SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
Commission file number 333-51817-01
TRUST CREATED BY COMMERCIAL MORTGAGE ACCEPTANCE CORP.
(under a Pooling and Servicing Agreement dated
as of July 1, 1998 which Trust is the
issuer of Commercial Mortgage Pass-Through
Certificates, Series 1998-C1)
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(Exact name of Registrant as specified in its Charter)
New York 36-4243002
(State or other jurisdiction (I.R.S. Employer of
incorporation or organization) Identification No.)
LaSalle National Bank
135 South LaSalle Street, Suite 1625
Chicago, Illinois 60674-4107
(Address of Principal Executive Office)
Registrant's telephone number, including area code: (800) 246-5761
Securities registered pursuant to Section 12(b) of the Act: Not
applicable.
Securities registered pursuant to Section 12(g) of the Act: Not
applicable.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes __X__ No ____
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (section 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. (X)
Aggregate market value of the voting stock held by non-affiliates of the
registrant as of December 31, 1998: Not applicable.
Number of shares of common stock outstanding as of
December 31, 1998: Not applicable.
DOCUMENTS INCORPORATED BY REFERENCE
None.
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PART I
ITEM 1. BUSINESS
The Registrant issued Commercial Mortgage Pass-Through Certificates,
Series 1998-C1 (the "Securities") pursuant to a Pooling and Servicing Agreement
dated as of July 1, 1998 (the "Cut-off Date") among Commercial Mortgage
Acceptance Corp., as Depositor, Midland Loan Services, Inc., as Master Servicer
and Special Servicer, LaSalle National Bank, as Trustee, and ABN AMRO Bank N.V.,
as Fiscal Agent. The assets of the Trust consist primarily of a pool of 312
fixed-rate mortgage loans or groups of cross-collateralized and cross-defaulted
mortgage loans (the "Mortgage Loans") having an aggregate principal balance as
of the Cut-off Date of approximately $1,192,238,941. The Mortgage Loans are
secured by Multi-family and Commercial Properties (each, a "Mortgaged
Property"). The Trust was formed on July 1, 1998. Security Holders receive
Monthly Reports regarding distributions.
Further information with respect to the performance of the Trust is
summarized in the Monthly Reports to Security Holders, which are filed on Form
8-K.
ITEM 2. PROPERTIES.
Information regarding the Mortgaged Properties securing the Mortgage Loans
is set forth in the Prospectus Supplement and the Monthly Reports to Security
Holders. The Trust will acquire title to real estate only upon default of the
mortgagors under the Mortgage Loans. As of March 30, 1999, the Trust Fund did
not own any real estate. Therefore, this item is inapplicable.
ITEM 3. LEGAL PROCEEDINGS.
There are no material pending legal proceedings involving the Trust or,
with respect to the Trust or the Mortgage Loans, the Trustee, any custodian, the
Servicer or the Depositor, other than ordinary routine litigation incidental to
the Trustee's, any custodian's, the Servicer's or the Depositor's duties under
the Pooling and Servicing Agreement.
PART II
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of Security Holders during the fiscal
year covered by this report.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
(a) The Registrant's Series 1998-C1 Securities represent non-recourse
obligations of the Trust, such Trust having assets which consist of the Mortgage
Loans. Strictly speaking, Registrant has no "common equity," but for purposes of
this Item only, Registrant's Commercial Mortgage Pass-Through Certificates,
Series 1998-C1 (the "Securities"), are treated as "common equity."
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(i) Market Information. There is no established public trading market for
Registrant's Securities. Registrant believes the Securities are
traded primarily in intra-dealer markets and non-centralized
inter-dealer markets.
(ii) Holders. The approximate number of registered holders of all classes
of Securities as of December 31, 1998 was 34.
