CHICAGO--(BUSINESS WIRE)--Fitch Ratings has affirmed the remaining classes of GMAC Commercial Mortgage Securities, Inc.'s mortgage pass-through certificates, series 1998-C2 (GMAC 1998-C2). A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The affirmations are due to sufficient credit enhancement, overall stable pool performance and defeasance. The pool has increasing loan concentrations and adverse selection with only 30 non-defeased loans remaining. Eight loans (27.6%) are defeased and 25 loans (33.9%) are fully amortizing. Loan maturities are concentrated in years 2017 (12.4%), 2018 (40.7%), and 2023 (37%).
As of the March 2015 distribution date, the pool's aggregate principal balance has been paid down by 97.25% to $69.6 million from $2.53 billion at issuance. Fitch modeled losses of 9.3% of the remaining pool; expected losses of the original pool are at 2.5% including losses already incurred to date. Fitch has designated six s Fitch Loans of Concern (37.2%) of which three (11.6%) are specially serviced.
The largest contributor to modeled losses, Georgetown Plaza Shopping Center (6.65% of the pool), is secured by a 109,800 square foot (sf) retail center in Indianapolis, IN. The borrower was unable to refinance partly due to environmental issues relating to a former tenant at the site. The special servicer has worked with the borrower and insurance company to complete remediation activities at the site. A plan has been approved and the clean-up has been ongoing. The special servicer received final disbursements from the sponsor in regard to property protection and tax payments. The loan modification was recently completed and the loan maturity date was extended to July 2017.
The second largest contributor to modeled losses, Bayhead Mobile Home Park, is a 238 pad manufactured housing community (2% of the pool) located in Tallahassee, FL. The community is located in a declining market with closings of mobile home communities and increased construction of multifamily properties. Although the sponsor has made efforts to increase occupancy by changing the manager and aggressive marketing, the property's occupancy rate decreased to a low of 28% in September 2014. The sponsor placed the property on the market and the subject is under contract. The special servicer anticipates the sale to close in the second quarter of 2015 (2Q'15).
The third largest contributor to modeled losses, Abrams Run Building, is a 45,452 sf industrial structure located in King of Prussia, PA. The subject was built in 1995 in one of the established retail corridors in the Philadelphia area. While the building historically has been fully occupied and outperformed its submarket competitive set, the latest servicer commentary indicates that two tenants recently vacated the premises and a third could relocate in late spring after their lease expiration. The market is stable and Fitch will monitor the property for progress in backfilling the vacant suites.
RATINGS SENSITIVITIES
The Outlooks for classes H and J are Stable as the ratings are not anticipated to be upgraded due to the adverse selection of the remaining collateral and asset concentration. Although negative rating actions are not anticipated, downgrades are possible with significant increased loss expectations.
Fitch affirms the following classes as indicated:
--$12.3 million class G at 'AAAsf'; Outlook Stable;
--$19 million class H at 'AAsf'; Outlook Stable;
--$19 million class J at 'BBsf'; Outlook Stable;
--$18.8 million class K at 'Dsf' RE 75%;
--$0 million class L at 'Dsf' RE 0%;
--$0 million class M at 'Dsf' RE 0%.
Fitch does not rate class N. Classes M and L have been reduced to zero due to realized losses. Classes A-1, A-2, B, C, D, E, and F have paid in full. Class X was previously withdrawn.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (March 31, 2015);
--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 10, 2014).
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864268
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=982445
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.