The bonds are secured by 37 cross-collateralized and crossed-defaulted mortgage loans on 35 self-storage properties and two business parks. The properties are located in Arizona (30% by allocated loan amount), California (19%), Colorado (18%), Texas (12%), Utah (11%) and New Mexico (10%) and are managed by National Self Storage Management, Inc. (NSS).
As of the April 2003 distribution date, the pool's aggregate principal balance has decreased by 17% to $44.8 million due to amortization. The pool's borrower-reported net operating income adjusted for Fitch required capital expenditures for the trailing 12 months ended (TTM) March 31, 2003 has increased approximately 12% from origination and 2% from the TTM Dec. 31, 2002. Average occupancy for TTM Dec. 31, 2002 was 85.4% compared to 86.2% at issuance and 84.9% from the previous year. The improved performance is due to several factors including maximizing rental income, controlling expenses, increasing marketing efforts and improving the curb appeal of the facilities. The transaction's current overall Fitch stressed debt service coverage ratio has increased to 2.11 times (x) compared to 1.60x at issuance and 1.98x as of the TTM Dec. 31, 2002.
Fitch will continue to monitor this transaction, as surveillance is ongoing.