SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) December 9, 1999
First Union Commercial Mortgage Securities, Inc.
(Exact Name of Registrant as Specified in its Charter)
North Carolina
(State or Other Jurisdiction of Incorporation)
333-62671 56-1643598
(Commission File Number) (I.R.S. Employer Identification No.)
One First Union Center, Charlotte, North Carolina 28228-0600
(Address of Principal Executive Offices) (Zip Code)
(704) 374-6161
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 5. Other Events.
On or about December 17, 1999, the Registrant will cause the issuance and
sale of approximately $699,810,000 initial principal amount of Mortgage
Pass-Through Certificates, Series 1999-C4, Class IO, Class A-1, Class A-2, Class
B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class
L, Class M, Class N, Class R-I, Class R-II and Class R-III (the "Certificates")
pursuant to a Pooling and Servicing Agreement to be dated as of December 1,
1999, among the Registrant, First Union National Bank, as Master Servicer, ORIX
Real Estate Capital Markets, LLC, as Special Servicer, and Norwest Bank
Minnesota, National Association, as Trustee. In connection with the sale of
certain classes of the Certificates to the public (the "Publicly Offered
Certificates"), the Registrant has been advised by First Union Securities, Inc.
and Merrill Lynch, Pierce, Fenner & Smith Incorporated (together, the
"Underwriters"), that the Underwriters have furnished to prospective investors
certain written descriptions of the securities to be offered that set forth the
name of the issuer, the size of the potential offering and miscellaneous similar
items (the "Structural Term Sheets") with respect to the Publicly Offered
Certificates following the effective date of Registration Statement No.
333-62671 but prior to the availability of a final Prospectus relating to the
Publicly Offered Certificates. In connection with the sale of the Publicly
Offered Certificates, the Registrant also has been informed by the Underwriters
that the Underwriters have furnished to prospective investors certain
descriptive information regarding the mortgage loans (the "Mortgage Loans")
underlying the Certificates that set forth the number of Mortgage Loans, the
principal balance of the Mortgage Loans, information regarding the mortgage
rates thereon and miscellaneous similar items (the "Collateral Term Sheets")
following the effective date of Registration Statement No. 333-62671 but prior
to the availability of a final Prospectus relating to the Publicly Offered
Certificates. The Structural Term Sheets and Collateral Term Sheets are being
filed as an exhibit to this report.
The Structural Term Sheets and the Collateral Term Sheets attached hereto
have been provided by the Underwriters. The information in the Structural Term
Sheets and Collateral Term Sheets is preliminary and may be superseded by the
Prospectus Supplement relating to the Publicly Offered Certificates and by any
other information subsequently filed with the Securities and Exchange
Commission.
-2-
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
List below the financial statements, pro forma financial information and
exhibits, if any, filed as part of this report.
(a) Financial Statements of Business Acquired
Not applicable
(b) Pro Forma Financial Information
Not applicable
(c) Exhibits.
99.1 Structural Term Sheets and Collateral Term Sheets prepared
by the Underwriters in connection with the sale of the
Publicly Offered Certificates of the Registrant.
-3-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
(Registrant)
Dated: December 13, 1999 By: /s/ CRAIG M. LIEBERMAN
--------------------------------------------
Name: Craig M. Lieberman
Title: Vice President
-4-
<PAGE>
INDEX TO EXHIBITS
Exhibit
No. Document Description
--- --------------------
99.1
Structural Term Sheets and Collateral Term Sheets prepared by the
Underwriters in connection with the sale of the Publicly Offered
Certificates of the Registrant.
-5-
UNDERWRITERS' STATEMENT
PRELIMINARY STRUCTURAL AND COLLATERAL TERM SHEET
First Union National Bank Commercial Mortgage Trust
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C4
CLASS A-1, CLASS A-2, CLASS IO AND CLASS B
The attached Preliminary Structural and Collateral Term Sheet (the "Term
Sheet") is privileged and confidential and is intended for use by the addressee
only. This Term Sheet is furnished to you solely by First Union Securities, Inc.
and Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Underwriters") and
not by the issuer of the certificates identified above (the "Offered
Certificates") or any other party. The issuer of the Offered Certificates has
not prepared or taken part in the preparation of these materials. The Term Sheet
is based upon information made available to the Underwriters. None of the
Underwriters, the issuer of the Offered Certificates, or any other party makes
any representation as to the accuracy of payment or performance on the
underlying assets of the Offered Certificates, or completeness of the
information herein. The information herein is preliminary, and will be
superseded by the applicable prospectus supplement and by any other information
subsequently filed with the Securities and Exchange Commission. The information
herein may not be provided to any third party other than the addressee's legal,
tax, financial and/or accounting advisors for the purposes of evaluating such
information.
No assurance can be given as to the accuracy, appropriateness or
completeness of the Term Sheet in any particular context; or as to whether the
Term Sheet or any subsequent version hereof, reflects future performance of the
Offered Certificates. This Term Sheet should not be construed as either a
prediction or as legal, tax, financial or accounting advice.
Any yields or weighted average lives shown in the Term Sheet are based on
prepayment and other assumptions and actual experience may dramatically affect
such yields or weighted average lives. The principal amount and designation of
any security described in the Term Sheet are subject to change prior to
issuance.
Although a registration statement (including the prospectus) relating to
the Offered Certificates has been filed with the Securities and Exchange
Commission and is effective, the final prospectus supplement relating to the
Offered Certificates has not been filed with the Securities and Exchange
Commission. This communication shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of the Offered
Certificates in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of any
such state. Prospective purchasers are referred to the final prospectus and
prospectus supplement relating to the Offered Certificates for definitive terms
of the Offered Certificates and the collateral.
Please be advised that mortgage-backed and/or asset-backed securities may
not be appropriate for all investors. Potential investors must be willing to
assume, among other things, market price volatility, prepayments, yield curve
and interest rate risks. Investors should fully consider the risk of an
investment in these Offered Certificates.
If you have received this communication in error, please notify the sending
party immediately by telephone and return the original to such party by mail.
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and
solicitations of offers to buy securities are made only by, and this information
must be read in conjunction with, the final prospectus supplement and the
related prospectus or, if not registered under the securities laws, the final
offering memorandum (the "Offering Document"), and any such decision to invest
in such securities should be made solely in reliance upon such Offering
Document. Information contained herein does not purport to be complete and is
subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and
representations and other precautionary matters, as disclosed in the Offering
Document. Capitalized terms used but not defined herein have the respective
meanings set forth in the related preliminary prospectus supplement. Information
regarding the underlying assets has been provided by the issuer of the
securities or an affiliate thereof and has not been independently verified by
the underwriters or their respective affiliates. This information was prepared
on the basis of certain assumptions (including in certain case assumptions
specified by the recipient hereof) regarding payments, interest rates, weighted
average lives and weighted average loan age, loss and other matters including
but not limited to, the assumptions described in the Offering Document, the
underwriters, and any of their respective affiliates make no representation or
warranty as to the actual rate or timing of payments on any of the underlying
assets or the payments or yield on the securities. This information supercedes
any prior versions hereof, will be deemed to be superseded by any subsequent
versions (including with respect to any description of the securities or the
underlying assets, the information contained in the Offering Document), and will
deemed superseded, amended and supplemented in their entirety by such final
Offering Document.
<PAGE>
[LOGO] [LOGO]
New CMBS Issue
Preliminary Term Sheet
----------
$699,810,000
Offered Certificates (Approximate)
First Union National Bank
Commercial Mortgage Trust
Commercial Mortgage Pass-Through Certificates
Series 1999-C4
First Union Commercial Mortgage Securities, Inc., as Depositor
First Union National Bank, as Master Servicer
First Union National Bank, Mortgage Loan Seller
Merrill Lynch Mortgage Capital Inc., Mortgage Loan Seller
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and
solicitations of offers to buy securities are made only by, and this information
must be read in conjunction with, the final prospectus supplement and the
related prospectus or, if not registered under the securities laws, the final
offering memorandum (the "Offering Document"), and any such decision to invest
in such securities should be made solely in reliance upon such Offering
Document. Information contained herein does not purport to be complete and is
subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and
representations and other precautionary matters, as disclosed in the Offering
Document. Capitalized terms used but not defined herein have the respective
meanings set forth in the related preliminary prospectus supplement. Information
regarding the underlying assets has been provided by the issuer of the
securities or an affiliate thereof and has not been independently verified by
the underwriters or their respective affiliates. This information was prepared
on the basis of certain assumptions (including in certain case assumptions
specified by the recipient hereof) regarding payments, interest rates, weighted
average lives and weighted average loan age, loss and other matters including
but not limited to, the assumptions described in the Offering Document, the
underwriters, and any of their respective affiliates make no representation or
warranty as to the actual rate or timing of payments on any of the underlying
assets or the payments or yield on the securities. This information supercedes
any prior versions hereof, will be deemed to be superseded by any subsequent
versions (including with respect to any description of the securities or the
underlying assets, the information contained in the Offering Document), and will
deemed superseded, amended and supplemented in their entirety by such final
Offering Document.
