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) April 20, 2000
First Union Commercial Mortgage Securities, Inc.
(Exact Name of Registrant as Specified in its Charter)
North Carolina
(State or Other Jurisdiction of Incorporation)
333-30294 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)
UNDERWRITERS' STATEMENT
PRELIMINARY STRUCTURAL AND COLLATERAL TERM SHEET
Item 5. Other Events.
On or about May 11, 2000, the Registrant will cause the issuance and sale
of approximately $785,225,064 initial principal amount of Commercial Mortgage
Pass-Through Certificates, Series 2000-C1, 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 Q, Class R-I, Class R-II, Class R-III and Class R-IV
(the "Certificates") pursuant to a Pooling and Servicing Agreement to be dated
as of May 1, 2000, 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.
333-30294 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. 333-30294 but prior
to the availability of a final Prospectus relating to the Publicly Offered
Certificates. The Structural Term Sheets and Collateral Term Sheets are
contained in the Preliminary Structural and Collateral Term Sheet (the "Term
Sheet"). The Term Sheet is being filed as an exhibit to this report.
The Term Sheet attached hereto has been provided by the Underwriters. The
information in the Term Sheet 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.
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<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 Term Sheet (containing the Structural Term Sheets and
Collateral Term Sheets) prepared by the Underwriters in
connection with the sale of the Publicly Offered
Certificates of the Registrant.
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<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
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<PAGE>
INDEX TO EXHIBITS
Exhibit
No. Document Description
--- --------------------
99.1
Term Sheet (containing the Structural Term Sheets and Collateral
Term Sheets) prepared by the Underwriters in connection with the
sale of the Publicly Offered Certificates of the Registrant.
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FIRST UNION NATIONAL BANK COMMERCIAL MORTGAGE TRUST
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C1
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.
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>
[FIRST UNION LOGO] [MERRILL LYNCH LOGO]
New CMBS Issue
Preliminary Term Sheet
$704,787,000
Offered Certificates (Approximate)
FIRST UNION NATIONAL BANK
COMMERCIAL MORTGAGE TRUST
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C1
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>
[FIRST UNION LOGO] [MERRILL LYNCH LOGO]
Structural and Collateral Term Sheet
FIRST UNION NATIONAL BANK
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C1
$704,787,000
Offered Certificates (Approximate)
Percentage of Mortgage Pool by Cut-off Date Balance
[UNITED STATES MAP WITH PERCENTAGES BY STATE]
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>
[FIRST UNION LOGO] [MERRILL LYNCH LOGO]
FIRST UNION NATIONAL BANK COMMERCIAL MORTGAGE TRUST
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C1
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Cut-off Date
Certificate Cut-off Date Rating Average Principal Pass-Through Rate
Class Balance(1) Subordination Level (S&P/Fitch) Life(yrs.)(3) Window(3)(4) Description(5)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
A-1 $96,000,000 25.750% AAA/AAA 5.71 Jun00-Jul09 Fixed Rate
A-2 $485,449,000 25.750% AAA/AAA 9.68 Jul09-Mar10 Fixed Rate
IO(2) $783,097,303 N/A AAAr/AAA N/A Jun00-Sep29 WAC-IO
B $39,155,000 20.750% AA/AA 9.89 Mar10-Apr10 Fixed Rate(6)
C $35,239,000 16.250% A/A 9.93 Apr10-Apr10 Fixed Rate(6)
D $11,747,000 14.750% A-/A- 9.93 Apr10-Apr10 Fixed Rate(6)
E $25,451,000 11.500% BBB/BBB 9.93 Apr10-Apr10 WAC
F $11,746,000 10.000% BBB-/BBB- 11.01 Apr10-Apr12 WAC
G(7) $29,366,000 6.250% 12.36 Apr12-Dec14 Fixed Rate
H(7) $7,831,000 5.250% 14.68 Dec14-Jan15 Fixed Rate
J(7) $3,916,000 4.750% 14.68 Jan15-Jan15 Fixed Rate
K(7) $7,831,000 3.750% 14.68 Jan15-Jan15 Fixed Rate
L(7) $5,873,000 3.000% 14.70 Jan15-Apr15 Fixed Rate
M(7) $8,810,000 1.875% 16.00 Apr15-Jun16 Fixed Rate
N(7) $14,683,303 N/A 22.09 Jun16-Sep29 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) Not offered hereby.
