S&P Eyes Shiloh-Linked CMBS Classes

The ratings on seven classes from three commercial mortgage-backed securities deals containing loans secured by Shiloh Inn lodging properties have been placed on CreditWatch with negative implications by Standard & Poor's.The affected classes are as follows: classes E, F, and G of Merrill Lynch Mortgage Investors Inc. pass-through certificates, series 1996-C2 and series 1997-C1; and class E of Commercial Mortgage Acceptance Corp. commercial mortgage pass-through certificates, series 1997-ML1. S&P said the Shiloh loans have been delinquent for more than two years, during which the borrowers filed for bankruptcy. A settlement was reached with Criimi Mae Services LP, the special servicer, to modify the loans and return them to performing status, the rating agency said. "The settlement calls for, among other things, the creation of an 'A' and 'B' note, where the A note balance will approximate the outstanding principal balance of the loan, and the B note will represent the outstanding advances due to the trust through the modification date," S&P said. The certificates will remain on CreditWatch until the "ultimate impact" of the Shiloh modifications on trust cash flows can be determined, S&P said. The rating agency can be found online at http://www.standardandpoors.com.