1
<PAGE>
[LOGO] [LOGO]
Structural and Collateral Term Sheet
First Union National Bank
Commercial Mortgage Pass-Through Certificates
Series 1999-C4
$699,810,000
Offered Certificates (Approximate)
Percentage of Mortgage Pool by Cut-off Date Balance
[MAP]
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and
solicitations of offers to buy securities are made only by, and this information
must be read in conjunction with, the final prospectus supplement and the
related prospectus or, if not registered under the securities laws, the final
offering memorandum (the "Offering Document"), and any such decision to invest
in such securities should be made solely in reliance upon such Offering
Document. Information contained herein does not purport to be complete and is
subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and
representations and other precautionary matters, as disclosed in the Offering
Document. Capitalized terms used but not defined herein have the respective
meanings set forth in the related preliminary prospectus supplement. Information
regarding the underlying assets has been provided by the issuer of the
securities or an affiliate thereof and has not been independently verified by
the underwriters or their respective affiliates. This information was prepared
on the basis of certain assumptions (including in certain case assumptions
specified by the recipient hereof) regarding payments, interest rates, weighted
average lives and weighted average loan age, loss and other matters including
but not limited to, the assumptions described in the Offering Document, the
underwriters, and any of their respective affiliates make no representation or
warranty as to the actual rate or timing of payments on any of the underlying
assets or the payments or yield on the securities. This information supercedes
any prior versions hereof, will be deemed to be superseded by any subsequent
versions (including with respect to any description of the securities or the
underlying assets, the information contained in the Offering Document), and will
deemed superseded, amended and supplemented in their entirety by such final
Offering Document.
2
<PAGE>
[LOGO] [LOGO]
First Union National Bank Commercial Mortgage Trust
Commercial Mortgage Pass-Through Certificates
Series 1999-C4
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Cut-off Date Cut-off Date Rating Average Principal Pass-Through
Class Certificate Subordination Level (S&P/DCR) Life(yrs.)(3) Window(3)(4) Rate(5)
Balance(1)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
A-1 $206,000,000 26.25% AAA/AAA 5.40 Jan00-Sep08 Fixed Rate
A-2 $447,304,000 26.25% AAA/AAA 9.73 Sep08-Nov09 Fixed Rate
IO(7) $885,836,326(2) --- AAAr/AAA N/A Jan00-Nov19 WAC-IO
B(7) $46,506,000 21.00% AA/AA 9.91 Nov09- Nov09 Fixed Rate(6)
C(8) --- --- A ---NOT OFFERED Fixed Rate(6)
D(8) --- --- A- ---NOT OFFERED Fixed Rate(6)
E(8) --- --- BBB ---NOT OFFERED WAC
F(8) --- --- BBB- ---NOT OFFERED WAC
G(8) --- --- BB+ ---NOT OFFERED Fixed Rate
H(8) --- --- BB ---NOT OFFERED Fixed Rate
J(8) --- --- BB- ---NOT OFFERED Fixed Rate
K(8) --- --- B+ ---NOT OFFERED Fixed Rate
L(8) --- --- B ---NOT OFFERED Fixed Rate
M (8) --- --- B- ---NOT OFFERED Fixed Rate
N (8) --- --- NR ---NOT OFFERED Fixed Rate
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) In the case of each such Class, subject to a permitted variance of plus or
minus 5%.
(2) Represents the notional amount.
(3) Based on Assumptions described in the Prospectus Supplement.
(4) Principal Window is the period during which distributions of principal are
expected to be made to the holders of each designated Class in accordance
with the Assumptions described in the Prospectus Supplement.
(5) Other than the Class E, F and IO Certificates, each Class of Certificates
will accrue interest generally at a fixed rate of interest as described in
the Prospectus Supplement. The Class E, F and IO Certificates will accrue
interest at variable rates as described in the Prospectus Supplement. The
final pass-through rates will be determined at pricing.
(6) Capped at the Weighted Average Net Mortgage Rate.
(7) At closing, it is anticipated that the Class B and Class IO Certificates
will be sold to First Union National Bank in an arms-length transaction.
(8) Not offered hereby.
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and
solicitations of offers to buy securities are made only by, and this information
must be read in conjunction with, the final prospectus supplement and the
related prospectus or, if not registered under the securities laws, the final
offering memorandum (the "Offering Document"), and any such decision to invest
in such securities should be made solely in reliance upon such Offering
Document. Information contained herein does not purport to be complete and is
subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and
representations and other precautionary matters, as disclosed in the Offering
Document. Capitalized terms used but not defined herein have the respective
meanings set forth in the related preliminary prospectus supplement. Information
regarding the underlying assets has been provided by the issuer of the
securities or an affiliate thereof and has not been independently verified by
the underwriters or their respective affiliates. This information was prepared
on the basis of certain assumptions (including in certain case assumptions
specified by the recipient hereof) regarding payments, interest rates, weighted
average lives and weighted average loan age, loss and other matters including
but not limited to, the assumptions described in the Offering Document, the
underwriters, and any of their respective affiliates make no representation or
warranty as to the actual rate or timing of payments on any of the underlying
assets or the payments or yield on the securities. This information supercedes
any prior versions hereof, will be deemed to be superseded by any subsequent
versions (including with respect to any description of the securities or the
underlying assets, the information contained in the Offering Document), and will
deemed superseded, amended and supplemented in their entirety by such final
Offering Document.
3
<PAGE>
[LOGO] [LOGO]
Issue Characteristics:
Issue Type: The Class A-1, A-2, B, and IO Certificates (the
"Offered Certificates") will be offered pursuant
to the Prospectus Supplement, subject to
completion, dated December 8, 1999 and
accompanying Prospectus dated December 8, 1999,
and the Class C, D, E, F, G, H, J, K, L, M and N
Certificates are not offered thereby.
Offered Certificates: $699,810,000 monthly pay, multi-class commercial
mortgage REMIC Pass-Through Certificates,
including three fixed-rate principal and interest
Classes (Classes A-1, A-2, and B) and one variable
rate interest only class (Class IO). The Offered
Certificates have not been previously offered to
the public.
Collateral: The collateral consists of a $885,836,326 pool of
156 fixed-rate commercial and multifamily Mortgage
Loans, of which 149 are conduit loans consisting
of $857,901,469 or 96.85% of the pool of mortgage
loans as of the Cut-Off Date and 7 are Credit
Tenant Lease loans consisting of $27,934,858 or
3.15% of the pool of mortgage loans as of the
Cut-Off Date.
Loan Sellers: First Union National Bank (79.9%) and Merrill
Lynch Mortgage Capital Inc. (20.1%)
Co-Lead Managers: First Union Securities, Inc. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated.
Master Servicer: First Union National Bank.
Special Servicer: ORIX Real Estate Capital Markets, LLC.
Trustee: Norwest Bank Minnesota, National Association.
Expected Settle Date: On or prior to December 20, 1999.
Distribution Dates: The 15th of each month. The first Distribution
Date on which investors will be entitled to
distributions will be in January, 2000.
Minimum Denominations: $1,000 for the Class A-1, Class A-2, and Class B
Certificates. $1,000,000 for the Class IO.
ERISA Considerations: Class A-1, Class A-2 and Class IO Certificates are
expected to be ERISA eligible.
SMMEA Eligibility: Class A-1, Class A-2, Class IO and Class B
Certificates are expected to be SMMEA eligible.
Risk Factors: THE CERTIFICATES INVOLVE A DEGREE OF RISK AND MAY
NOT BE SUITABLE FOR ALL INVESTORS. SEE THE "RISK
FACTORS" SECTION OF THE PROSPECTUS SUPPLEMENT AND
THE "RISK FACTORS" SECTION OF THE PROSPECTUS.
Rating Agencies: Standard & Poor's Ratings Services ("S&P") and
Duff & Phelps Credit Rating Co. ("DCR")
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and
solicitations of offers to buy securities are made only by, and this information
must be read in conjunction with, the final prospectus supplement and the
related prospectus or, if not registered under the securities laws, the final
offering memorandum (the "Offering Document"), and any such decision to invest
in such securities should be made solely in reliance upon such Offering
Document. Information contained herein does not purport to be complete and is
subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and
representations and other precautionary matters, as disclosed in the Offering
Document. Capitalized terms used but not defined herein have the respective
meanings set forth in the related preliminary prospectus supplement. Information
regarding the underlying assets has been provided by the issuer of the
securities or an affiliate thereof and has not been independently verified by
the underwriters or their respective affiliates. This information was prepared
on the basis of certain assumptions (including in certain case assumptions
specified by the recipient hereof) regarding payments, interest rates, weighted
average lives and weighted average loan age, loss and other matters including
but not limited to, the assumptions described in the Offering Document, the
underwriters, and any of their respective affiliates make no representation or
warranty as to the actual rate or timing of payments on any of the underlying
assets or the payments or yield on the securities. This information supercedes
any prior versions hereof, will be deemed to be superseded by any subsequent
versions (including with respect to any description of the securities or the
underlying assets, the information contained in the Offering Document), and will
deemed superseded, amended and supplemented in their entirety by such final
Offering Document.