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
BARRY REINER 704-374-4499 RICH SIGG 212-449-3860
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>
[FIRST UNION LOGO] [MERRILL LYNCH LOGO]
ISSUE CHARACTERISTICS:
Issue Type: The Class A-1, A-2, IO, B, C, D, E, and F Certificates
(the "Offered Certificates") will be offered pursuant
to the Prospectus Supplement, subject to completion,
dated April , 2000 and accompanying Prospectus dated
April 18, 2000, and the Class G, H, J, K, L, M and N
Certificates are not offered thereby.
Offered Certificates: $704,787,000 monthly pay, multi-class commercial
mortgage REMIC Pass-Through Certificates, including
five fixed-rate principal and interest Classes (Classes
A-1, A-2, B, C, and D) two variable rate principal and
interest Classes (Classes E and F) 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 $783,097,304 pool of 145
fixed-rate commercial and multifamily Mortgage Loans,
of which 138 are conduit loans consisting of
$749,608,465 or 95.7% of the pool of mortgage loans as
of the Cut-Off Date and 7 are Credit Tenant Lease loans
consisting of $33,488,838 or 4.3% of the pool of
mortgage loans as of the Cut-Off Date.
Loan Sellers: First Union National Bank (77.3%) and Merrill Lynch
Mortgage Capital Inc. (22.7%).
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 about May 11, 2000.
Distribution Dates: The 15th of each month. The first Distribution Date on
which investors will be entitled to distributions will
be in June, 2000.
Minimum Denominations: $10,000 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 for
Offered Certificates: Standard & Poor's Ratings Services ("S&P") and Fitch
IBCA Inc. ("Fitch").
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>
[FIRST UNION LOGO] [MERRILL LYNCH LOGO]
STRUCTURAL CHARACTERISTICS:
The Offered Certificates (other than the Class IO, E, and F Certificates) are
fixed-rate, monthly pay, multi-class, sequential pay REMIC Pass-Through
Certificates. The Class IO, E, and F 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.
[BAR GRAPH DEPICTING PRINCIPAL AND INTEREST WINDOW]
Notes: (1) The Class A-1, A-2 and IO Certificates will be paid interest on a pro
rata basis.
(2) The above analysis is based on Assumptions described in the
Prospectus Supplement.
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>
[FIRST UNION LOGO] [MERRILL LYNCH LOGO]
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 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 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
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 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>
[FIRST UNION LOGO] [MERRILL LYNCH LOGO]
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 June 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 (June 1, 2008)
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:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
Class A-1 Class IO
--------------------------------------------------------------------------------------------
<S> <C> <C>
(Class A-1 Pass-Through Rate 6.00% - 5.00%
- Discount Rate) / (Gross ------------- = 33.33%
Mortgage Rate - Discount Rate) 8.00% - 5.00%
--------------------------------------------------------------------------------------------
Portion of Yield Maintenance
Premium allocated to Class A-1 33.33% 100.00% - 33.33% = 66.67%
--------------------------------------------------------------------------------------------
YM Charges Allocated $166,667 $333,333
--------------------------------------------------------------------------------------------
</TABLE>
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 Principal and
Interest (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 P&I 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>
[FIRST UNION LOGO] [MERRILL LYNCH LOGO]
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.
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>
[FIRST UNION LOGO] [MERRILL LYNCH LOGO]
Additional Information
To Certificateholders: Certificateholders may request from the Trustee certain
additional information relating to the Mortgage Loans
or the Mortgaged Properties by directing inquiries by
e-mail through the Trustee's internet website. The
Trustee will forward each such inquiry to the Master
Servicer or the Special Servicer. Unless the Master
Servicer or the Special Servicer determines in its sole
discretion that answering such inquiry would not be in
the best interests of the Trust Fund and/or the
Certificateholders or would be a violation of
applicable law or the applicable Mortgage Loan
Documents, it will forward to the Trustee a response to
such inquiry. The Trustee will post responses to
inquiries in the "Investor Q&A Forum" section of its
website to be made available to Certificateholders.
