Fitch Affirms Salomon Brothers 2000-NL1 P-T Ctfs

Business Wire, March 20, 2001

Business Editors

NEW YORK--(BUSINESS WIRE)--March 20, 2001

Salomon Brothers Mortgage Securities VII, Inc.'s commercial mortgage pass-through certificates, series 2000-NL1, $46.5 million class A-1, $170.9 million class A-2, and interest-only class X certificates are affirmed at 'AAA' by Fitch. In addition, the $18.4 million class B certificates are affirmed at 'AA', $16.7 million class C at 'A', $6.7 million class D at 'A-', $15.9 million class E at 'BBB', $5.0 million class F at 'BBB-', $10.9 million class G at 'BB ', $5.8 million class H at 'BB', $4.2 million class J at 'BB-', $8.4 million class K at 'B', and $3.3 million class L at 'B-'. Fitch does not rate the $8.4 million class M certificates. The rating affirmations follow Fitch's annual review of the transaction, which closed in March 2000.

The certificates are collateralized by 67 fixed-rate mortgage loans, consisting primarily of office (33%), multifamily (23%), mixed use (15%), and retail (13%) properties. There are large geographic concentrations in California (36%), Massachusetts (18%), and Connecticut (9%). As of the February 2001 distribution date, the pool's aggregate principal balance has been reduced by approximately 4%, from $334.2 million at closing to $321.0 million. Three loans have paid off since origination. One loan (1.1%) secured by a limited-service hotel in Lexington, KY is both 90-days delinquent and in special servicing. In addition, one loan (2.4%) secured by a mixed use property in Cockeysville, MD has a vacant anchor space formerly tenanted by Safeway. The tenant, which occupies 27% of the property's net rentable square footage, continues to pay its rental obligation.

ORIX Real Estate Capital Markets, LLC, the master servicer, collected year-to-date or trailing-twelve-month 2000 financial statements for 60 loans, or 91.6% of the pool balance. According to the information provided, the 2000 weighted average debt service coverage ratio (DSCR) is 1.71 times (x), compared to the underwritten DSCR for the same loans of 1.40x. Fitch reviewed the exception report and found both five loans with missing assignments and five loans with deeds of mortgage instruments not recorded.

As part of Fitch's analysis, the loans identified as potential problems were assumed to default at various stress scenarios. The resulting subordination levels were sufficient to maintain the current ratings.

Fitch will continue to monitor this transaction, as surveillance is ongoing.