but not exclusively, the performance metrics.

Primary sources of assumption uncertainty are the current sluggish macroeconomic environment and varying performance in the commercial real estate property markets. However, Moody's expects to see increasing or stabilizing property values, higher transaction volumes, a slowing in the pace of loan delinquencies and greater liquidity for commercial real estate in 2011 The hotel and multifamily sectors are continuing to show signs of recovery, while recovery in the office and retail sectors will be tied to recovery of the broader economy. The availability of debt capital continues to improve with terms returning toward market norms. Moody's central global macroeconomic scenario reflects an overall sluggish recovery through 2012, amidst ongoing individual, corporate and governmental deleveraging, persistent unemployment, and government budget considerations.

The principal methodologies used in this rating were "Moody's Approach to Rating Conduit Transactions" published in September 2000 and "CMBS: Moody's Approach to Rating Large Loan/Single Borrower Transactions" published in July 2000.

Moody's review incorporated the use of the excel-based CMBS Conduit Model v 2.50 which is used for both conduit and fusion transactions. Conduit model results at the Aa2 level are driven by property type, Moody's actual and stressed DSCR, and Moody's property quality grade (which reflects the capitalization rate used by Moody's to estimate Moody's value). Conduit model results at the B2 level are driven by a paydown analysis based on the individual loan level Moody's LTV ratio. Moody's Herfindahl score (Herf), a measure of loan level diversity, is a primary determinant of pool level diversity and has a greater impact on senior certificates. Other concentrations and correlations may be considered in our analysis. Based on the model pooled credit enhancement levels at Aa2 and B2, the remaining conduit classes are either interpolated between these two data points or determined based on a multiple or ratio of either of these two data points. For fusion deals, the credit enhancement for loans with investment-grade credit estimates is melded with the conduit model credit enhancement into an overall model result. Fusion loan credit enhancement is based on the credit estimate of the loan which corresponds to a range of credit enhancement levels. Actual fusion credit enhancement levels are selected based on loan level diversity, pool leverage and other concentrations and correlations within the pool. Negative pooling, or adding credit enhancement at the credit estimate level, is incorporated for loans with similar credit estimates in the same transaction.

Moody's uses a variation of Herf to measure diversity of loan size, where a higher number represents greater diversity. Loan concentration has an important bearing on potential rating volatility, including risk of multiple notch downgrades under adverse circumstances. The credit neutral Herf score is 40. The pool has a Herf of 11 compared to 17 at Moody's prior review.

In cases where the Herf falls below 20, Moody's also employs the large loan/single borrower methodology. This methodology uses the excel-based Large Loan Model v 8.0 and then reconciles and weights the results from the two models in formulating a rating recommendation. The large loan model derives credit enhancement levels based on an aggregation of adjusted loan level proceeds derived from Moody's loan level LTV ratios. Major adjustments to determining proceeds include leverage, loan structure, property type, and sponsorship. These aggregated proceeds are then further adjusted for any pooling benefits associated with loan level diversity, other concentrations and correlations.

Moody's ratings are determined by a committee process that considers both quantitative and qualitative factors. Therefore, the rating outcome may differ from the model output.

The rating action is a result of Moody's on-going surveillance of commercial mortgage backed securities (CMBS) transactions. Moody's monitors transactions on a monthly basis through two sets of quantitative tools -- MOST® (Moody's Surveillance Trends) and CMM (Commercial Mortgage Metrics) on Trepp -- and on a periodic basis through a comprehensive review. Moody's prior full review is summarized in a press release dated June 30, 2010. Please see the ratings tab on the issuer / entity page on moodys.com for the last rating action and the ratings history.

Moody's Investors Service did not receive or take into account a third-party due diligence report on the underlying assets or financial instruments related to the monitoring of this transaction in the past six months.

DEAL PERFORMANCE

As of the April 15, 2011 distribution date, the transaction's aggregate certificate balance has decreased by 90% to $83 million from $801 million at securitization. The Certificates are collateralized by 30 mortgage loans ranging in size from less than 1% to 20% of the pool, with the top ten loans representing 71% of the pool. Two loans, representing 3% of the pool, have defeased and are collateralized with U.S. Government securities. The pool faces significant refinance risk as loans representing 68% of the pool either have or will mature within the next six months.

Three loans, representing 9% 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 CRE Finance Council's (CREFC) 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.