4
<PAGE>
[LOGO] [LOGO]
Structural Characteristics:
The Offered Certificates (other than the Class IO Certificates) are fixed-rate,
monthly pay, multi-class, sequential pay REMIC Pass-Through Certificates. The
Class IO Certificates will accrue interest at variable rates as discussed in the
Prospectus Supplement. All Classes of Certificates derive their cash flows from
the entire pool of Mortgage Loans.
[GRAPH]
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and
solicitations of offers to buy securities are made only by, and this information
must be read in conjunction with, the final prospectus supplement and the
related prospectus or, if not registered under the securities laws, the final
offering memorandum (the "Offering Document"), and any such decision to invest
in such securities should be made solely in reliance upon such Offering
Document. Information contained herein does not purport to be complete and is
subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and
representations and other precautionary matters, as disclosed in the Offering
Document. Capitalized terms used but not defined herein have the respective
meanings set forth in the related preliminary prospectus supplement. Information
regarding the underlying assets has been provided by the issuer of the
securities or an affiliate thereof and has not been independently verified by
the underwriters or their respective affiliates. This information was prepared
on the basis of certain assumptions (including in certain case assumptions
specified by the recipient hereof) regarding payments, interest rates, weighted
average lives and weighted average loan age, loss and other matters including
but not limited to, the assumptions described in the Offering Document, the
underwriters, and any of their respective affiliates make no representation or
warranty as to the actual rate or timing of payments on any of the underlying
assets or the payments or yield on the securities. This information supercedes
any prior versions hereof, will be deemed to be superseded by any subsequent
versions (including with respect to any description of the securities or the
underlying assets, the information contained in the Offering Document), and will
deemed superseded, amended and supplemented in their entirety by such final
Offering Document.
5
<PAGE>
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Structural Characteristics (continued):
Interest Distributions: Each Class of Offered Certificates (other than the
Class IO Certificates) will be entitled on each
Distribution Date to interest accrued at its
Pass-Through Rate on the outstanding Certificate
Balance of such Class during the prior calendar
month. The Class IO Certificates will be entitled
on each Distribution Date to the aggregate
interest accrued on each of its components during
the prior calendar month.
Principal Distributions: Principal will be distributed on each Distribution
Date to the Class of Principal Balance
Certificates outstanding, with the earliest
alphabetical/numerical Class designation, until
its Certificate Balance is reduced to zero. If,
due to losses, the Certificate Balances of the
Class B through Class N Certificates are reduced
to zero payments of principal to the Class A-1 and
A-2 Certificates will be made on a pro rata basis.
Prepayment Premium
Allocation: All Prepayment Premiums are distributed to
Certificateholders on the Distribution Date
following the collection period in which the
prepayment occurred. On each Distribution Date, a
portion of all Prepayment Premiums will be
allocated to each Class of Offered Certificates
and to the Class C, Class D, Class E and Class F
then entitled to principal distributions, which
percentage will be equal to the product of the
amount of such Prepayment Premiums, multiplied by
(a) a fraction, the numerator of which is equal to
the amount of principal distributable to such
class of sequential pay certificates on such
Distribution Date and the denominator of which is
the Principal Distribution Amount for such
Distribution Date, and (b) 25%. The remaining
portion of all Prepayment Premiums will be
allocated to the Class IO Certificates.
Yield Maintenance
Charges Allocation: All Yield Maintenance Charges are distributed to
Certificateholders on the Distribution Date
following the collection period in which the
prepayment occurred. On each Distribution Date,
the holders of each Class of Offered Certificates
and the holders of Class C, Class D, Class E and
Class F Certificates then entitled to principal
distributions will be entitled to an amount of
Yield Maintenance Charges of Offered Certificates
equal to the product of (a) the amount of such
Yield Maintenance Charges, multiplied by (b) a
fraction, the numerator of which is equal to the
excess, if any, of the Pass-Through Rate of such
Class of Offered Certificates and the applicable
Non-Offered Certificates over the relevant
Discount Rate, and the denominator of which is
equal to the excess, if any, of the Mortgage Rate
of the prepaid Mortgage Loan over the relevant
Discount Rate, multiplied by (c) a fraction, the
numerator of which is equal to the amount of
principal distributable on such class of Offered
Certificates and Non-Offered Certificates on such
Distribution Date, and the denominator of which is
the Principal Distribution Amount for such
Distribution Date.
Yield Maintenance
Charge Allocation
Example: A Yield Maintenance Charge will generally be equal
to the present value of the reduction in interest
payments as a result of the prepayment through the
maturity of the Mortgage Loan, discounted at the
yield of a Treasury security of similar maturity
in most cases (converted from semi-annual to
monthly pay). The following hypothetical example
reflects that method:
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and
solicitations of offers to buy securities are made only by, and this information
must be read in conjunction with, the final prospectus supplement and the
related prospectus or, if not registered under the securities laws, the final
offering memorandum (the "Offering Document"), and any such decision to invest
in such securities should be made solely in reliance upon such Offering
Document. Information contained herein does not purport to be complete and is
subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and
representations and other precautionary matters, as disclosed in the Offering
Document. Capitalized terms used but not defined herein have the respective
meanings set forth in the related preliminary prospectus supplement. Information
regarding the underlying assets has been provided by the issuer of the
securities or an affiliate thereof and has not been independently verified by
the underwriters or their respective affiliates. This information was prepared
on the basis of certain assumptions (including in certain case assumptions
specified by the recipient hereof) regarding payments, interest rates, weighted
average lives and weighted average loan age, loss and other matters including
but not limited to, the assumptions described in the Offering Document, the
underwriters, and any of their respective affiliates make no representation or
warranty as to the actual rate or timing of payments on any of the underlying
assets or the payments or yield on the securities. This information supercedes
any prior versions hereof, will be deemed to be superseded by any subsequent
versions (including with respect to any description of the securities or the
underlying assets, the information contained in the Offering Document), and will
deemed superseded, amended and supplemented in their entirety by such final
Offering Document.
6
<PAGE>
General Yield Maintenance Charge Allocation Example:
Assuming the structure presented in this Term Sheet and the
Prospectus Supplement and the following assumptions:
Assume prepayment occurs on April 1, 2001.
Assume only Class A-1 will be receiving principal at the
time of this prepayment.
Mortgage Loan characteristics of hypothetical loan being
prepaid:
Balance: $10,000.000
Mortgage Rate-Coupon: 8.00%
Scheduled Maturity: 8 years (April 1, 2007)
Yield Maintenance Charge Payable: $500,000
Discount Rate/Treasury Yield (monthly): 5.00%
Certificate Characteristics: Class A-1 Pass-Through Rate:
6.00%
Discount Rate Fraction Calculation:
- --------------------------------------------------------------------------------
Class A-1 Class IO
- --------------------------------------------------------------------------------
(Class A-1 Pass-Through
Rate-Discount Rate)/ 6.00% - 5.00%
(Gross Mortgage Rate - -------------- = 33.33%
Discount Rate) 8.00% - 5.00%
- --------------------------------------------------------------------------------
Portion of Yield 100.00% - 33.33% =
Maintenance Premium 33.33% 66.67%
allocated to Class A-1
- --------------------------------------------------------------------------------
YM Charges Allocated $166,667 $333,333
- --------------------------------------------------------------------------------
Credit Enhancement Each Class of Certificates, other than Classes
A-1, A-2 and IO (the "Senior Certificates"), will
be subordinate to: (i) the Senior Certificates and
(ii) each other Class with an earlier alphabetical
Class designation.
Advancing: The Master Servicer and, if it fails to do so, the
Trustee will be obligated to make P&I Advances and
Servicing Advances, including delinquent property
taxes and insurance, but only to the extent that
such Advances are deemed recoverable and in the
case of Principal and Interest Advances subject to
Appraisal Reductions that may occur.
Realized Losses and
Expense Losses: Realized Losses and Additional Trust Fund
Expenses, if any, will be allocated to the Class
N, Class M, Class L, Class K, Class J, Class H,
Class G, Class F, Class E, Class D, Class C, and
Class B Certificates, in that order, and then, pro
rata, to Classes A-1 and A-2.
