OREANDA-NEWS. Fitch Ratings has upgraded one class and affirmed two classes of Lehman Brothers (LB) Commercial Mortgage Trust's commercial mortgage pass-through certificates series 1998-C1. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrade to class J reflects the class's increasing credit enhancement from loan payoffs and continuing amortization (64.1% of the pool is fully amortizing); as well as the percentage of defeased collateral (14.8%). The portfolio is concentrated with only 16 loans remaining; the largest loan comprises 35.9% of the collateral. There are limited near-term maturities (68.2% matures between 2021 and 2023).

While the credit enhancement to class J is high relative to modeled expected loss, Fitch capped the ratings based on the pool's concentration. Fitch designated one Fitch Loan of Concern (19.5%). There are no specially serviced loans. Interest shortfalls are currently affecting the distressed classes K through M.

As of the April 2016 distribution date, the pool's aggregate principal balance has been reduced by 98.7% to $22 million from $1.73 billion at issuance. Fitch modeled losses of 4.3% of the remaining pool; expected losses on the original pool balance total 3.2%, including $53.4 million (3.1% of the original pool balance) in realized losses to date.

The largest loan in the pool is a multifamily property located in Largo, FL (35.9%). The property caters to residents 55 and over. The most recent servicer reported Debt Service Coverage Ratio (DSCR) and occupancy are 1.89x and 93.3%, respectively as of year-end (YE) 2015. The second largest loan (19.5%) is also a multifamily property, primarily student housing, located in Greenville, NC. Fitch considers this a Loan of Concern as DSCR has remained low at a reported 1.03x as of YE 2015.

RATING SENSITIVITIES

The Rating Outlook on class J remains Stable as no rating changes are anticipated at this time. Further upgrades should be limited due to the concentrated nature of the pool. Downgrades are possible should pool performance decline or further losses be realized.

DUE DILIGENCE USAGE

No third-party due diligence was provided or reviewed in relation to this rating action.

Fitch has upgraded the following class:
--$10.6 million class J to 'Asf' from 'BBBsf'; Outlook Stable.

Fitch has affirmed the following classes:
--$11.4 million class K at 'Dsf'; RE 35%;
--$0 class L at 'Dsf'; RE 0%;

Classes A-1, A-2, A-3, B, C, D, E, F, G and H were paid in full.