Fitch Upgrades 1 Class of GSMS 1998-C1

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has upgraded one class and affirmed two classes of GS Mortgage Securities Corporation II commercial mortgage pass-through certificates series 1998-C1. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrade of class G reflects increased credit enhancement from paydown and defeasance. The pool is highly concentrated with only 32 loans remaining, 15 of which are fully defeased (50.2% of the pool). All of the remaining loans are fully amortizing, with the majority scheduled to mature in 2018 (83.8%). Fitch has identified five Fitch Loans of Concern (25.4%). All loans are current and none are in special servicing.

As of the March 2015 distribution date, the pool's aggregate principal balance has been reduced by 98.4% to $30 million from $1.86 billion at issuance. The pool has experienced $89.1 million (4.79% of the original pool balance) in realized losses to date. Interest shortfalls are affecting classes H through K.

The largest loan in the pool is the Willow Run Business Center (18.4%), which is secured by a 1.75 million square foot industrial building in Ypsilanti, MI. The December 2014 rent roll reported occupancy at 100%. The properties largest tenant is General Motors Corp., which occupies 91% of the net rentable area and has a lease expiration of August 2016. The net operating income debt service coverage ratio (DSCR) reported at 1.70x as of third quarter 2014. The loan remains current as of the March 2015 remittance, and is scheduled to mature on Jan. 1, 2018.

RATING SENSITIVITIES

The Rating Outlook on class G is Stable, reflecting Fitch's expectation of future affirmations. Although the class is fully covered by defeased collateral, the class has previously incurred interest shortfalls. Fitch will not assign or maintain 'AAAsf' or 'AAsf' ratings for notes that it believes have a high level of vulnerability to interest shortfalls or deferrals, even if permitted under the terms of the documents (see 'Criteria for Rating Caps and Limitations in Global Structured Finance Transactions', dated May 28, 2014, for more details). Classes H and J have realized losses and will remain at 'D'.

Fitch upgrades the following class:

--$2.8 million class G to 'Asf' from 'BBBsf'; Outlook Stable.

Fitch also affirms the following classes:

--$27.2 million class H at 'Dsf'; RE 65%;

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

The class A-1, A-2, A-3, B, C, D, and E certificates have paid in full. Class F, which is not rated by Fitch also paid in full. Fitch also does not rate the class K certificate. Fitch previously withdrew the rating on the interest-only class X certificates.

Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 10, 2014 report, 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is available at 'www.fitchratings.com' under the following headers:

Structured Finance then CMBS then Criteria Reports

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

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (March 31, 2015);

--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 10, 2014);

--'Criteria for Rating Caps and Limitations in Global Structured Finance Transactions' (May 28, 2014).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864268

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608

Criteria for Rating Caps and Limitations in Global Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748781

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=982745

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
Benson Thomas
Director
+1 212-908-0645
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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