Prepayment Interest
Shortfalls: For any Distribution Date, any Net Aggregate
Prepayment Interest Shortfall for such
Distribution Date will generally be allocated on a
pro rata basis to each Class of Certificates
(other than Class IO) in proportion to its
entitlement to interest. Up to 0.025% of the
Master Servicing Fee Rate and all accrued income
earned by the Master Servicer on any voluntary
principal prepayment in the applicable collection
period shall be offset against any Prepayment
Interest Shortfall.
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and
solicitations of offers to buy securities are made only by, and this information
must be read in conjunction with, the final prospectus supplement and the
related prospectus or, if not registered under the securities laws, the final
offering memorandum (the "Offering Document"), and any such decision to invest
in such securities should be made solely in reliance upon such Offering
Document. Information contained herein does not purport to be complete and is
subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and
representations and other precautionary matters, as disclosed in the Offering
Document. Capitalized terms used but not defined herein have the respective
meanings set forth in the related preliminary prospectus supplement. Information
regarding the underlying assets has been provided by the issuer of the
securities or an affiliate thereof and has not been independently verified by
the underwriters or their respective affiliates. This information was prepared
on the basis of certain assumptions (including in certain case assumptions
specified by the recipient hereof) regarding payments, interest rates, weighted
average lives and weighted average loan age, loss and other matters including
but not limited to, the assumptions described in the Offering Document, the
underwriters, and any of their respective affiliates make no representation or
warranty as to the actual rate or timing of payments on any of the underlying
assets or the payments or yield on the securities. This information supercedes
any prior versions hereof, will be deemed to be superseded by any subsequent
versions (including with respect to any description of the securities or the
underlying assets, the information contained in the Offering Document), and will
deemed superseded, amended and supplemented in their entirety by such final
Offering Document.
7
<PAGE>
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Appraisal Reductions: An appraisal reduction generally will be created
in the amount, if any, by which the Principal
Balance of a Specially Serviced Mortgage Loan
(plus other amounts overdue or advanced in
connection with such loan) exceeds 90% of the
appraised value of the related Mortgaged Property
plus all escrows and reserves held with respect to
the mortgage loan. The Appraisal Reduction Amount
will reduce proportionately the amount of P&I
Advances for such loan, which reduction will
result, in general, in a reduction of interest
distributable to the most subordinate Class of
Principal Balance Certificates outstanding.
An Appraisal Reduction will be reduced to zero as
of the date the related Mortgage Loan has been
brought current for at least three consecutive
months, paid in full, liquidated, repurchased, or
otherwise disposed.
Controlling Class: The Controlling Class will generally be the most
subordinate Class of Certificates outstanding at
any time or, if the Certificate Balance of such
Class is less than 25% of the initial Certificate
Balance of such Class, the next most subordinate
Class of Principal Balance Certificates.
Special Servicer: The Pooling and Servicing Agreement permits the
Special Servicer to modify, waive or amend any
term of any Mortgage Loan if it determines, in
accordance with the servicing standard, that it is
appropriate to do so subject to certain
limitations.
Optional Termination: The Depositor, the Master Servicer, the Special
Servicer, and certain Certificateholders will have
the option to purchase, in whole but not in part,
the remaining assets of the Trust on or after the
Distribution Date on which the Stated Principal
Balance of the Mortgage Loans then outstanding is
less than or equal to 1% of the Cut-Off Date Pool
Balance. Such purchase price will generally be at
a price equal to the unpaid aggregate principal
balance of the Mortgage Loans (or fair market
value in the case of REO Properties), plus accrued
and unpaid interest and certain other additional
trust fund expenses.
Reports to
Certificateholders: The Trustee will prepare and deliver monthly
Certificateholder Reports. The Special Servicer
will prepare and deliver to the Trustee a monthly
Special Servicer Report summarizing the status of
each Specially Serviced Mortgage Loan. The Master
Servicer and the Special Servicer will prepare and
deliver to the Trustee an annual report setting
forth, among other things, the debt service
coverage ratios for each Mortgage Loan, as
available. Each of the reports will be available
to the Certificateholders. A Report containing
information regarding the Mortgage Loans will be
available electronically.
Summary: As of the Cut-Off Date, the Mortgage Pool consists
of a $885,836,326 pool of 156 fixed-rate, first
lien, mortgage loans secured by liens on
commercial and multifamily properties located
throughout 32 states and Washington, D.C., with a
weighted average Mortgage Rate of 8.01% and a
weighted average remaining term to maturity of 116
months. See the Prospectus Supplement for more
detailed collateral information.
Initial Pool Balance: $885,836,326
Number of Loans: 156
Number of Properties 165
Gross WAC: 8.01%
Original WAM: 119
Remaining WAM: 116
Average Loan Balance: $5,678,438
WA DSCR*: 1.35x
WA Cut-off Date LTV Ratio*: 72.72%
*Excluding CTL Loans
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and
solicitations of offers to buy securities are made only by, and this information
must be read in conjunction with, the final prospectus supplement and the
related prospectus or, if not registered under the securities laws, the final
offering memorandum (the "Offering Document"), and any such decision to invest
in such securities should be made solely in reliance upon such Offering
Document. Information contained herein does not purport to be complete and is
subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and
representations and other precautionary matters, as disclosed in the Offering
Document. Capitalized terms used but not defined herein have the respective
meanings set forth in the related preliminary prospectus supplement. Information
regarding the underlying assets has been provided by the issuer of the
securities or an affiliate thereof and has not been independently verified by
the underwriters or their respective affiliates. This information was prepared
on the basis of certain assumptions (including in certain case assumptions
specified by the recipient hereof) regarding payments, interest rates, weighted
average lives and weighted average loan age, loss and other matters including
but not limited to, the assumptions described in the Offering Document, the
underwriters, and any of their respective affiliates make no representation or
warranty as to the actual rate or timing of payments on any of the underlying
assets or the payments or yield on the securities. This information supercedes
any prior versions hereof, will be deemed to be superseded by any subsequent
versions (including with respect to any description of the securities or the
underlying assets, the information contained in the Offering Document), and will
deemed superseded, amended and supplemented in their entirety by such final
Offering Document.
8
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Percent of Wtd. Wtd. Wtd. Wtd. Avg.
Number of Cut-off Balance Cut-off Avg. Wtd. Avg. Avg. Avg. Wtd. Avg. Mortgage
Property Type Loans Balance LTV(2) DSCR(x)(2) MLTV RTM Occupancy (3) Rate
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Multifamily 62 $401,310,987 45.30% 73.9% 1.34x 67.5% 111 94.9% 7.86%
- ------------------------------------------------------------------------------------------------------------------------------------
Retail - Anchored 28 258,198,820 29.15 74.0 1.29 64.6 118 96.3 8.03
- ------------------------------------------------------------------------------------------------------------------------------------
Hospitality 16 80,120,445 9.04 66.5 1.50 59.2 104 NAP 8.31
- ------------------------------------------------------------------------------------------------------------------------------------
Office 10 29,198,822 3.30 69.8 1.27 62.1 118 95.1 8.24
- ------------------------------------------------------------------------------------------------------------------------------------
Healthcare 2 28,879,303 3.26 71.4 1.53 59.0 115 95.5 8.29
- ------------------------------------------------------------------------------------------------------------------------------------
Retail - Unanchored 19 28,382,890 3.20 66.5 1.32 59.0 118 96.2 8.52
- ------------------------------------------------------------------------------------------------------------------------------------
CTL(1) (4) 7 27,934,858 3.15 NAP NAP 36.3 189 100.0 7.36
- ------------------------------------------------------------------------------------------------------------------------------------
Industrial 6 21,383,084 2.41 72.2 1.31 64.3 119 98.7 8.48
- ------------------------------------------------------------------------------------------------------------------------------------
Mixed Use 4 6,225,938 0.70 73.2 1.32 66.7 106 93.8 8.54
- ------------------------------------------------------------------------------------------------------------------------------------
MHC 1 2,452,834 0.28 74.3 1.24 67.0 117 93.8 8.25
- ------------------------------------------------------------------------------------------------------------------------------------
Self Storage 1 1,748,346 0.20 62.4 1.30 52.5 119 97.0 8.65
- ------------------------------------------------------------------------------------------------------------------------------------
Totals/Weighted Average 156 $885,836,326 100.00% 72.7% 1.35x 64.1% 116 95.6% 8.01%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) See page 16 of this Term Sheet and the Prospectus Supplement for a more
detailed discussion of credit tenant lease loans.
(2) CTL Loans are excluded from these calculations.
(3) Occupancy rates were calculated without reference to hospitality
properties.
(4) Including 6 Mortgage Loans, or approximately 2.85% of the Cut-Off Date Pool
Balance, secured by hospitality properties and 1 Mortgage Loan, or
approximately 0.30% of the Cut-Off Date Pool Balance, secured by a retail
property.
