Fitch Affirms LB Commercial Mortgage Trust 1999-C2

NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed LB Commercial Mortgage Trust's commercial mortgage pass-through certificates, series 1999-C2, as follows:

--$317.5 million class A-2 at 'AAA';

--Interest-only class X at 'AAA';

--$37.9 million class B at 'AAA';

--$37.9 million class C to 'AAA';

--$13.4 million class D to 'AAA';

--$23.4 million class E at 'AAA';

--$12.3 million class F at 'AAA'.

Fitch does not rate classes G through P. Class A-1 has paid in full.

The affirmations are the result of stable performance since Fitch's last rating action. As of the August 2008 distribution date, the pool's aggregate principal balance has decreased 43.9% to $500.8 million, from $892.4 million at issuance. 32 two loans (28.6%) have fully defeased, including four of the top-10 loans (7.8%).

While the transaction is heavily concentrated, with the largest loan collateralizing 25.5% of the pool, that loan continues to perform well. The loan is the $127.7 million A Note secured by the SunAmerica Center, an office property located in Century City, West Los Angeles, CA. The loan continues to demonstrate strong performance, with a servicer reported year-end (YE) 2007 debt service coverage ratio (DSCR) of 2.17 times (x) for the A note, and property occupancy of 98.1%.

There are currently four assets (2.7%) in special servicing, of which one (0.4%) is real estate owned (REO). Losses are expected on the specially serviced assets, but are expected to be absorbed by the non-rated classes.

Fitch Loans of Concern total 9.2% of the outstanding collateral balance, and include the specially serviced assets, loans with DSCRs below 1.0x, loans with Fitch stressed LTVs of greater than 100%, and loans with other performance issues.

55 non-defeased loans comprising 38.8% of the pool mature in 2009. These loans have a weighted-average interest rate of 8.20%, a servicer-reported YE 2007 weighted-average DSCR of 1.57x, and a weighted-average Fitch stressed LTV of 69.5%. Additionally, the largest loan in the pool (25.5%) has an anticipated repayment date in October 2009.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 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.