Fitch Affs Macerich SCG Funding Comm Mtge P-T Ctfs, Ser 1996-C1

Business Wire, Oct 14, 2002

Business Editors

NEW YORK--(BUSINESS WIRE)--Oct. 14, 2002

Fitch Ratings affirms Macerich SCG Funding Commercial Mortgage Backed Securities, Series 1996-C1 certificates as follows: the $91.6 million class A at 'AA ', the $11.7 million class B at 'A ', and the $14.2 million class C at 'BBB '. Classes A and B were privately placed pursuant to Rule 144A under the Securities Act of 1933. The affirmation follows Fitch 's annual review of the transaction, which closed in April 1996.

The certificates evidence beneficial ownership interests in a trust, consisting primarily of a single $117.5 million first lien on three super-regional shopping centers: The Center at Salisbury (Salisbury, MD), Crossroads Mall (Oklahoma City, OK), and Green Tree Mall (Clarksville, IN). The malls have a total area of approximately 2.8 million square feet and are managed by the Macerich Company, a publicly traded Real Estate Investment Trust (REIT).

Fitch net cash flow for the trailing twelve months ended June 30, 2002, adjusted for capital expenditures and leasing costs, is down slightly from last year. Fitch used a 9.33% constant to calculate the Fitch stressed debt service. The resulting debt service coverage ratio (DSCR) during the same period was a 1.67 times (x) compared to 1.71x in 2000 and a 1.45x at issuance. Sales for 2001 at the Center at Salisbury and the Green Tree Mall continued to show an improvement since issuance and when compared to 2000. 2001 sales at the Crossroads Mall slightly declined compared to 2000, but were still above that at issuance. Fitch is concerned that the occupancy for the malls has declined. As of June 2002, both Salisbury and Crossroads had occupancies below 90% due primarily to a dark Montgomery Ward at each mall, and Green Tree remained stable at 95% compared to YE 2001.

Other concerns noted during Fitch's review include the Montgomery Ward and movie theater exposure. Both the Salisbury and Crossroads have dark Montgomery Wards anchors and Auto Centers. Macerich has secured Goodyear to take over the Auto Center space at the Salisbury location and is in negotiations with other tenants to take over the vacant anchor space and Auto Center at the Crossroads Mall. All three centers have movie theater exposure either at the mall or nearby, but only two malls have theaters that serve as part of the transaction's collateral. All of the theatres are currently open and operating. YE 2001 sales at the theatres have slightly increased compared to last year.

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