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and
solicitations of offers to buy securities are made only by, and this information
must be read in conjunction with, the final prospectus supplement and the
related prospectus or, if not registered under the securities laws, the final
offering memorandum (the "Offering Document"), and any such decision to invest
in such securities should be made solely in reliance upon such Offering
Document. Information contained herein does not purport to be complete and is
subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and
representations and other precautionary matters, as disclosed in the Offering
Document. Capitalized terms used but not defined herein have the respective
meanings set forth in the related preliminary prospectus supplement. Information
regarding the underlying assets has been provided by the issuer of the
securities or an affiliate thereof and has not been independently verified by
the underwriters or their respective affiliates. This information was prepared
on the basis of certain assumptions (including in certain case assumptions
specified by the recipient hereof) regarding payments, interest rates, weighted
average lives and weighted average loan age, loss and other matters including
but not limited to, the assumptions described in the Offering Document, the
underwriters, and any of their respective affiliates make no representation or
warranty as to the actual rate or timing of payments on any of the underlying
assets or the payments or yield on the securities. This information supercedes
any prior versions hereof, will be deemed to be superseded by any subsequent
versions (including with respect to any description of the securities or the
underlying assets, the information contained in the Offering Document), and will
deemed superseded, amended and supplemented in their entirety by such final
Offering Document.
9
<PAGE>
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Collateral Characteristics (continued):
Ten Largest Mortgage Loans
The following table and summaries describe the ten largest Mortgages Loans in
the Mortgage Pool by Cut-Off Date Balance:
Ten Largest Mortgage Loans by Cut-Off Balance
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Percent
by
No. Aggregate Cut-off Cut-off
Loan Name of Cut-Off Date Date Pool Date LTV at
Prop. Balance Balance Property Type LTV Maturity
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Washington REIT Portfolio 5 $50,000,000 5.64% Multifamily 52.9% 52.9%
- --------------------------------------------------------------------------------------------------------------
Warner Marketplace 1 27,981,213 3.16 Retail-Anchored 76.5 68.4
- --------------------------------------------------------------------------------------------------------------
Atriums of Kendall Apartments 1 22,400,000 2.53 Multifamily 80.0 73.9
- --------------------------------------------------------------------------------------------------------------
Falling Water Apartments 1 22,000,000 2.48 Multifamily 78.3 71.1
- --------------------------------------------------------------------------------------------------------------
Associated - KTC Properties 1 19,633,357 2.22 Multifamily 77.0 68.3
- --------------------------------------------------------------------------------------------------------------
Hammocks at Long Point 1 18,753,048 2.12 Multifamily 79.8 68.8
- --------------------------------------------------------------------------------------------------------------
Harborview 1 18,379,303 2.07 Healthcare-Skilled 68.1 51.8
Nursing
- --------------------------------------------------------------------------------------------------------------
Aventura Commons Shopping Center 1 17,238,955 1.95 Retail - Anchored 75.0 67.4
- --------------------------------------------------------------------------------------------------------------
Tiburon Apartments 1 15,388,668 1.74 Multifamily 69.3 66.7
- --------------------------------------------------------------------------------------------------------------
Tustin Plaza Shopping Center 1 14,523,577 1.64 Retail-Anchored 79.8 71.5
- --------------------------------------------------------------------------------------------------------------
Total/Weighted Average 14 $226,298,121 25.55% ---- 71.0% 64.5%
- --------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
Wtd. Avg.
Cut-off Avg.
Loan Name Date Mortgage
DSCR Rate City State Occupancy Property Size
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Washington REIT Portfolio 2.11x 7.140% Various VA 96.3% 1,146 units
- ---------------------------------------------------------------------------------------------------
Warner Marketplace 1.21 8.000 Canoga Park CA 100.0% 158,947 sq.ft.
- ---------------------------------------------------------------------------------------------------
Atriums of Kendall Apartments 1.20 8.030 Miami FL 97.5% 449 units
- ---------------------------------------------------------------------------------------------------
Falling Water Apartments 1.20 7.950 Las Vegas NV 77.1% 288 units
- ---------------------------------------------------------------------------------------------------
Associated - KTC Properties 1.32 7.500 Toledo OH 91.1% 506 units
- ---------------------------------------------------------------------------------------------------
Hammocks at Long Point 1.21 7.990 Wilmington GA 95.5% 308 units
Island
- ---------------------------------------------------------------------------------------------------
Harborview 1.69 8.375 Jersey City NJ 98.9% 180 beds
- ---------------------------------------------------------------------------------------------------
Aventura Commons Shopping Center 1.27 8.230 Aventura FL 100.0% 127,846 sq.ft.
- ---------------------------------------------------------------------------------------------------
Tiburon Apartments 1.20 8.220 Dallas TX 94.5% 362 units
- --------------------------------------------------------------------------------------------------
Tustin Plaza Shopping Center 1.31 7.970 Tustin CA 93.8% 91,411 sq.ft.
- ---------------------------------------------------------------------------------------------------
Total/Weighted Average 1.47x 7.825% --- --- 94.7% ---
- ---------------------------------------------------------------------------------------------------
</TABLE>
The Washington Real Estate Investment Trust. The Washington Real Estate
Investment Trust ("WRIT") loan is secured by a first lien mortgage on five
multifamily properties located in Virginia in the vicinity of the District of
Columbia. The properties range in size from 190 units to 279 units and comprise
1,146 units in aggregate. The property improvements consist of mid-rise and
high-rise apartment buildings constructed between 1962 and 1982. As of July
1999, the occupancies at the five properties ranged from 95.2% to 97.9%, with a
weighted average overall occupancy of 96.3%. The mortgage loan is a ten-year
interest-only loan and is full-recourse to WRIT, which has a long-term debt
rating from S&P of "A-". WRIT was founded in 1960 and has been a publicly held
real estate investment trust for over 35 years. WRIT's real estate portfolio
includes 57 income-producing properties comprising approximately eight million
square feet of commercial space and over 1,800 multifamily units. WRIT's real
estate portfolio is located primarily in the Mid-Atlantic region of the United
States.
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and
solicitations of offers to buy securities are made only by, and this information
must be read in conjunction with, the final prospectus supplement and the
related prospectus or, if not registered under the securities laws, the final
offering memorandum (the "Offering Document"), and any such decision to invest
in such securities should be made solely in reliance upon such Offering
Document. Information contained herein does not purport to be complete and is
subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and
representations and other precautionary matters, as disclosed in the Offering
Document. Capitalized terms used but not defined herein have the respective
meanings set forth in the related preliminary prospectus supplement. Information
regarding the underlying assets has been provided by the issuer of the
securities or an affiliate thereof and has not been independently verified by
the underwriters or their respective affiliates. This information was prepared
on the basis of certain assumptions (including in certain case assumptions
specified by the recipient hereof) regarding payments, interest rates, weighted
average lives and weighted average loan age, loss and other matters including
but not limited to, the assumptions described in the Offering Document, the
underwriters, and any of their respective affiliates make no representation or
warranty as to the actual rate or timing of payments on any of the underlying
assets or the payments or yield on the securities. This information supercedes
any prior versions hereof, will be deemed to be superseded by any subsequent
versions (including with respect to any description of the securities or the
underlying assets, the information contained in the Offering Document), and will
deemed superseded, amended and supplemented in their entirety by such final
Offering Document.
10
<PAGE>
[LOGO] [LOGO]
Warner Marketplace. The Warner Marketplace loan is secured by a first lien
mortgage on a 158,947 square foot anchored retail center constructed in 1999 and
located in Canoga Park, California. As of November 1999, the property was 100%
occupied. The property is occupied by eight tenants, including such anchors as
Bed Bath & Beyond, Sportmart, Borders Books and Pier One and over 83% of the net
rentable area is leased beyond the term of the Mortgage Loan. The sponsor of the
borrower is the J.H. Snyder Company which has constructed over 4 million square
feet of office and retail space. All rents payable under the Warner Marketplace
leases are required to be deposited directly into a lockbox account controlled
by the servicer.
Atriums of Kendall Apartments. The Atriums of Kendall Apartments loan is secured
by a first lien mortgage on a 449-unit apartment complex constructed in 1985 and
located in Miami, Florida. As of August 1999, the property was 97.5% occupied.
The property improvements consist of 7 five-story elevator buildings. The
property was recently renovated at a cost of approximately $3.1 million. The
sponsor of the borrower is Ceebraid-Signal Corporation. Ceebraid Signal
Corporation was founded in 1950 and currently owns and manages approximately
12,000 multifamily units, located primarily in Florida and the Northeast United
States. The Atriums of Kendall Apartments loan is cross-collateralized and
cross-defaulted with two other mortgage loans in the mortgage pool that comprise
the Ceebraid-Signal Portfolio (control numbers 11 and 18). In aggregate, the
three cross-collateralized loans have a Cut-Off-Date Balance of $48,000,000.
