Moody's Downgrades LB CMBS Classes

Two classes of LB Commercial Mortgage Trust commercial mortgage pass-through certificates, series 1998-C4, have been downgraded by Moody's Investors Service.Class L was downgraded from B3 to Caa1, and class M was downgraded from Caa2 to Caa3. Moody's also affirmed the ratings of 13 other classes in the deal. The downgrades were attributed to the erosion of cash flows from certain underlying assets. The rating agency said the certificates are collateralized by 285 loans secured by 327 commercial and multifamily properties, and the transaction consists of three collateral components: a conduit (61.8%), large loans (34.4%), and credit tenant leases (3.8%). Five loans with a total balance of $243.7 million (12.6%) are in special servicing, Moody's said. The largest, the $230.8 million TRT Holdings Loan, was transferred to special servicing due to noncompliance with the terrorism insurance requirement, but the recently signed Terrorism Risk Insurance Act is expected to help resolve the issue, Moody's said. The special servicer has estimated that the remaining four have aggregate losses of $2.6 million. Moody's can be found online at http://www.moodys.com.