Fitch Upgrades Prudential Securities Secured Financing Corp. 1999-NRF1

NEW YORK--()--Fitch Ratings has upgraded and revised the Rating Outlook on the class J notes for Prudential Securities Secured Financing Corp.'s (Prudential) commercial mortgage pass-through certificates, series 1999-NRF1.

--$3.4 million class J to 'BBsf' from 'B-sf'; Outlook to Stable from Negative.

KEY RATING DRIVERS

The upgrade is due to increased credit enhancement and stable performance of the remaining collateral. Fitch modeled losses of 18.7% of the remaining pool; expected losses on the original pool balance total 3.3%, including $28.8 million (3.1% of the original pool balance) in realized losses to date.

There are six loans remaining in the pool, three are designated as Fitch Loans of Concern (73.3%), which includes one specially serviced asset (29.2%). As of the May 2014 distribution date, the pool's aggregate principal balance has been reduced by 98.7% to $11.7 million from $928.9 million at issuance. Interest shortfalls are currently affecting classes K through M.

The largest loan in the pool (29.2%), is secured by a 66,000 square-foot flex industrial/office complex in Novi, MI. The property continues to experience cash flow issues due to low occupancy. As of March 2014, occupancy is approximately 20% as the largest tenant vacated in 2013, but will continue to pay rent until its July 2014 lease expiration. The special servicer is pursuing foreclosure.

RATING SENSITIVITY

The upgrade to class J reflects the high credit enhancement to the class. However, further upgrades will be limited as the pool is highly concentrated; the remaining six loans are primarily secured by properties located in tertiary markets. Three of the remaining loans (26.5%) are fully amortizing and mature beginning in 2018.

The classes A-1, A-2, B, C, D, E, F, G and H have paid in full. Fitch does not rate the class K, L and M certificates. Fitch previously withdrew the rating on the interest-only class A-EC 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 20, 2014);

--'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=748821

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=831380

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Contacts

Fitch Ratings
Primary Analyst
Tiffany Pierce, +1-212-908-9107
Associate Director
Fitch Ratings, Inc.
33 Whitehall Street
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
Tiffany Pierce, +1-212-908-9107
Associate Director
Fitch Ratings, Inc.
33 Whitehall Street
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