Fitch Upgrades One Distressed Class of MSC 1999-CAM1

CHICAGO--()--Fitch Ratings has upgraded one and affirmed two classes of Morgan Stanley Capital I Trust 1999-CAM1 (MSC 1999-CAM1). A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The upgrade of class L is a result of high credit enhancement, continued expected pay down, as well as stable performance of the underlying collateral. As of the May 2015 distribution date, the pool balance has been reduced by 99% to $9.7 million from $806.5 million at issuance. Thirteen of the original 152 loans remain. There are no defeased loans and eight loans totaling 27.5% of the pool are fully amortizing. There are eight loans (47.7%) which are single-tenanted retail properties. Maturity dates are in 2015 (13.2%), 2016 (8.6%), 2017 (14%) and 2018 (23.1%). Classes M through O have prior incurred unpaid interest shortfalls. There are no delinquent or specially serviced loans.

The largest loan (18.5%) is secured by a 79,038 square foot (sf) medical office property located in Fairfax, VA. Occupancy has continually declined since issuance. As of year-end 2014, occupancy was 78%, compared to 87% in 2012 and 95% at issuance; however, a slight improvement since 76% at year-end 2013. The property is occupied mostly by doctors and medically-related tenants as it is located by the Inova Fair Oaks Hospital. Although occupancy has declined, the loan's debt service coverage ratio remains high at 2.67x as of year-end 2014.

RATINGS SENSITIVITIES

The Rating Outlook on class L remains Stable as credit enhancement is expected to continue to improve and there is a high likelihood of full payoff. Further upgrades were not considered due to the concentration of single-tenant, or two-tenant retail properties, several of which have tenants with lease expirations before loan maturity. These include the second (19.2%) and third (12.3%) largest loans, and total 48% of the pool. Given the high credit enhancement of class L and lack of specially serviced or default loans, downgrades to the class are not expected. Downgrades to class M are possible if the class incurs realized losses.

Fitch has upgraded the following class:

--$3.4 million class L to 'BBBsf' from 'BB-sf'; Outlook Stable.

In addition, Fitch has affirmed the following classes:

--$6 million class M at 'Csf'; RE 90%;

--$0.3 million class N at 'Dsf'; RE 0%.

Classes A-1 through K have paid in full. Fitch does not rate class O. Fitch previously withdrew its rating on the interest-only class X.

Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 10, 2014 report, 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is available at 'www.fitchratings.com' under the following headers:

Structured Finance then CMBS then Criteria Reports

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=985039

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Contacts

Fitch Ratings
Primary Analyst
Britt Johnson
Senior Director
+1-312-606-2341
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Committee Chairperson
Mary MacNeill
Managing Director
+1-212-908-0785
or
Media Relations:
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Britt Johnson
Senior Director
+1-312-606-2341
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Committee Chairperson
Mary MacNeill
Managing Director
+1-212-908-0785
or
Media Relations:
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com