Kmart-Linked Pass-Thrus Downgraded

Six classes of CNC's series 1994-1 pass-through certificates, secured in part by Kmart Corp. leases, have been downgraded by Fitch Ratings and removed from Rating Watch Negative.Classes A-1, A-2, and A-3 were downgraded from BB-plus to BB-minus; class B from CCC to CC; class C from CC to C; and class D from CC to C. Fitch attributed the downgrades to "further deterioration in the credit ratings of the largest tenant concentration, Kmart, which comprises 51% of the pool, as well as limited information on the underlying collateral." The rating agency said it withdrew the corporate ratings of the bankrupt retailer in March and "will closely monitor Kmart's decision to affirm or reject any more leases, and the further effect that decision may have on this transaction."