(iii) Dividends. Not applicable. The information regarding dividends
required by sub-paragraph (c) of Item 201 of Regulation S-K is
inapplicable because the Trust does not pay dividends. However,
information about distributions to Security Holders is provided in
the Monthly Reports to Security Holders, which are filed on Form 8-K,
for each month of the fiscal year in which a distribution to Security
Holders was made.
(iv) Sales of Unregistered Securities. Classes F, G, H, J, K, L, M, N,
R-I, R-II, R-III, and V Certificates were privately offered to
qualified institutional buyers and institutional accredited investors
by Morgan Stanley & Co. Incorporated as placement agent. The
privately placed Certificates were sold to the placement agent at the
following prices, expressed as a percentage of the initial principal
balances of the Certificates:
Class Price to Initial Purchaser
F 85.3377%
G 83.7220%
H 81.3096%
J 76.4227%
K 71.3412%
L 55.2773%
M 37.7362%
N 33.2572%
The Class R-I, R-II , R-III and V had no initial certificate
balances.
(b) Not applicable.
ITEM 6. SELECTED FINANCIAL DATA.
Not Applicable. Because of the limited activities of the Trust,
information with respect to the performance of the Trust is summarized in the
Monthly Reports to Security Holders, which are filed on a monthly basis on Form
8-K.
Each Mortgage Loan, and each group of cross-collateralized or
cross-defaulted Mortgage Loans, had an aggregate principal balance of less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION.
Not applicable. The information required by item 303 of Regulation S-K is
inapplicable because the Trust does not have management per se, but rather the
Trust has a Trustee who causes the preparation of the Monthly Reports to
Security Holders. Information concerning the Mortgage Loans and distributions to
the Security Holders is contained in the Monthly Reports to Security Holders
which are filed on Form 8-K, and on the Annual Statement of compliance and the
Annual Servicing Report filed under Item 14 of Form 10-K.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not Applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Not Applicable. Because of the limited activities of the Trust,
information with respect to the Trust is summarized in the Monthly Reports to
Security Holders, which are filed on Form 8-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT.
Not applicable. The Trust does not have officers or directors. Therefore,
the information requested by items 401 and 405 of Regulation S-K is
inapplicable.
ITEM 11. EXECUTIVE COMPENSATION.
Not applicable. The Trust does not have officers or directors. Therefore,
the information requested by item 402 of Regulation S-K is inapplicable.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(a) Security ownership of certain beneficial owners. Not applicable.
Under the Pooling and Servicing Agreement governing the Trust, the
holders of the Securities generally do not have the right to vote and
are prohibited from taking part in management of the Trust.
Therefore, the information requested by item 403(a) of Regulation S-K
is inapplicable.
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(b) Security ownership of management. Not applicable. The Trust does
not have any officers or directors. Therefore, the information
requested by item 403(b) of Regulation S-K is inapplicable.
(c) Changes in control. Not applicable. Because Security Holders do not
possess, directly or indirectly, the power to direct or cause the
direction of the management and policies of the Trust, other than
with respect to certain required consents to amendments to the
Pooling and Servicing Agreement and the ability of holders of
specified amounts of the Securities to act as a group in the event
of the occurrence of certain events which if continuing would
constitute events of default under the Pooling and Servicing
Agreement, the information requested with respect to item 403(c) of
Regulation S-K is inapplicable.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Not applicable. The Trust does not have officers or directors and under
the Pooling and Servicing Agreement governing the Trust, the holder of the
Securities generally do not have the right to vote. Therefore, the information
requested by items 404 of Regulation S-K is inapplicable.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
(a) The following is a list of documents filed as part of this report:
EXHIBITS
*4.1 Pooling and Servicing Agreement dated as of July 1, 1998
(Exhibit 4.1 to Registrant's Form 8-K Report dated July 29, 1998
and filed August 13, 1998).
99.1 Servicer's Annual Statement as to Compliance for the year ended
December 31, 1998.
99.2 Independent Auditor's Report for the year ended December 31,
1998.
99.3 Management's Report of Compliance for the year ended
December 31, 1998.
