Fitch Upgrades Nationslink Funding Corp 1999-LTL-1

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has upgraded one class and affirmed the remaining rated class of NationsLink Funding Corp., series 1999-LTL-1 commercial loan pass-through certificates. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The upgrade reflects paydown, stable asset performance, amortization and high credit enhancement.

As of the February 2014 distribution date, the pool's certificate balance has been reduced by 77.79% (to $109.4 million from $492.5 million). Of the original 128 loans, 71 remain. Fitch modeled losses of 2.13% for the remaining pool; expected losses as a percentage of the original pool balance are at 0.63%, including losses already incurred to date (0.25%). Fitch has designated 10 loans (12.3% of the pool) as Loans of Concern. They include six loans (3.5%) where the properties are vacant. However, the credit tenants continue to pay rent per the current lease terms. There are no loans in special servicing.

Of the remaining 71 loans, 65 (82.3% of the pool) are credit tenant lease (CTL) loans backed by properties with leases guaranteed by one of more than 15 different credit tenants. Approximately 50% of the loans in the pool have investment-grade-rated tenants. The CTL loans fully amortize and the majority of the underlying leases are co-terminus with maturity or longer than the loan terms. The majority of loans mature in 2017 and 2018.

The top three tenants in the pool are Royal Ahold N.V. (26.2%; rated investment grade), Rite Aid Corporation (21.30% of the pool; rated 'B-' with a Stable Outlook as of November 2013), and Walgreen (4.95%; rated 'A-' with a Stable Outlook as of November 2013). There are six traditional conduit loans, which make up 17.7% of the pool. No loans are currently defeased.

The largest loan of the pool is collateralized by Broadway at the Beach (12.27% of the pool). The subject is a 511,396 square foot (sf) retail outdoor mall located in Myrtle Beach, SC. Occupancy has increased to 96% from 93% at issuance. Several leases including Celebrations and Hard Rock Cafe, 44% of the net rentable area (NRA), are scheduled to expire within the next 18 months. The rollover risk is mitigated by the low leverage and fully amortizing structure of the loan. In addition, the mall's nearest competitor is 10 miles away and does not include the complementary retail tenants. The loan is scheduled to mature in August 2018.

The second largest conduit loan is collateralized by Plaza Galleria (2.02%), a 15,846 sf retail center located in the Old Town Plaza area of Santa Fe, NM. The center was redeveloped in 1995 and has been kept in fair condition by the sponsor. The area draws the majority of its economic activity from the seasonal tourist visitors that frequent the historic submarket. Occupancy has decreased to 66% from 100% at issuance and the center has a large percentage of remaining tenants on month to month leases. The loan is current and the sponsor continues to work to release the vacant space and attract new tenants to the center. The loan is scheduled to mature in June 2018.

RATING SENSITIVITIES

Outlooks on classes B and C are Stable as affirmations are expected. Class B is expected to pay in full within 12 months. While credit enhancement for class C is expected to continue to increase, the pool is concentrated with single-tenant retail properties. In addition, the master servicer is not required to provide information, including financial reporting and detailed information on tenant leases on a regular basis for a majority of the loans in the pool.

Fitch upgrades the following class:

--$11.1 million class B to 'AAAsf' from 'AAsf', Outlook Stable.

Fitch affirms the following class:

--$20.9 million class C at 'Asf'; Outlook Stable.

Classes A-1, A-2, and A-3 have repaid in full. Classes D, E, F, and G are not rated by Fitch. The rating for Class X was previously withdrawn.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 24, 2013);

--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 11, 2013).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

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=980840

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Fitch Ratings
Primary Analyst:
Jay Bullie
Associate Director
+1-312-368-2079
Fitch Ratings, Inc.,
70 W. Madison,
Chicago, IL 60602
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

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Lone Star Funds Acquires Multi-Family Residential Portfolio in Central Tokyo
• Wuyi County Highlights Industrial R&D Strength as Local Motorcycle Enterprise Wins Taklimakan Rally Champion Title
• Global EV Transition Continues to Drive Interest as ELEKTROS Advances Its Vision for Lithium, Critical Minerals and Charging Innovation