Fitch Upgrades GFCM 2003-1

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has upgraded four classes and affirmed six classes of General Electric Capital Assurance Company (GFCM) commercial mortgage pass-through certificates series 2003-1. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrades are due to the stable performance of the remaining pool and continued expected pay down, with 87.2% of the remaining pool fully amortizing. Fitch modeled losses of 4.5% of the remaining pool; expected losses on the original pool balance total 1.4%, including $2.9 million (0.4% of the original pool balance) in realized losses to date. Fitch has designated 13 (12.4%) Fitch Loans of Concern; 80 of the original 171 loans remain. There are no loans in special servicing and none are defeased. The remaining loans are low leveraged with the Fitch Loan to Value for the remaining pool at 46.1%.

As of the June 2015 distribution date, the pool's aggregate principal balance has been reduced by 77.8% to $182.7 million from $822.6 million at issuance. Interest shortfalls are currently affecting classes H through J. Loan maturities are as follows: 3.2% between 2015 and 2017, 11% in 2018, 5.5% in 2019, with the majority of the loans maturing in 2023.

The largest loan in the pool (8.4%) is Gateway Center I, which is cross-collateralized with Gateway Center II, currently the seventh largest loan in the pool. Gateway Center I is secured by a 259,759 square foot (sf) anchored retail center in Patchogue, NY. While the servicer reported occupancy was 97.0% as of year-end (YE) 2013; this property faces potential near-term rollover. The second largest tenant, Best Buy (19.3% of NRA), was scheduled to expire in 2014. Fitch inquired with the servicer as to terms of an extension or renewal and is awaiting a response. The tenant remains in occupancy.

Gateway Center II (3.2%), the largest Fitch Loan of Concern, is an adjacent retail property secured by a 79,760 sf property also in Patchogue, NY. This property experienced significant rollover in early 2014, as its largest tenant, grocery store King Kullen (62.4% of NRA), vacated at its lease expiration. Fitch requested a leasing status update and is awaiting a response.

RATING SENSITIVITIES

Rating Outlooks on classes A-4 through F remain Stable due to continued paydown. While the pool is lowly levered and no loans are special servicing, further upgrades were limited due to lack of current financials (YE 2013 financials were provided for 80% of the pool). While not considered likely, classes could be downgraded if expected losses increase.

DUE DILIGENCE USAGE

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

Fitch has affirmed the following classes:

--$3.0 million class A-4 at 'AAAsf'; Outlook Stable;

--$112.7 million class A-5 at 'AAAsf'; Outlook Stable;

--$11.3 million class B at 'AAAsf'; Outlook Stable;

--$7.2 million class G at 'Csf'; RE 75%.

--$1.2 million class H at 'Dsf'; RE 0%;

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

Fitch has upgraded the following classes:

--$13.4 million class C to 'AAsf' from 'A+sf'; Outlook Stable;

--$11.3 million class D to 'Asf' from 'BBBsf'; Outlook Stable;

--$10.3 million class E to 'BBBsf' from 'BBB-sf'; Outlook Stable;

--$12.3 million class F to 'B' from 'B-sf'; Outlook to Stable.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Global Structured Finance Rating Criteria (pub. 31 Mar 2015)

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

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

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

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=986664

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=986664

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/20150618006406/en/

Fitch Ratings
Tiffany Pierce, +1-212-908-9107
Associate Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Mary MacNeill, +1-212-908-0785
Managing Director
or
Media Relations, New York
Sandro Scenga, +1-212-908-0278
[email protected]

Source: Fitch Ratings

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