Fitch Ratings upgrades Prudential Securities Secured Financing Corp.'s (Prudential) commercial mortgage pass-through certificates, series 1999-NRF1, as follows:
-- $13.9 million class E to 'AAA' from 'AA+';
-- $20.9 million class F to 'AA' from 'A+';
-- $25.5 million class G to 'BBB+' from 'BBB';
-- $9.3 million class H to 'BBB' from 'BB+';
-- $9.3 million class J to 'BB+' from 'BB'.
In addition, Fitch affirms the following classes:
-- $375.8 million class A-2 at 'AAA';
-- Interest-only class A-EC at 'AAA';
-- $51.1 million class B at 'AAA';
-- $46.4 million class C at 'AAA';
-- $46.4 million class D at 'AAA'
Fitch does not rate the $15.8 million class K, $6.5 million class L, or $7.8 million class M certificates. The A-1 certificates have paid in full.
The upgrades are the result of paydown and defeasance since issuance. As of the August 2006 distribution date, the pool has paid down 32.3% to $628.9 million from $928.9 million at issuance. In addition, 11 loans, 10.3% of the pool, have defeased.
Fitch identified 40 Loans of Concern (13.5%). These include the three specially serviced loans (0.5%) and loans with low debt service coverage ratios (DSCR) and occupancies, as well as other performance issues. While the percentage of Fitch Loans of Concern is relatively high compared to similar seasoned conduit transactions, the upgrades are warranted given the paydown and defeasance.