Fitch Affirms Penn Mutual 1996-PML; Assigns Outlooks

2009-01-23 22:33:02 -

Fitch Ratings affirms and assigns Outlooks to the Penn Mutual Life Insurance Company's (Penn Mutual) commercial mortgage pass-through certificates, series 1996-PML, as follows:


--Interest-only class X-1 at 'AAA'; Outlook Stable


--Interest-only class X-2 at 'AAA'; Outlook Stable


--$156,943 class P at 'AAA'; Outlook Stable'


--$4.7 million class M at 'AA+'; Outlook Stable'.

Fitch does not rate the $12.4 million class N certificates. The class A through L certificates have been paid in full.


Although there has been an increase in subordination levels resulting from loan payoffs and amortization, affirmations are warranted given the increased concentration. As of the August 2007 distribution date, the pool has paid down 97.8% to $17 million from $781.6 million at issuance. Of the original 216 loans, 10 loans remain outstanding. The remaining loans were originated between 1988 and 1995 and have a strong payment history and benefit from low leverage. In addition, there are currently no delinquent or specially serviced loans and no Fitch loans of concern.


Of the 10 loans remaining in the pool, only one (9.5%) remains locked out from prepayment. All other loans are free to prepay with applicable prepayment penalty or yield maintenance charges. The weighted average interest rate is 8.61% and maturity concentrations are: 2011 (19.8%); 2012 (22.7%); 2013 (5.4%); 2014 (24.0%); 2015 (8.3%); and 2016 (18.9%). The servicer reported weighted average debt service coverage ratio (DSCR) for year ending 2007 is 1.78 times.


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