Under a cash pledge agreement, the borrower has pledged a cash deposit of $1.5
million to the lender as additional collateral. If an event of default occurs
under any of the three Ceebraid-Signal loans, the lender may apply the pledged
deposit to repay the loan. The cash deposit will be released to the borrower if,
at any time before August 1, 2004, the combined DSCR for the three loans is at
least 1.20x during the trailing twelve month period and the LTV is at least 80%
based upon an appraisal performed at such time. If these tests are not satisfied
by August 1, 2004, the cash deposit will be applied in full to prepay the loan.
See "Risk Factors--Significant Affiliated Sponsor Concentrations" in the
Prospectus Supplement for information regarding the Ceebraid-Signal Portfolio.
Falling Water Apartments. The Falling Water Apartment loan is secured by a first
lien mortgage on a 288-unit luxury apartment complex constructed in 1998 and
located in Las Vegas, Nevada. The property is located in an affluent area of Las
Vegas and is adjacent to The Players Club at the Canyons Golf Course. The
borrower was required to post an irrevocable letter of credit in the amount of
$10,000,000 in favor of the lender due to the limited operating history of the
newly constructed property. The letter of credit expires on July 1, 2000 and is
extendable through August 1, 2004. If an event of default occurs under the
Falling Waters loan, the lender may draw upon the letter of credit and use the
proceeds to repay the loan. The letter of credit will be released to the
borrower if, at any time before August 1, 2004, the DSCR is at least 1.20x
during the trailing twelve month period and the LTV is at least 80% based upon
an appraisal performed at such time. If these tests are not satisfied before
August 1, 2004, the proceeds of the draw on the letter of credit will be applied
to repay the loan. The sponsor of the borrower is The Olen Companies, a real
estate management and development company founded in 1973 that owns and operates
over three million leaseable square feet of commercial property and over 6,400
multifamily units nationally.
Associated--KTC. The KTC Properties loan is secured by a first lien mortgage on
a multifamily property located in Toledo, Ohio. The property contains a total of
506 units contained in 101 two-story buildings. The property covers 606,009
square feet of gross building area, and the net rentable area is 560,171 square
feet. Unit mix includes 333 two-bedroom units and 173 three-bedroom units. The
complex was built in 1985. As of August 1999, the project had an occupancy of
91.1%. Amenities of the property include an outdoor pool, clubhouse facility,
and playground. The borrowing entity is owned 100% by Associated Estates Realty
Corporation ("AERC"). AERC is an owner, manager and developer specializing in
multifamily properties which has been in business for over 30 years. AERC
currently owns, manages, or is a joint venture partner in over 35,000 units in
more than 150 properties located in 15 states. On October 22, 1999, Moody's
lowered its rating of AERC's senior unsecured debt from "B1" to "B2", and on
November 22, 1999, S&P lowered its rating of AERC's senior unsecured debt from
"BB+ " to "BB-". See "RISK FACTORS--Risks Associated with Borrower
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and
solicitations of offers to buy securities are made only by, and this information
must be read in conjunction with, the final prospectus supplement and the
related prospectus or, if not registered under the securities laws, the final
offering memorandum (the "Offering Document"), and any such decision to invest
in such securities should be made solely in reliance upon such Offering
Document. Information contained herein does not purport to be complete and is
subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and
representations and other precautionary matters, as disclosed in the Offering
Document. Capitalized terms used but not defined herein have the respective
meanings set forth in the related preliminary prospectus supplement. Information
regarding the underlying assets has been provided by the issuer of the
securities or an affiliate thereof and has not been independently verified by
the underwriters or their respective affiliates. This information was prepared
on the basis of certain assumptions (including in certain case assumptions
specified by the recipient hereof) regarding payments, interest rates, weighted
average lives and weighted average loan age, loss and other matters including
but not limited to, the assumptions described in the Offering Document, the
underwriters, and any of their respective affiliates make no representation or
warranty as to the actual rate or timing of payments on any of the underlying
assets or the payments or yield on the securities. This information supercedes
any prior versions hereof, will be deemed to be superseded by any subsequent
versions (including with respect to any description of the securities or the
underlying assets, the information contained in the Offering Document), and will
deemed superseded, amended and supplemented in their entirety by such final
Offering Document.
11
<PAGE>
[LOGO] [LOGO]
Concentrations, Borrowers under Common Control and Related Borrowers"
and--"Risks Related to the Borrower's Form of Entity" in the Prospectus
Supplement.
Hammocks at Long Point Apartments. The Hammocks at Long Point loan is secured by
a first lien mortgage on an apartment complex located in Wilmington Island,
Georgia. The property location is approximately 15 miles east of Savannah,
Georgia. The 308-unit complex was constructed in 1997. Improvements include 15
three-story apartment buildings, a fitness center, clubhouse, outdoor pool and
tennis courts. As of October 1999, the property was 95.5% occupied. The sponsor
of the borrower is Merry Land Properties, Inc., which currently owns and manages
over 2,500 apartment units in the Southeast United States. Merry Land
Properties, Inc. invests, develops, rehabs and manages apartment properties,
mainly in the Southeast coastal region of the United States.
Harborview. The Harborview loan is secured by a first lien mortgage on a
healthcare facility located in Jersey City, New Jersey. Built in 1984, this 0.91
acre site contains a five-story skilled nursing facility that contains 180 beds
and a total of 68,000 square feet. The facility features a dining room, day care
room, nursing stations, small lounges, physical and occupational therapy rooms,
activity rooms, and a recreation room. Occupancy has been at 99% for 1995, 1996,
1997, and 1998. Currently, a waiting list is also maintained for the property.
The borrowing entity is Harborview Holding, LLC. The management company, Jersey
City Healthcare Providers LLC, currently manages 3,283 long-term beds throughout
New Jersey.
Aventura Commons Shopping Center. The Aventura Commons Shopping Center loan is
secured by a first lien mortgage on an anchored retail center located in
Aventura, Florida. The property consists of an 11.35-acre site improved with a
127,846 square foot retail center, consisting of four anchored tenant buildings
and one outparcel retail building with two tenants. As of September 1999, the
center was 100% leased to anchors such as Best Buy Stores, Whole Foods Market
and PetsMart, and over 95% of the net rentable area is leased beyond the term of
the Mortgage Loan. Built in phases from 1997 to 1998, the property is located
approximately 20 miles north of Miami. The sponsors of the borrower are
principals of the Aztec Group, Inc. and Berkowitz Development Corp. All rents
payable under the Aventura leases are required to be deposited directly into a
lockbox account controlled by the Servicer.
Tiburon Apartments. The Tiburon Apartments loan is secured by a first lien
mortgage on a 362-unit garden apartment complex located in Dallas, Texas. The
property was 94.5% occupied as of July 1999. The sponsor of the borrower is
Alliance Holdings, a privately owned real estate investment, development and
finance firm which primarily concentrates on multifamily properties. Alliance
Holdings and its affiliates own interests in a portfolio of more than 25,000
apartment units. All rents payable under the Tiburon leases are required to be
deposited directly into a lockbox account controlled by the Servicer.
Approximately $5.6 million of mezzanine debt is secured by a pledge of the
limited partnership interests of the borrower. Payments on the mezzanine debt
are only permitted so long as the DSCR (after giving effect to such payments) is
not less than 1.10x. The Tiburon loan and the mezzanine loan have the same
scheduled maturity date.
Tustin Plaza Shopping Center. The Tustin Plaza Shopping Center loan is secured
by a first lien mortgage on a 91,411 square foot anchored retail shopping center
located in Tustin, California. The improvements were constructed in 1986. The
shopping center was 93.8% occupied by 30 tenants as of June 1999. The property
is anchored by Office Depot, which occupies 25.4% of the center's net rentable
area. Office Depot's lease extends until December, 2014.
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and
solicitations of offers to buy securities are made only by, and this information
must be read in conjunction with, the final prospectus supplement and the
related prospectus or, if not registered under the securities laws, the final
offering memorandum (the "Offering Document"), and any such decision to invest
in such securities should be made solely in reliance upon such Offering
Document. Information contained herein does not purport to be complete and is
subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and
representations and other precautionary matters, as disclosed in the Offering
Document. Capitalized terms used but not defined herein have the respective
meanings set forth in the related preliminary prospectus supplement. Information
regarding the underlying assets has been provided by the issuer of the
securities or an affiliate thereof and has not been independently verified by
the underwriters or their respective affiliates. This information was prepared
on the basis of certain assumptions (including in certain case assumptions
specified by the recipient hereof) regarding payments, interest rates, weighted
average lives and weighted average loan age, loss and other matters including
but not limited to, the assumptions described in the Offering Document, the
underwriters, and any of their respective affiliates make no representation or
warranty as to the actual rate or timing of payments on any of the underlying
assets or the payments or yield on the securities. This information supercedes
any prior versions hereof, will be deemed to be superseded by any subsequent
versions (including with respect to any description of the securities or the
underlying assets, the information contained in the Offering Document), and will
deemed superseded, amended and supplemented in their entirety by such final
Offering Document.
