Fitch Affirms DLJ 1998-CF2

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed two classes of DLJ Commercial Mortgage Corporation's commercial mortgage pass-through certificates, series 1998-CF2. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The affirmations are due to the relatively stable performance of the remaining pool and reflect the pool's high concentration (15 loans remaining).

As of the April 2016 distribution date, the pool's aggregate principal balance has been reduced by 99% to $11.4 million from $1.11 billion at issuance. Approximately 87.5% of the pool is fully amortizing. Two loans (21.9% of the pool) are defeased, and no loans are in special servicing. Fitch has designated four Fitch Loans of Concern (46.1%).

The largest loan in the pool and largest Fitch Loan of Concern is collateralized by a 224-unit multifamily property located in Savannah, GA (27.2%). As of year-end (YE) 2015, the property was 94.4% occupied, slightly down from 96.1% at YE 2014. The servicer-reported debt service coverage ratio (DSCR) decreased to 1.01x from 1.34x during the same period due to increased operating expenses. The largest driver, repairs and maintenance, increased approximately 40%. Per the master servicer, maintenance requirements were greater than normal in efforts to improve the property's aged condition and are expected to continue for several years.

Two of the three remaining Fitch Loans of Concern are each secured by a Super 8 hotel located in Albuquerque, NM (15.5%). The servicer-reported DSCR was well below 1.0x for each property as of the trailing 12 month period ended Sept. 30, 2015. The remaining Fitch Loan of Concern is collateralized 102,067-sf retail property located in El Paso, TX (3.4%). The property was 97.2% occupied as of YE 2015 with a servicer-reported DSCR of 1.23x. K-Mart is largest tenant occupying 85.4% of total space. While the tenant's lease expires in Nov. 2017, the servicer indicated K-Mart will be vacating in July. The loan is fully amortizing, with an expected exposure of $1.33 per square foot at its October 2016 scheduled maturity date.

RATING SENSITIVITIES

The Negative Outlook for class B-5 reflects the pool's concentration which includes three economy hotels in Albuquerque, NM (18%) with limited updated operating performance and six single tenant properties (25.6%). Class B-5 could be downgraded if expected losses increase. Upgrades are unlikely due to limited credit enhancement.

DUE DILIGENCE USAGE

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

Fitch has affirmed the following classes:

--$10 million class B-5 at 'BB+sf'; Outlook Negative;

--$1.4 million class B-6 at 'Dsf'; RE 0%.

Classes A-1A through B-4 have paid in full. Fitch does not rate class C. Fitch previously withdrew the rating on class S.

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=1004328

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1004328

Endorsement Policy

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

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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160511006466/en/

Fitch Ratings
Primary Analyst
Tiffany Pierce
Associate Director
+1-212-908-9107
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10004
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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