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I AGREE
12 Nov 2019
Approximately $2.2 million of structured securities affected
New York, November 12, 2019 -- Moody's Investors Service has upgraded the rating on one class and affirmed
the ratings on two classes in Prudential Securities Secured Financing
Corporation 1999-C2, Commercial Mortgage Pass-Through
Certificates, Series 1999-C2, as follows:
Cl. N, Upgraded to Aa1 (sf); previously on May 2,
2018 Upgraded to Ba1 (sf)
Cl. A-EC*, Affirmed C (sf); previously on
May 2, 2018 Affirmed C (sf)
Cl. A-EC2*, Affirmed C (sf); previously on
May 2, 2018 Affirmed C (sf)
* Reflects Interest Only Classes
RATINGS RATIONALE
The ratings on Cl. N was upgraded due to the class being fully
covered by defeasance, however, the class had previous interest
shortfalls for seven months between 2009 and 2010.
The ratings on the IO classes were affirmed based on the credit quality
of their referenced classes.
Moody's rating action reflects a base expected loss of 0.6%
of the current pooled balance. Moody's base expected loss plus
realized losses is now 2.0% of the original pooled balance.
Moody's provides a current list of base expected losses for conduit
and fusion CMBS transactions on moodys.com at http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF215255.
FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS:
The performance expectations for a given variable indicate Moody's forward-looking
view of the likely range of performance over the medium term. Performance
that falls outside the given range can indicate that the collateral's
credit quality is stronger or weaker than Moody's had previously expected.
Factors that could lead to an upgrade of the ratings include a significant
amount of loan paydowns or amortization, an increase in the pool's
share of defeasance or an improvement in pool performance.
Factors that could lead to a downgrade of the ratings include an increase
in realized losses from specially serviced loans or interest shortfalls.
METHODOLOGY UNDERLYING THE RATING ACTION
The principal methodology used in rating all classes except interest-only
class was "Moody's Approach to Rating Large Loan and Single
Asset/Single Borrower CMBS" published in July 2017. The methodologies
used in rating interest-only classes were "Moody's
Approach to Rating Large Loan and Single Asset/Single Borrower CMBS"
published in July 2017 and "Moody's Approach to Rating Structured
Finance Interest-Only (IO) Securities" published in February
2019. Please see the list of ratings at the top of this announcement
to identify which classes are interest-only (indicated by the *).
Please see the Rating Methodologies page on www.moodys.com
for a copy of these methodologies.
DEAL PERFORMANCE
As of the October 18, 2019 distribution date, the transaction's
aggregate certificate balance has decreased by over 99% to $4.5
million from $869 million at securitization. The certificates
are collateralized by four mortgage loans. Three loans, constituting
87% of the pool, have defeased and are secured by US government
securities. The other loan is in special servicing.
Seventeen loans have been liquidated from the pool, resulting in
or contributing to an aggregate realized loss of $17.3 million
(for an average loss severity of 14.6%).
The loan in special servicing is the Walgreens Drug Store Loan ($580,289
-- 12.8% of the pool), which is secured by a
free standing Walgreens located 20 miles west of the Detroit CBD in Wayne,
Michigan. The loan passed its anticipated repayment date (ARD)
in 2009 and has since amortized 81% from securitization.
The loan transferred to special servicing in August 2018 for monetary
default. Walgreens provided notice in October 2018 of its intent
to vacate if they were unable to lower the significantly above market
rent payments. Walgreens subsequently executed a lease extension
through 2059 with termination options every five years. The loan
became REO in August 2019 and the special servicer indicated the property
has been listed for sale.
REGULATORY DISCLOSURES
For further specification of Moody's key rating assumptions and sensitivity
analysis, see the sections Methodology Assumptions and Sensitivity
to Assumptions of the disclosure form.
The analysis includes an assessment of collateral characteristics and
performance to determine the expected collateral loss or a range of expected
collateral losses or cash flows to the rated instruments. As a
second step, Moody's estimates expected collateral losses or cash
flows using a quantitative tool that takes into account credit enhancement,
loss allocation and other structural features, to derive the expected
loss for each rated instrument.
Moody's did not use any stress scenario simulations in its analysis.
For ratings issued on a program, series, category/class of
debt or security this announcement provides certain regulatory disclosures
in relation to each rating of a subsequently issued bond or note of the
same series, category/class of debt, security or pursuant
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ratings in accordance with Moody's rating practices. For ratings
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support provider and in relation to each particular credit rating action
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credit rating. For provisional ratings, this announcement
provides certain regulatory disclosures in relation to the provisional
rating assigned, and in relation to a definitive rating that may
be assigned subsequent to the final issuance of the debt, in each
case where the transaction structure and terms have not changed prior
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affected the rating. For further information please see the ratings
tab on the issuer/entity page for the respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Rhett Terrell
Analyst
Structured Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Matthew Halpern
VP - Senior Credit Officer
Structured Finance Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
No Related Data.
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