Fitch Upgrades 3 Classes of Prudential, Series 1999-NRF1

NEW YORK--(BUSINESS WIRE)--Fitch Ratings upgrades Prudential Securities Secured Financing Corp.'s (Prudential) commercial mortgage pass-through certificates, series 1999-NRF1, as follows:

-- $25.5 million class G to 'AA-' from 'A+';

-- $9.3 million class H to 'A' from 'A-';

-- $9.3 million class J to 'BBB+' from 'BBB'.

Additionally, Fitch affirms the following classes:

-- $53.0 million class A-2 at 'AAA';

-- Interest-only class A-EC at 'AAA';

-- $51.1 million class B at 'AAA';

-- $46.4 million class C at 'AAA';

-- $46.4 million class D at 'AAA';

-- $13.9 million class E at 'AAA';

-- $20.9 million class F at 'AAA'.

Fitch does not rate the $15.8 million class K, $6.5 million class L, or $7.4 million class M certificates. The A-1 certificates have paid in full.

The upgrade reflects increased credit enhancement due to 37% paydown as the result of scheduled amortization and loan payoffs since last review. As of the July 2008 distribution date, the pool's aggregate balance has been reduced 67.1%, to $305.6 million from $928.9 million at issuance. Twenty-nine loans (20.5%), including three of the ten largest loans in the pool, have defeased.

Fitch has identified 16 loans of concern (13.0%), including specially serviced loans, loans with upcoming maturities that may experience difficulties refinancing, those exhibiting low debt service coverage ratios (DSCR), low occupancy and other performance issues as well. Seventy-two loans (60.1%) mature within the next 12 months. Of these 72 loans, 12 are loans of concern (11.7%) and 28 have defeased 19.3%). The weighted average loan rate of the maturing loans is 7.47%.

There are currently five specially serviced assets: two loans that are current (0.8%), one loan that is 90+ days delinquent (0.5%), one performing matured loan (0.5%), and one non-performing matured loan (1.4%).

The largest specially serviced loan (1.4%) was transferred due to maturity default in January 2008 and is secured by a healthcare property located in Great Falls, MT.

Losses on the specially serviced loans are expected to be absorbed by the non-rated class M.

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