12
<PAGE>
[LOGO] [LOGO]
Call Protection: 100% of the Mortgage Loans contain call protection
provisions. The weighted average lockout and defeasance
period for all loans is 9.01 years. The Mortgage Loans are
generally prepayable without penalty between zero to six
months from Mortgage Loan maturity. 144 of the Mortgage
Loans, or approximately 92.48% of the Cut-Off Date Pool
Balance, allow defeasance.
Prepayment Premiums:
Percent of Remaining Balance Analysis*
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Prepayment Premium Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Lock-out/Defeasance 100.00 97.22 95.10 94.28 93.38 95.16 95.25 93.85 95.19 93.10
- -----------------------------------------------------------------------------------------------------------------------------
YM 0.00 2.78 4.90 5.72 6.62 4.84 4.75 4.63 4.81 4.77
- -----------------------------------------------------------------------------------------------------------------------------
Sub Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00 98.48 100.00 97.87
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
5.0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------
4.0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------
3.0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------
2.0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------
1.5% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------
1.0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------
Open 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.52 0.00 2.13
- -----------------------------------------------------------------------------------------------------------------------------
Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Numbers represent percentage of outstanding balance as of the date
indicated
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and
solicitations of offers to buy securities are made only by, and this information
must be read in conjunction with, the final prospectus supplement and the
related prospectus or, if not registered under the securities laws, the final
offering memorandum (the "Offering Document"), and any such decision to invest
in such securities should be made solely in reliance upon such Offering
Document. Information contained herein does not purport to be complete and is
subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and
representations and other precautionary matters, as disclosed in the Offering
Document. Capitalized terms used but not defined herein have the respective
meanings set forth in the related preliminary prospectus supplement. Information
regarding the underlying assets has been provided by the issuer of the
securities or an affiliate thereof and has not been independently verified by
the underwriters or their respective affiliates. This information was prepared
on the basis of certain assumptions (including in certain case assumptions
specified by the recipient hereof) regarding payments, interest rates, weighted
average lives and weighted average loan age, loss and other matters including
but not limited to, the assumptions described in the Offering Document, the
underwriters, and any of their respective affiliates make no representation or
warranty as to the actual rate or timing of payments on any of the underlying
assets or the payments or yield on the securities. This information supercedes
any prior versions hereof, will be deemed to be superseded by any subsequent
versions (including with respect to any description of the securities or the
underlying assets, the information contained in the Offering Document), and will
deemed superseded, amended and supplemented in their entirety by such final
Offering Document.
13
<PAGE>
<TABLE>
<CAPTION>
Collateral Characteristics (continued):
Property Types States
- ----------------------------------------------------------------------- -------------------------------------------------------
Number of Cut-off Date Percent of Balance Number of Cut-off Date Percent of
Loans Balance Properties Balance Balance
- ---------------------------------------------------------------------- -------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Multifamily 62 $401,310,987 45.30% CA 28 $116,142,465 13.11%
- ---------------------------------------------------------------------- -------------------------------------------------------
Retail - Anchored 28 258,198,820 29.15 FL 19 112,165,441 12.66
- ---------------------------------------------------------------------- -------------------------------------------------------
Hospitality 16 80,120,445 9.04 VA 12 87,293,612 9.85
- ---------------------------------------------------------------------- -------------------------------------------------------
Office 10 29,198,822 3.30 GA 13 77,987,477 8.80
- ---------------------------------------------------------------------- -------------------------------------------------------
Healthcare 2 28,879,303 3.26 TX 14 75,431,933 8.52
- ---------------------------------------------------------------------- -------------------------------------------------------
Retail - Unanchored 19 28,382,890 3.20 NV 5 51,774,331 5.84
- ---------------------------------------------------------------------- -------------------------------------------------------
CTL 7 27,934,858 3.15 PA 10 47,799,615 5.40
- ---------------------------------------------------------------------- -------------------------------------------------------
Industrial 6 21,383,084 2.41 Other 64 317,241,452 35.81
- ---------------------------------------------------------------------- -------------------------------------------------------
Mixed Use 4 6,225,938 0.70 Total: 165 $885,836,326 100.00%
- ---------------------------------------------------------------------- -------------------------------------------------------
MHC 1 2,452,834 0.28
- ----------------------------------------------------------------------
Self Storage 1 1,748,346 0.20
- ----------------------------------------------------------------------
Total: 156 $885,836,326 100.00%
- ----------------------------------------------------------------------
</TABLE>
Cut-Off Date Balances ($)
- --------------------------------------------------------------------------------
Number of Cut-off Date
Loans Balance Percent of Balance
- --------------------------------------------------------------------------------
$574,113 - 2,000,000 48 $66,566,388 7.51%
- --------------------------------------------------------------------------------
2,000,001 - 4,000,000 41 117,590,023 13.27
- --------------------------------------------------------------------------------
4,000,001 - 6,000,000 16 80,333,712 9.07
- --------------------------------------------------------------------------------
6,000,001 - 8,000,000 13 90,728,736 10.24
- --------------------------------------------------------------------------------
8,000,001 - 10,000,000 10 90,863,325 10.26
- --------------------------------------------------------------------------------
10,000,001 - 15,000,000 19 227,979,600 25.74
- --------------------------------------------------------------------------------
15,000,001 - 20,000,000 5 89,393,331 10.09
- --------------------------------------------------------------------------------
20,000,001 - 25,000,000 2 44,400,000 5.01
- --------------------------------------------------------------------------------
25,000,001 - 30,000,000 1 27,981,213 3.16
- --------------------------------------------------------------------------------
45,000,001 - 50,000,000 1 50,000,000 5.64
- --------------------------------------------------------------------------------
Total: 156 $885,836,326 100.00%
- --------------------------------------------------------------------------------
Min: $574,113 Average: $5,678,438 Max:$50,000,000
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DSCRs (x) (Excluding CTLs) Cut-off Date LTVs (Excluding CTLs)
- --------------------------------------------------------------- ------------------------------------------------------------
Number of Cut-off Date Percent of Number Cut-off Date Percent of
Loans Balance Balance of Loans Balance Balance
- --------------------------------------------------------------- ------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1.16 - 1.19x 3 $8,081,424 0.94% 52.91 - 55.00% 5 $60,570,910 7.06%
- --------------------------------------------------------------- ------------------------------------------------------------
1.20 - 1.29 79 509,645,348 59.41 55.01 - 65.00 23 76,340,663 8.90
- --------------------------------------------------------------- ------------------------------------------------------------
1.30 - 1.39 41 142,790,591 16.64 65.01 - 70.00 28 123,595,956 14.41
- --------------------------------------------------------------- ------------------------------------------------------------
1.40 - 1.49 10 62,772,721 7.32 70.01 - 75.00 34 166,099,217 19.36
- --------------------------------------------------------------- ------------------------------------------------------------
1.50 - 1.59 11 53,160,208 6.20 75.01 - 80.00 55 421,640,814 49.15
- --------------------------------------------------------------- ------------------------------------------------------------
1.60 - 1.84 4 31,451,177 3.67 80.01 - 85.00 3 7,122,286 0.83
- ----------------------------------------------------------- ------------------------------------------------------------
1.84 - 2.11 1 50,000,000 5.83 85.01 - 89.77 1 2,531,624 0.30
- --------------------------------------------------------------- ------------------------------------------------------------
Total: 149 $857,901,469 100.00% Total: 149 $857,901,469 100.00%
- --------------------------------------------------------------- ------------------------------------------------------------
Min: 1.16x Average: 1.35x Max: 2.11x Min: 52.91% Average: 72.72% Max: 89.77%
- --------------------------------------------------------------- ------------------------------------------------------------
</TABLE>
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and
solicitations of offers to buy securities are made only by, and this information
must be read in conjunction with, the final prospectus supplement and the
related prospectus or, if not registered under the securities laws, the final
offering memorandum (the "Offering Document"), and any such decision to invest
in such securities should be made solely in reliance upon such Offering
Document. Information contained herein does not purport to be complete and is
subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and
representations and other precautionary matters, as disclosed in the Offering
Document. Capitalized terms used but not defined herein have the respective
meanings set forth in the related preliminary prospectus supplement. Information
regarding the underlying assets has been provided by the issuer of the
securities or an affiliate thereof and has not been independently verified by
the underwriters or their respective affiliates. This information was prepared
on the basis of certain assumptions (including in certain case assumptions
specified by the recipient hereof) regarding payments, interest rates, weighted
average lives and weighted average loan age, loss and other matters including
but not limited to, the assumptions described in the Offering Document, the
underwriters, and any of their respective affiliates make no representation or
warranty as to the actual rate or timing of payments on any of the underlying
assets or the payments or yield on the securities. This information supercedes
any prior versions hereof, will be deemed to be superseded by any subsequent
versions (including with respect to any description of the securities or the
underlying assets, the information contained in the Offering Document), and will
deemed superseded, amended and supplemented in their entirety by such final
Offering Document.
