Fitch Downgrades One Distressed Class of MSC 1999-CAM1

NEW YORK--()--Fitch Ratings has downgraded one and affirmed three classes of Morgan Stanley Capital I Trust 1999-CAM1 (MSC 1999-CAM1). A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The downgrade of class M reflects a greater certainty of losses, primarily from the one specially serviced loan (10% of pool). The affirmations of the other remaining classes reflect stable overall pool performance and continued amortization since Fitch's last rating action. As of the May 2014 distribution date, the pool balance has been reduced by 97.9% to $16.7 million from $806.5 million at issuance. Eighteen of the original 152 loans remain. There are no defeased loans and 32.3% of the pool is fully amortizing. There are 12 loans (53.4%) which are credit-tenant lease loans on single-tenanted properties. The pool's largest listed credit tenants include: CVS Caremark Corporation (18.2% of pool), Best Buy (16.9%), and Walgreen Co. (5.8%). Interest shortfalls are currently affecting classes M through O.

The specially serviced loan (10% of pool) is secured by a 48,678 square foot (sf) office property located in Columbia, SC. The loan was transferred to special servicing after Fitch's last rating action in August 2013 for maturity default; the loan matured in June 2013. According to the latest January 2013 rent roll provided by the special servicer, the property was 56% occupied by six tenants, compared to 93% at issuance. Near-term lease expiration includes 8.4% of the property square footage in 2014 and 32% in 2015. The servicer indicated the borrower is in the process of addressing and remediating mold issues at the property. The servicer expects a deed-in-lieu of foreclosure and a real-estate owned sale.

The largest loan (20.2%) is secured by a 79,038 sf medical office property located in Fairfax, VA. Occupancy has continually declined since issuance. According to the December 2013 rent roll, occupancy was 76%, compared to 87% in 2012 and 95% at issuance. The property is occupied mostly by doctors and medically-related tenants as it is located by the Inova Fair Oaks Hospital. Although occupancy has declined, the loan's debt service coverage ratio was 2.37x for 2013.

RATINGS SENSITIVITIES

The Rating Outlook on classes K and L remains Stable as upgrades are not anticipated due to the significant concentration of the remaining pool and the risks associated with single-tenanted properties.

Fitch has downgraded the following class:

-- $6 million class M to 'Csf' from 'CCsf'; RE 90%.

In addition, Fitch has affirmed the following classes:

-- $3.8 million class K at 'BBBsf'; Outlook Stable;

-- $6 million class L at 'BB-sf'; Outlook Stable;

-- $0.8 million class N at 'Dsf'; RE 0%.

Classes A-1 through J have paid in full. Fitch does not rate class O. Fitch previously withdrew its rating on the interest-only class X.

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=832198

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Contacts

Fitch Ratings, Inc.
Primary Analyst
Melissa Che, +1-212-612-7862
Director
33 Whitehall St.
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, Inc.
Primary Analyst
Melissa Che, +1-212-612-7862
Director
33 Whitehall St.
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