2008-07-23 04:14:07 -

- Fitch Ratings upgrades two classes of Bear Stearns Commercial Mortgage Securities Corporation's commercial mortgage pass-through certificates, series 1998-C1, as follows:

--$8.9 million class E to 'AAA' from 'AA-';

--$12.5 million class F to 'A' from 'A-'.

In addition, Fitch affirms the following classes:

--$21.4 million class A-2 at 'AAA';

--Interest-only class X at 'AAA';

--$35.7 million class B at 'AAA';

--$32.2 million class C at 'AAA';

--$32.2 million class D at 'AAA';

--$5.4 million class H at 'BB+'.

Fitch does not rate classes G or I. Classes J and K have been reduced to zero due to realized losses. Class A-1 has paid in full.

The upgrades reflect increased credit enhancement levels due to the repayment of 58 loans, the liquidation of two loans, and scheduled amortization that have occurred since the last Fitch rating action (43.2%). As of the July 2008 distribution date, the pool has been reduced by 75% to $177.9 million from $714.7 million at issuance. Of the remaining loans, nine (26.4%) have defeased.

Currently, four loans (9.9%) are in special servicing. The largest specially serviced loan (5.3%) was transferred in February 2008 due to payment default. The loan is secured by a 295,974 square foot (sf) retail center located in Lincoln Park, MI, a suburb of Detroit. The center is currently 60% occupied, and the special servicer is pursuing foreclosure. Fitch expects that losses corresponding to this loan will be absorbed by the unrated class I.

The remaining three loans (4.6%) were transferred to special servicing at their maturity dates, due to the inability to their respective borrowers to pay off each loan. Fitch does not expect losses at this time.

Excluding the specially serviced loans, no additional loans are scheduled to mature in 2008. One loan, representing 1.3% of the pool, has a scheduled maturity in 2009; its interest rate is 7.62%, and it has a servicer-reported year-end 2007 debt service coverage ratio (DSCR) of 1.29 times (x). No additional maturities are scheduled to occur until 2012.

Fitch notes that of the remaining non-defeased loans, nine (59%) are secured by properties located in California. For loans in the California concentration, the weighted average servicer-reported DSCR is 2.36x, and the weighted average Fitch loan-to-value ratio is 47.0%. The current ratings reflect the risk associated with the geographic concentration.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 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 Ratings
Lindsay Weichert, 212-908-0398, New York
Britt Johnson, 312-606-2341, Chicago
or
Media Relations:
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