Fitch Ratings Affirms GMAC 1999-C1; Assigns Outlooks

NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed and assigned Rating Outlooks to GMAC Commercial Mortgage Securities, Inc.'s mortgage pass-through certificates, series 1999-C1 as follows:

--$117.2 million class A-2 at 'AAA'; Outlook Stable;

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

--$66.7 million class B at 'AAA'; Outlook Stable;

--$66.7 million class C at 'AAA'; Outlook Stable;

--$86.7 million class D at 'AAA'; Outlook Stable;

--$20 million class E at 'AAA'; Outlook Stable;

--$83.4 million class F at 'A-'; Outlook Positive;

--$13.3 million class G at 'BBB'; Outlook Stable;

--$26.7 million class H at 'B+'; Outlook Stable.

The $20 million class J remains at 'CCC/DR2'. The $2.4 million class K-1 is not rated by Fitch. Class A-1 has been paid in full.

Although credit enhancement levels have increased since Fitch's last rating action, Fitch expected losses have also increased and adverse selection among the remaining loans warrant affirmations of the current ratings. The Rating Outlooks reflect the likely direction of the rating changes over the next one to two years. As of the Oct. 2008 distribution date, the transaction's aggregate principal balance has decreased 62.3%, to $503.2 million from $1.33 billion at issuance. Thirty loans (29.1%) are defeased, including the partially defeased third largest loan in the pool (1.5%). Ninety-eight loans remain in the pool, decreased from 228 at issuance.

Currently, six assets (3.3%) are in special servicing with losses expected on three. The largest specially serviced asset (1.7%) is secured by two healthcare facilities with a total of 230 beds in Texas. The loan had a maturity date of Oct. 1, 2008, but the borrower failed to pay off the loan. The special servicer is formulating a workout strategy. The servicer reported year end (YE) 2007 debt service coverage ratio (DSCR) was 2.34 times (x) with the occupancy rate at 82.7%, compared to a DSCR of 2.12x with an occupancy rate of 90% at issuance.

The second largest specially serviced asset (0.8%) is secured by a 102,034 square foot (SF) industrial property in Duluth, GA. The loan was transferred to special servicing due to an imminent default as the borrower has indicated that it will be unable to payoff the loan at the Nov. 10, 2008 maturity date. The borrower has requested a loan extension to provide additional time to refinance. The servicer reported YE07 DSCR was 0.93x with the occupancy rate at 74.7%, compared to a DSCR of 1.72x with an occupancy rate of 99% at issuance.

In addition to the six specially serviced assets, Fitch has identified 15 additional loans of concern (8.7%) due to declining performance. The largest Fitch loan of concern is secured by a 272 unit apartment complex located in Wilsonville, OR. The servicer reported year end (YE) 2007 was 0.97x, compared to a DSCR of 1.7x at issuance. The decline in DSCR was primarily due to the increase in operating expenses. The property is currently offering concessions to attract new tenants. As of the end of June 2008, occupancy rate was 93%, compared to 97% at issuance.

The second largest Fitch loan of concern is secured by a 60,000 SF retail center in Murray, UT. One of two original tenants, Staples, which occupied 39% of the center, vacated its space in 2002 and sublet the space to a home furnishing store. Staples will continue to pay the rent until their lease expires in July 2013. The other tenant, Linens 'N' Things, vacated the space in August 2008 due to bankruptcy filing. The borrower is actively marketing the space. The servicer reported YE07 DSCR was 1.63x, compared to 1.36x at issuance.

The largest remaining loan (11.9%) is secured by an office property in Sunnyvale, CA. It is currently 100% occupied by a single tenant.

Thirty-seven loans (31.9%) are scheduled to mature in 2008, six of which (3%) have already passed their maturity date. Five loans (11.9% of the pool) are fully or partially defeased. The coupon on the 22 non-defeased loans ranges from 5.83% to 7.84% with the weighted average (WA) coupon at 6.62%. The servicer reported YE07 DSCR ranges from 0.16x to 3.31x with the WADSCR at 1.63x.

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