Fitch Upgrades 4 Classes of GMAC Commercial Mortgage Securities, Inc., 2003-C2; Assigns Outlooks

2008-11-08 14:48:06 -

- Fitch Ratings upgrades and assigns Rating Outlooks to GMAC Commercial Mortgage Securities, Inc.'s (GMACCM) commercial mortgage pass-through certificates, series 2003-C2, as follows:

--$21 million class F to 'AAA' from 'AA+'; Outlook Stable;

--$11.3 million class G to 'AA+' from 'AA'; Outlook Stable;

--$16.1 million class H to 'A+' from 'A'; Outlook Stable;

--$21 million class J at to 'A-' from 'BBB+'; Outlook Stable;

In addition, Fitch affirms and assigns Rating Outlooks to the following classes:

--$201.6 million class A-1 at 'AAA'; Outlook Stable;

--$471.6 million class A-2 at 'AAA'; Outlook Stable;

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

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

--$40.3 million class B at 'AAA'; Outlook Stable;

--$16.1 million class C at 'AAA'; Outlook Stable;

--$30.7 million class D at 'AAA'; Outlook Stable;

--$16.1 million class E at 'AAA'; Outlook Stable;

--$8.1 million class K at 'BBB'; Outlook Stable;

--$8.1 million class L at 'BBB-'; Outlook Stable;

--$9.7 million class M at 'B+'; Outlook Stable;

--$4.8 million class N at 'B'; Outlook Stable;

--$4.8 million class O at 'B-'; Outlook Stable.

Fitch does not rate the $16.8 million class P certificates.

The rating upgrades reflect the increased subordination due to scheduled amortization and paydown of 7.6% since Fitch's last rating action. The Rating Outlooks reflect the likely direction of any rating changes over the next one to two years.

As of the October 2008 distribution date, the pool has paid down 30.4% to $898 million from $1.29 billion at issuance. In total 23 loans (37%) have defeased, including four (16%) of the top 10 loans in the pool. There are currently no specially serviced or delinquent loans.

Fitch has identified six Fitch loans of concern (5.4%). The largest Fitch loan of concern (2.2%) is secured by two office properties in Maryland and a mixed-use and retail property in Washington D.C., representing a total of 407,753 square feet (sf). Combined occupancy as of first quarter 2008 was 55%. The loan has a coupon of 6.6% and matures in 2013.

The second largest Fitch loan of concern (1.4%) is secured by a 162,356 sf retail center in Roseville, MN. According to the borrower, the property has suffered from an increase in expenses. The loan's maturity is June 1, 2013 with a rate of 5.2%. No other Fitch loan of concern represents more than 1.0% of the pool.

Of the three shadow rated loans at issuance, the John Hancock Tower and the DDR Portfolio have paid in full. The Boulevard Mall loan (4.9%) is secured by a 1.2 million sf regional mall in Las Vegas, Nevada, of which 587,170 sf represents collateral. The A note has been divided into two pari-passu notes, one of which is included in the trust ($44.2 million). Total occupancy was 98.7% as of December 2007, up from 92.6% at issuance. The loan, which matures in 2013, has a coupon of 4.27%. Though collateral performance has been stable to date, Fitch is concerned about weakening fundamentals in the Las Vegas retail market as well as the declining financial condition of the mall's operator and the loan sponsor, General Growth Properties. Fitch will continue to monitor the loan.

Only 0.20% of the non-defeased loans are scheduled to mature in 2008 and no loans are scheduled to mature in 2009. The weighted average coupon for the non-defeased loans is 5.53% and the range is 4.27% to 6.60%.

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.

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