Marriott CMBS Classes Downgraded

Two classes of Host Marriott Pool Trust commercial mortgage pass-through certificates, series 1999-HMT, have been downgraded by Moody's Investors Service.Class F was downgraded from Baa2 to Baa3, and class G was downgraded from Baa3 to Ba1, Moody's said. Five other classes in the deal were affirmed. The certificates represent beneficial interests in a trust fund whose principal asset is a mortgage loan secured by eight hotels in six states, including the New York Marriott Marquis in Manhattan, which represents 40.9% of the pool balance. As of the Dec. 4 distribution date, the transaction's principal balance had decreased by 8.2% to $610.4 million as a result of amortization on a 20-year schedule, the rating agency said. Under a cash-trapping provision of the loan, all excess cash flow is trapped and held by the servicer in the event that "base profit" falls below $96.0 million. The provision is now in effect, and $7.4 million is being held as additional cash collateral, Moody's said. The rating agency expressed concern about "the relatively low debt service coverage of 1.26x" for the transaction and said it will "closely monitor" the performance of the hotels.