Fitch Downgrades 1 Class of CMAC 1998-C2

NEW YORK--()--Fitch Ratings has downgraded one class and affirmed two classes of Commercial Mortgage Acceptance Corp. (CMAC) commercial mortgage pass through certificates series 1998-C2. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The pool is concentrated with only 33 of the original 512 loans remaining but has experienced stable performance and continued paydown since Fitch's last rating action. The downgrade to class J is attributable to the likelihood that losses will occur. Since last review there have been 24 loans that have been disposed including the largest remaining loan ($19.5 million) and the lone specially serviced loan ($1 million). There were no losses experienced on any of the disposed loans.

Fitch has designated four loans (21.6%) as Fitch Loans of Concern, which does not include any specially serviced loans. As of the April 2014 distribution date, the pool's aggregate principal balance has been reduced by 97.9% to $60.2 million from $2.89 billion at issuance. Per the servicer reporting, eight loans (17.3% of the pool) are defeased. Interest shortfalls are currently affecting classes K through M.

The largest contributor to expected losses is a loan secured by a 92-unit extended care facility in Sudbury, MA. The property experienced a flood in 2010 rendering the first floor unusable until the repairs were completed in 2012. According to the servicer, lease-up has been slow due to having to remarket the facility to hospitals and discharge planners. As of year-end 2012 the facility was 77% occupied and experienced a net operating loss of 64,061. 2013 financials were not available. Despite the underperformance of the property the loan remains current.

RATING SENSITIVITY

Class J is expected to be downgraded upon the realization of losses to the class. Class K will remain at 'Dsf' as losses have been realized.

Fitch downgrades the following classes as indicated:

--$59.4 million class J to 'Csf' from 'CCsf', RE 95%.

Fitch affirms the following classes as indicated:

--$763,342 class K at 'Dsf', RE 0%;

--$0 class L at 'Dsf', RE 0%.

The class A-1, A-2, A-3, B, C, D, E, G and H certificates have paid in full. Fitch does not rate the class F and M certificates. Fitch previously withdrew the rating on the interest-only class X certificates.

Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 11, 2013 report, 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is available at 'www.fitchratings.com' under the following headers:

Structured Finance >> CMBS >> Criteria Reports

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 24, 2013);

--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 11, 2013).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724961

Additional Disclosure

Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=827800

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Contacts

Fitch Ratings
Primary Analyst
Dustin Pike, +1-212-612-7875
Associate Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Committee Chairperson
Mary MacNeill, +1-212-908-0785
Managing Director
or
Media Relations, New York
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com

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Contacts

Fitch Ratings
Primary Analyst
Dustin Pike, +1-212-612-7875
Associate Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Committee Chairperson
Mary MacNeill, +1-212-908-0785
Managing Director
or
Media Relations, New York
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com