Thirty-five loans have been liquidated from the pool, resulting in a realized loss of $17.4 million (18% loss severity). Eleven loans, representing 58% of the pool, are currently in special servicing. Moody's has estimated an aggregate $28 million loss (62% expected loss on average) for the specially serviced loans.

Moody's has assumed a high default probability for three poorly performing loans representing 8% of the pool and has estimated an aggregate $1 million loss (15% expected loss based on a 50% probability default) from these troubled loans.

Moody's was provided with full year 2009 operating results for 94% of the pool. Excluding specially serviced and troubled loans, Moody's weighted average LTV is 88% compared to 87% at Moody's prior review. Moody's net cash flow reflects a weighted average haircut of 23% to the most recently available net operating income. Moody's value reflects a weighted average capitalization rate of 10%.

Excluding specially serviced and troubled loans, Moody's actual and stressed DSCRs are 1.22X and 1.87X, respectively, compared to 1.20X and 1.76X at last review. Moody's actual DSCR is based on Moody's net cash flow (NCF) and the loan's actual debt service. Moody's stressed DSCR is based on Moody's NCF and a 9.25% stressed rate applied to the loan balance.

The top three performing conduit loans represent 16% of the pool balance. The largest loan is the Willow Run Business Center II Loan ($8.4 million -- 10% of the pool) which is secured by a 400,000 square foot industrial building which is 100% leased to General Motors (Moody's senior unsecured rating Ba2; stable outlook) through August 2012). At least review, General Motors announced that they would close the plant, however they in fact renewed their lease for a two year period. The loan matures on May 15, 2011. Moody's LTV and stressed DSCR are 112% and 1.01X, respectively, compared to 115% and 0.98X at last review.

The second largest performing conduit loan is the Hampton Inn Maple Grove Loan ($3 million -- 12.8% of the pool), which is secured by a limited service hotel property located in Maple Grove, Minnesota. The loan is performing in-line with the prior reviews, and has benefited from amortization. Moody's LTV and stressed DSCR are 64% and 2.02X, respectively, compared to 66% and 1.95X at last review.

The third largest performing conduit loan is the Oregon Portfolio Loan ($2 million -- 3% of the pool), which is secured by two cross collateralized and cross defaulted multifamily properties in Philadelphia, Pennsylvania. The current weighted average occupancy is 99% for the two properties compared with 97% at last review. The loan is performing in-line with the prior reviews, and has benefited from amortization. Moody's LTV and stressed DSCR are 61% and 1.71X, respectively, compared to 63% and 1.66X at last review.

The top three specially serviced loans represent 39% of the pool. The largest loan is the Ryder Integrated Logistics Loan ($16 million -- 19% of the pool), which is secured by a 455,000 square foot industrial building located in Auburn Hills Michigan. At last review the building was 100% leased by Ryder Integrated Logistics, however it has since vacated the property the property is now real estate owned (REO).

The second largest specially serviced loan is the CSC Office Building Loan ($11 million -- 13% of the pool), which is secured by 140,000 square foot office property located in Southfield Michigan. The loan transferred to special servicing due to maturity default. and is now REO. As of February 2011, the property was 35% leased compared to 71% at last review.

The third largest specially serviced loan is the Avanex Building Loan ($5 million -- 6% of the pool), which is secured by a 54,000 square foot office property located in Fremont California. This loan went into payment default in 2009 and is currently REO. The property is 100% leased compared to 28% at last review.

REGULATORY DISCLOSURES

Information sources used to prepare the credit rating are the following: parties involved in the ratings, parties not involved in the ratings, public information, confidential and proprietary Moody's Investors Service information, and confidential and proprietary Moody's Analytics information.

Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purposes of maintaining a credit rating.

Moody's adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see ratings tab on the issuer/entity page on Moodys.com for the last rating action and the rating history.

The date on which some Credit Ratings were first released goes back to a time before Moody's Investors Service's Credit Ratings were fully digitized and accurate data may not be available. Consequently, Moody's Investors Service provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see the Credit Policy page on Moodys.com for the methodologies used in determining ratings, further information on the meaning of each rating category and the definition of default and recovery.

New York
Brad Kamedulski
Associate Analyst
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Sandra Ruffin
VP - Senior Credit Officer
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's Investors Service
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's Upgrades One and Affirms Eight CMBS Classes of PNCMA 2000-C1
No Related Data.
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