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* Asterisk indicates exhibits incorporated by reference as
indicated.
(b) The following reports on Form 8-K were filed during the last quarter
of the period covered by the Report:
Date Filed Event Reported
October 28, 1998 Monthly Report regarding distributions to
Security Holders made on October 15, 1998.
November 30, 1998 Monthly Report regarding distributions to
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Security Holders made on November 15, 1998.
December 17, 1998 Monthly Report regarding distributions to
Security Holders made on December 15, 1998.
The following reports on Form 8-K describes an event which occurred,
in part, during the last quarter of the period covered by this
Report:
Date Filed Event Reported
January 28, 1998 Monthly Report regarding distributions to
Security Holders made on January 15, 1999.
(c) The exhibits required to be filed by Registrant pursuant to item 601
of Regulation S-K are listed above and in the Exhibit Index that
immediately follows the signature page hereof.
(d) Not Applicable. The Trust does not have any subsidiaries or
affiliates. Therefore, no financial statements are filed with respect
to subsidiaries or affiliates.
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SUPPLEMENTAL INFORMATION TO BE FURNISHED
WITH REPORTS FILED PURSUANT TO SECTION 15(D)
BY REGISTRANTS WHICH HAVE NOT REGISTERED
SECURITIES PURSUANT TO SECTION 12 OF THE ACT
No Annual report, proxy statement, form of proxy or other soliciting
material has been sent to Security Holders, and the Registrant does not
contemplate sending any such materials subsequent to the filing of this report.
SIGNATURE
Pursuant to the requirement of Section 13 or 15(d) of the Securities Exchange
Act of 1934, Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
MIDLAND LOAN SERVICES, INC., not in its individual
capacity but solely as a duly authorized agent of
Registrant pursuant to Section 3.20 of the Pooling and
Servicing Agreement dated as of July 1, 1998.
By: /s/ Lawrence D. Ashley
---------------------------------
Name: Lawrence D. Ashley
Title: Director of MBS Programs
Date: March 31, 1999
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EXHIBIT INDEX
EXHIBIT DOCUMENT
*4.1 Pooling and Servicing Agreement dated as of July 1,
1998 (Exhibit 4.1 to Registrant's Form 8-K Report
dated July 29, 1998 and filed August 13, 1998).
99.1 Servicer's Annual Statement as to Compliance for the
year ended December 31, 1998.
99.2 Independent Auditor's Report for the year ended
December 31, 1998.
99.3 Management's Report of Compliance for the year ended
December 31, 1998.
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* Asterisk indicates exhibits incorporated by reference as indicated.
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March 9, 1999
Attn: Asset-Backed Securities Trust Services Group - CMAC, Series 1998-C1
LaSalle National Bank
135 South LaSalle Street
Suite 1625
Chicago, IL 60674-4107
Commercial Mortgage Acceptance Corp., Commercial Mortgage
Pass-Through Certificates
Series 1998-C1
OFFICER'S CERTIFICATE
Pursuant to the requirements of that certain Pooling and Servicing Agreement
governing the referenced Trust (the "PSA"), it is hereby certified that (i) the
undersigned has completed a review of the Servicer's performance of its
obligations under the PSA for the current calendar year; (ii) to the best of the
undersigned's knowledge on the basis of that review the Servicer has fulfilled
its obligations under the PSA throughout such period; (iii) to the best of the
undersigned's knowledge, the sub-servicer, if any, has fulfilled its obligations
under its sub-servicing agreement in all material respects; and (iv) no notice
has been received from any governmental agency or body which would indicate a
challenge or question as to the status of the Trust's qualification as a REMIC
under the Code.
/s/ Charles J. Sipple 3/9/99
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Charles J. Sipple Date
Senior Vice President
/s/ Paula J. Mickelson 3/9/99
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Paula J. Mickelson Date
Vice President
cc: Please see attached page
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Officer's Certificate
March 9, 1999
Page 2
cc: Attn: Commercial Mortgage Surveillance Manager
Standard & Poor's Ratings Services
25 Broadway
New York, NY 10004-0000
Attn: Commercial MBS Monitoring Dept.
