Fitch Affirms MSCI 1998-WF2

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has affirmed all five classes of Morgan Stanley Capital I Trust commercial mortgage pass-through certificates, series 1998-WF2. A detailed list of rating actions follows at the end of this report.

KEY RATING DRIVERS

The affirmations follow the stable performance of the underlying collateral. The pool has experienced 96.3% collateral reduction since issuance and 0.4% since the last rating action. There are 10 loans remaining, and no loans have repaid in the last 12 months. One loan (11.8% of the pool) is defeased and there are two loans (1.8% of the pool) on the servicer's watchlist. There are no delinquent or specially serviced loans.

1201 Pennsylvania Avenue, an office building in Washington, D.C., acts as collateral for the largest loan in the pool. Covington & Burling was previously the largest tenant, with 57.9% of the NRA leased through August 2016. The tenant moved to another building and vacated the subject earlier this year. While it is reportedly still paying rent on the space, the current occupancy has fallen to 13.5%, and another 6.1% of the NRA is scheduled to roll in 2016. The loan represents 70.8% of the pool balance and is fully amortizing, with a current debt of $63.70 per square foot (psf). The low leverage point, amortization schedule and property location help to mitigate concerns with the property's vacancy issues.

Of the outstanding loans, seven, representing 87% of the pool balance, are fully amortizing. Not including the defeased loan, the pool's weighted-average LTV and debt yield are 36.7% and 33.5%, respectively.

RATING SENSITIVITIES

The Rating Outlook for all but one class remains Stable. The pool is highly concentrated with 10 loans remaining. The largest loan represents 70.8% of the current pool balance and is 13.5% occupied following the departure of its largest tenant. Additionally, the remaining collateral is of lower quality. Nevertheless, the most senior class is fully covered by defeasance and the pool continues to amortize. Fitch has changed the Outlook on Class J to Positive as it is possible that this class may be upgraded in the future based on the pool's low leverage point and repayment schedule. Downgrades are possible if any of the remaining loans are not able to refinance at maturity or have significant performance declines.

DUE DILIGENCE USAGE

No third-party due diligence was provided or reviewed in relation to this rating action.

Fitch affirms the following classes and assigned Rating Outlooks as indicated:

--$3.4 million class H at 'AAAsf', Outlook Stable;

--$7.9 million class J at 'Asf', Outlook Positive;

--$7.9 million class K at 'BBBsf', Outlook Stable;

--$15.9 million class L at 'BBsf', Outlook Stable;

--$4.1 million class M at 'Dsf', RE 100%.

The class A-1, A-2, B, C, D, E, F and G certificates have paid in full. Fitch does not rate the class N certificate. Fitch previously withdrew the rating on the interest-only class X certificate.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

U.S. and Canadian Fixed-Rate Multiborrower CMBS Surveillance and U.S. Re-REMIC Criteria (pub. 13 Nov 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=873395

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=996500

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=996500

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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View source version on businesswire.com: http://www.businesswire.com/news/home/20151210006403/en/

Fitch Ratings
Primary Analyst
Roxanna Tangen
Associate Director
+1-312-368-3116
Fitch Ratings, Inc.
70 W. Madison St.
Chicago, IL 60606
or
Committee Chairperson
Mary MacNeill
Managing Director
+1-212-908-0785
or
Media Relations:
Sandro Scenga, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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