14
<PAGE>
Collateral Characteristics (continued):
Mortgage Rates (%)
- ---------------------------------------------------------------
Number Cut-off Date Percent of
of Loans Balance Balance
- ---------------------------------------------------------------
6.220 - 7.249 9 $96,910,502 10.94%
- ---------------------------------------------------------------
7.250 - 7.749 12 91,929,954 10.38
- ---------------------------------------------------------------
7.750 - 8.249 49 428,099,033 48.33
- ---------------------------------------------------------------
8.250 - 8.749 65 232,919,762 26.29
- ---------------------------------------------------------------
8.750 - 9.125 21 35,977,076 4.06
- ---------------------------------------------------------------
Total: 156 $885,836,326 100.00%
- ---------------------------------------------------------------
Min: 6.220% Average: 8.005% Max: 9.125%
- ---------------------------------------------------------------
<TABLE>
<CAPTION>
Original Terms to Stated Maturity or ARD (Mos) Remaining Terms to Stated Maturity or ARD (Mos)
- --------------------------------------------------------------- ------------------------------------------------------------
Number of Cut-off Date Percent of Number Cut-off Date Percent of
Loans Balance Balance of Loans Balance Balance
- --------------------------------------------------------------- ------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
< 85 10 $85,881,572 9.70% 57 - 96 16 $130,891,652 14.78%
- --------------------------------------------------------------- ------------------------------------------------------------
85 - 108 7 48,177,517 5.44 97 -120 125 659,950,934 74.50
- --------------------------------------------------------------- ------------------------------------------------------------
109 - 132 124 656,783,497 74.14 121 -180 7 60,690,249 6.85
- --------------------------------------------------------------- ------------------------------------------------------------
133 - 180 7 60,690,249 6.85 181 -240 8 34,303,492 3.87
- --------------------------------------------------------------- ------------------------------------------------------------
181 - 216 7 27,315,203 3.08 Total: 156 $885,836,326 100.00%
- --------------------------------------------------------------- ------------------------------------------------------------
> 216 1 6,988,288 0.79 Min: 57 Average: 116 Max: 239
-------------------------------------------------------------- ------------------------------------------------------------
Total: 156 $885,836,326 100.00%
- ---------------------------------------------------------------
Min: 60 Average: 119 Max: 240
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Original Amortization Terms (Mos) Remaining Amortization Terms (Mos)
- --------------------------------------------------------------- ------------------------------------------------------------
Number of Cut-off Date Percent of Number Cut-off Date Percent of
Loans Balance Balance of Loans Balance Balance
- --------------------------------------------------------------- ------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Interest-Only 1 $50,000,000 5.64% Interest-Only 1 $50,000,000 5.64%
- --------------------------------------------------------------- ------------------------------------------------------------
1 - 240 2 10,458,869 1.18 1 - 240 2 10,458,869 1.18
- --------------------------------------------------------------- ------------------------------------------------------------
241 - 264 2 20,099,274 2.27 241 - 264 8 45,335,258 5.12
- --------------------------------------------------------------- ------------------------------------------------------------
265 - 300 25 79,194,927 8.94 265 - 300 19 53,958,943 6.09
- --------------------------------------------------------------- ------------------------------------------------------------
301 - 324 1 1,398,085 0.16 301 - 324 1 1,398,085 0.16
- --------------------------------------------------------------- ------------------------------------------------------------
325 - 360 124 715,812,347 80.81 325 - 360 125 724,685,172 81.81
- --------------------------------------------------------------- ------------------------------------------------------------
> 360 1 8,872,825 1.00 > 360 0 0 0.00
- --------------------------------------------------------------- ------------------------------------------------------------
Total: 156 $885,836,326 100.00% Total: 156 $885,836,326 100.00%
- --------------------------------------------------------------- ------------------------------------------------------------
Min: 180 Average: 329 Max: 361 Min: 177 Average: 326 Max: 360
- --------------------------------------------------------------- ------------------------------------------------------------
</TABLE>
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and
solicitations of offers to buy securities are made only by, and this information
must be read in conjunction with, the final prospectus supplement and the
related prospectus or, if not registered under the securities laws, the final
offering memorandum (the "Offering Document"), and any such decision to invest
in such securities should be made solely in reliance upon such Offering
Document. Information contained herein does not purport to be complete and is
subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and
representations and other precautionary matters, as disclosed in the Offering
Document. Capitalized terms used but not defined herein have the respective
meanings set forth in the related preliminary prospectus supplement. Information
regarding the underlying assets has been provided by the issuer of the
securities or an affiliate thereof and has not been independently verified by
the underwriters or their respective affiliates. This information was prepared
on the basis of certain assumptions (including in certain case assumptions
specified by the recipient hereof) regarding payments, interest rates, weighted
average lives and weighted average loan age, loss and other matters including
but not limited to, the assumptions described in the Offering Document, the
underwriters, and any of their respective affiliates make no representation or
warranty as to the actual rate or timing of payments on any of the underlying
assets or the payments or yield on the securities. This information supercedes
any prior versions hereof, will be deemed to be superseded by any subsequent
versions (including with respect to any description of the securities or the
underlying assets, the information contained in the Offering Document), and will
deemed superseded, amended and supplemented in their entirety by such final
Offering Document.
15
<PAGE>
Collateral Characteristics (continued):
Credit Tenant Lease Loans: Credit Tenant Lease Loans are secured by mortgages
on properties which are leased (each a "Credit
Tenant Lease"), to a tenant which possesses (or
whose parent or other affiliate which guarantees
the lease obligation possesses) the rating
indicated in the following table. Scheduled
monthly rent payments under the Credit Tenant
Leases are generally sufficient to pay in full and
on a timely basis all interest and principal
scheduled to be paid with respect to the related
Credit Tenant Lease Loans.
The Credit Tenant Lease Loans generally provide
that the Tenant is responsible for all costs and
expenses incurred in connection with the
maintenance and operation of the related Credit
Tenant Lease property and that, in the event of a
casualty or condemnation of a material portion of
the related Mortgaged Property:
(i) the Tenant is obligated to continue
making payments; or
(ii) the Tenant must make an offer to
purchase the applicable property subject
to the Credit Tenant Lease for an amount
not less than the unpaid principal
balance plus accrued interest on related
Credit Tenant Lease Loan.
Approximately 3.15% of the Mortgage Loans are
Credit Tenant Lease Loans.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
Guarantor/ Property Cut-Off Date S&P Lease Type
Property Name Tenant Type Balances Rating(1) Code(2)
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Motel 6 1026 Monterey Accor SA Hospitality $6,725,989 BBB B
Motel 6 1048 Arlington Heights Accor SA Hospitality $3,885,927 BBB B
Motel 6 1095 Columbus Accor SA Hospitality $3,173,657 BBB B
Motel 6 22 Sun City Youngstown Accor SA Hospitality $2,542,532 BBB B
Motel 6 378 Mesa Accor SA Hospitality $6,013,720 BBB B
Motel 6 51 Camarillo Accor SA Hospitality $2,894,159 BBB B
PetsMart--Hickory Petsmart, Inc. Retail $2,698,874 B+ NNN
------------------------------------------------------------------------------------------------
Total: $27,934,858
------------------------------------------------------------------------------------------------
</TABLE>
Notes: (1) Unless otherwise indicated, such ratings were the highest
assigned to the applicable Tenant or Guarantor, as applicable, by
S&P.
(2) "NNN" means triple net lease; "B" means bond-type lease.
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and
solicitations of offers to buy securities are made only by, and this information
must be read in conjunction with, the final prospectus supplement and the
related prospectus or, if not registered under the securities laws, the final
offering memorandum (the "Offering Document"), and any such decision to invest
in such securities should be made solely in reliance upon such Offering
Document. Information contained herein does not purport to be complete and is
subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and
representations and other precautionary matters, as disclosed in the Offering
Document. Capitalized terms used but not defined herein have the respective
meanings set forth in the related preliminary prospectus supplement. Information
regarding the underlying assets has been provided by the issuer of the
securities or an affiliate thereof and has not been independently verified by
the underwriters or their respective affiliates. This information was prepared
on the basis of certain assumptions (including in certain case assumptions
specified by the recipient hereof) regarding payments, interest rates, weighted
average lives and weighted average loan age, loss and other matters including
but not limited to, the assumptions described in the Offering Document, the
underwriters, and any of their respective affiliates make no representation or
warranty as to the actual rate or timing of payments on any of the underlying
assets or the payments or yield on the securities. This information supercedes
any prior versions hereof, will be deemed to be superseded by any subsequent
versions (including with respect to any description of the securities or the
underlying assets, the information contained in the Offering Document), and will
deemed superseded, amended and supplemented in their entirety by such final
Offering Document.
16
