Fitch Upgrades 1 Class of DLJ 1999-CG3

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has upgraded one and affirmed five classes of DLJ Commercial Mortgage Corporation commercial mortgage pass-through certificates series 1999-CG3. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The upgrade is due to high credit enhancement as a result of continued paydown, including defeasance sufficient to pay down the majority of the class. There are only four loans remaining, including one defeased loan (29.3% of the pool). Expected losses on the original pool balance total 5.2%, including $46.7 million in realized losses to date.

As of the December 2015 distribution date, the pool's aggregate principal balance has been reduced by 98.7% to $11.6 million from $899.3 million at issuance. Interest shortfalls are currently affecting classes B-5 through D.

The Loan of Concern is the Whitfield Village Apartments loan (11.2% of the pool), secured by four 2-story and one 1-story buildings that consist of 48 2-bedroom/2-bathroom, Class C, multifamily units located in Sarasota, FL (55 miles south of Tampa). The Borrower filed for Chapter 11 Bankruptcy in March 2013. The loan was modified effective Jan. 1, 2015 and modification terms include an interest rate reduction to 5.25% from 8.58%, maturity extension to Dec. 1, 2024 from July 1, 2019; and prepayment allowed in whole or in part on any payment date without penalty. The loan was returned to the master servicer in April 2015. As of October 2015, the property was 96% occupied. The most recent debt-service coverage ratio (DSCR) as of year-end (YE) 2014 was 1.14x.

The largest loan in the pool (51.3%) is secured by the Regency Apartments, a 186-unit multifamily property located in Fayetteville, NC. The property was built in 1996. The amenities include a pool, clubhouse, playground, and tennis and volleyball courts. As per the servicer reporting the property's occupancy has improved to 93% as of September 2015, compared to 87% as of December 2014.

RATING SENSITIVITIES

The Rating Outlook on class B-4 remains Stable due to increasing credit enhancement and continued paydown. Although credit enhancement is high and a significant amount of the class is covered by defeasance, upgrades are not likely as risk remains for interest shortfalls to reappear, and the remaining pool is concentrated. All of the remaining loans are multifamily loans with maturities in 2023, 2024 and 2028.

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

Fitch upgrades the following class as indicated:

--$4.4 million class B-4 to 'Asf' from 'BBsf'; Outlook Stable.

Fitch affirms the following classes and revises recovery estimates as indicated:

--$7.3 million class B-5 at 'Dsf'; RE 100%;

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

--$0 class B-7 at 'Dsf'; RE 0%;

--$0 class B-8 at 'Dsf'; RE 0%;

--$0 class C at 'Dsf'; RE 0%.

The class A-1A, A-1B, A-1C, A-2, A-3, A-4, A-5, B-1, B-2 and B-3 certificates have paid in full. Fitch does not rate the class D certificates. Fitch previously withdrew the rating on the interest-only class S certificates.

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=997544

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=997544

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/20160106006568/en/

Fitch Ratings
Primary Analyst
Catherine Barbieri
Associate Director
+1-212-908-0638
Fitch Ratings, Inc.
33 Whitehall Street
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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