Moody's Investors Service, Inc.
99 Church Street
New York, NY 10007-0000
ERNST & YOUNG LLP One Kansas City Place Phone: 816 474 5200
1200 Main Street
Kansas City
Missouri 64105-2143
Report of Independent Accountants on Management's
Assertion on Compliance with the Minimum
Servicing Standards Set Forth in the Uniform Single
Attestation Program for Mortgage Bankers
The Audit Committee
PNC Bank Corp.
We have examined management's assertion, included in the accompanying report
titled Report of Management on Compliance with the Minimum Servicing Standards
Set Forth in the Uniform Single Attestation Program for Mortgage Bankers, that
except for noncompliance with the minimum servicing standard for custodial bank
accounts, Midland Loan Services, Inc. (MLS), a wholly-owned subsidiary of PNC
Bank Corp., complied with the minimum servicing standards set forth in the
Mortgage Bankers Association of America's Uniform Single Attestation Program for
Mortgage Bankers (USAP) except for commercial loan and multifamily loan
servicing, minimum servicing standards V.4 and VI.1., which the Mortgage Bankers
Association of American has interpreted as inapplicable to such servicing during
the year ended December 31, 1998. Management is responsible for MLS' compliance
with those requirements. Our responsibility is to express an opinion on
management's assertions about MLS' compliance based on our examination.
Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and, accordingly, included
examining, on a test basis, evidence about MLS' compliance with those
requirements and performing such other procedures as we considered necessary in
the circumstances. We believe that our examination provides a reasonable basis
for our opinion. Our examination does not provide a legal determination on MLS'
compliance with specified requirements.
In our opinion, management's assertion that except for noncompliance with the
minimum servicing standard for custodial account reconciliations, MLS complied
with the aforementioned requirements during the year ended December 31, 1998, is
fairly stated, in all material respects.
As discussed in management's assertion, the following material noncompliance
occurred at MLS during the year ended December 31, 1998. With regard to standard
I.4, reconciling items exist which have not been resolved within 90 calendar
days of their original identification.
/s/ Ernst & Young LLP
January 22, 1999
Ernst & Young LLP is a member of Ernst & Young International, Ltd.
MIDLAND
LOAN SERVICES, INC.
Report of Management Compliance with the Minimum Servicing Standards Set
Forth in the Uniform Single Attestation Program for Mortgage Bankers
We, as members of management of Midland Loan Services, Inc. (MLS), a wholly
owned subsidiary of PNC Bank Corp. (PNCBC), are responsible for complying with
the minimum servicing standards as set forth in the Mortgage Bankers Association
of America's Uniform Single Attestation Program for Mortgage Bankers (USAP)
except for commercial loan and multifamily servicing, minimum servicing
standards V.4 and VI.1, which the Mortgage Bankers Association of America has
interpreted as inapplicable to such servicing. We are also responsible for
establishing and maintaining effective internal control over compliance with
these standards. We have performed an evaluation of MLS' compliance with the
minimum servicing standards as set forth in the USAP as of December 31, 1998 and
for the year then ended. Based on this evaluation, we assert that during the
year ended December 31, 1998, MLS complied, in all material respects, with the
minimum servicing standards set forth in the USAP except as described below.
With regard to Standard I.4, reconciling items exist which have not been
resolved within ninety calendar days of their original identification.
As of and for this same period, PNCBC had in effect a fidelity bond in the
amount of $300,000,000 and an error and omissions policy in the amount of
$20,000,000.
/s/ Leon E. Bergman
_________________________________________
Leon E. Bergman
Executive Vice President
/s/ Paula J. Mickelson
_________________________________________
Paula J. Mickelson
Vice President
March 30, 1999
