Fitch Upgrades 2 Classes of GMAC 1998-C2

NEW YORK--(BUSINESS WIRE)--Fitch upgrades two classes of GMAC Commercial Mortgage Securities, Inc., series 1998-C2 as follows:

-- $44.3 million class G to 'AAA' from 'A';

-- $19.0 million class H to 'A' from 'BBB-'.

Fitch also affirms the following classes:

-- Interest Only (IO) class X at 'AAA';

-- $107.6 million class D at 'AAA';

-- $38 million class E at 'AAA';

-- $88.6 million class F at 'AAA';

-- $19.0 million class J at 'BB+';

-- $19.0 million class K at 'BB-'.

The $25.3 million class L remains at 'CC/DR3' and the $12.9 million class M remains at 'C/DR6'. Classes A-1, A-2, B and C have paid in full.

The upgrades are the result of additional credit enhancement due to significant pay down since Fitch's last review (57.3%). The affirmations of the junior classes are due to an increase in specially serviced assets and loss expectations since Fitch's last rating action. As of the August 2008 distribution date, the transaction's principal balance decreased 85.2% to $373.6 million compared to $2.53 billion at issuance. Fourteen loans (23.7%) have defeased.

Fitch has identified nineteen Loans of Concern (17.1%), which includes ten specially serviced assets (11.6%) with significant losses anticipated. The largest Fitch Loan of Concern (2.4%), is specially serviced, and is secured by a multifamily property in foreclosure located in Saline, MI. The property is currently for sale with losses expected upon liquidation.

The second largest Loan of Concern is also specially serviced (1.5%) and is secured by a retail property located in Indianapolis, IN. The loan is past its scheduled May 2008 maturity and the borrower is working to secure refinancing.

The largest remaining loan in the pool (6.8%) is collateralized by a multifamily property in Ft. Myers, FL. Servicer reported year-end (YE) 2007 occupancy was 98.9% with a debt service coverage ratio (DSCR) of 2.72 times (x).

The second largest loan (6.1%) is secured by a portfolio of industrial warehouse facilities located throughout Connecticut. Servicer reported YE 2007 occupancy was 91.3% with a DSCR of 1.37x.

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