S&P Eyeing Allegheny-Linked CMBS

Standard & Poor's, New York, has placed seven tranches of Merrill Lynch Mortgage Investors Inc. Commercial Mortgage Pass-Through Certificates, Series 1998-C1-CTL on CreditWatch with negative implications.Classes A-1, A-2, A-3, B, C, D, and E are affected by the action. (Moody's Investors Service has placed nine classes from the series under review for possible downgrade.) The action followed the downgrade of Allegheny General Hospital in Pennsylvania from A to B and Graduate Health Systems Obligated Group (now Allegheny Centennial Hospital) from BB to CCC, both of which remain on CreditWatch with negative implications. The affected pass-through certificates total $570.3 million and are secured by credit tenant leases from 105 mortgage loans, S&P said. Allegheny General is a lease guarantor for two mortgages totaling $102.5 million, about 15.9% of the pool. S&P said it is evaluating the status of the construction, the escrow account balance, the implication of the credit downgrades, and the possibility of a lease default. S&P's website address is http://www.ratings.standardpoor.com.