Environmental
Insurance Wrap: In connection with the issuance of the Certificates,
secured creditor impaired property policies will be
obtained for the benefit of the Trust which will
provide coverage with respect to all the Mortgaged
Properties for:
1) the outstanding cut-off date balance,
together with accrued interest and
unreimbursed servicer advances, upon the
occurrence of (i) an event of a default
under the Mortgage Loan and (ii) an adverse
environmental condition at a respective
Mortgaged Property; and
2) a loss as a result of a claim made for
bodily injury, property damage, or clean up
costs resulting from adverse environmental
conditions.
For mortgage loans greater than $13,000,000, three
policies cover various loans at loss limits of 125% of
the cut-off date balance of each respective Mortgage
Loan, and aggregate limits of 70% of the aggregate
cut-off date balance of the applicable Mortgage Loans.
For loans less than $13,000,000, one policy covers
these loans at loss limits of 125% of the cut-off date
balance of each respective Mortgage Loan and aggregate
limits of 35% of the aggregate cut-off date balance of
the applicable Mortgage Loans. The policies carry no
deductibles.
The premium for the policies will be paid in full when
the Certificates are issued. The insurer under the
policies is Commerce and Industry Insurance Company, a
member Company of American International Group, Inc.,
which currently has a "Aaa" financial strength rating
from Moody's, a "AAA" claims-paying ability rating from
Fitch, a "AAA" claims paying ability from S&P and a
"A++XV" rating by A.M. Best Company.
See "DESCRIPTION OF THE MORTGAGE POOL--Assessments of
Property Condition--Environmental Group Insurance
Policies" in the Prospectus Supplement.
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>
[FIRST UNION LOGO] [MERRILL LYNCH LOGO]
Heilig/Petsmart Loans: With respect to five mortgage loans having an aggregate
cut-off date balance of approximately $9,874,385 (the
"Heilig/Petsmart Loans"), a senior interest, having an
initial cut-off date balance of approximately
$7,746,624, and a subordinate interest, having an
initial cut-off date balance of approximately
$2,127,761, are being created. The senior component is
included as part of the Offered Certificates. The
subordinate component, represented by a separate class,
is not being offered hereby, and such class is expected
to be transferred to Merrill Lynch Mortgage Capital
Inc., or one of its affiliates. All principal and
interest collections on the Heilig/Petsmart loans will
be distributed to the Offered Certificateholders until
the senior component of the loans is reduced to zero.
Realized Losses and Additional Trust Fund Expenses with
respect to the Heilig/Petsmart Loans will be allocated
to the subordinate component before being allocated to
the Offered Certificates. Yield Maintenance Charges,
Prepayment Premiums, and Prepayment Interest Shortfalls
with respect to the Heilig/Petsmart Loans will be
allocated between the senior interest and subordinate
interest pro rata.
Summary: As of the Cut-Off Date, the Mortgage Pool consists of a
$783,097,304 pool of 145 fixed-rate, first lien
mortgage loans secured by liens on commercial and
multifamily properties located throughout 32 states,
with a weighted average Mortgage Rate of 8.299% and a
weighted average remaining term to maturity of 127
months. See the Prospectus Supplement for more detailed
collateral information.
-------------------------------------------------
Initial Pool Balance: $783,097,304
Number of Loans: 145
Number of Properties 154
Gross WAC: 8.299%
Original WAM: 131
Remaining WAM: 127
Average Loan Balance: $5,400,671
WA DSCR*: 1.28x
WA Cut-off Date LTV Ratio*: 73.40%
*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.
10
<PAGE>
[FIRST UNION LOGO] [MERRILL LYNCH LOGO]
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Percent of Wtd. Wtd. Avg.
Number of Cut-off Cut-off Avg. Wtd. Wtd. Avg. Wtd. Avg. Wtd. Avg. Mortgage
Property Type Loans Balance Balance LTV(2) Avg. BLTV RTM DSCR(2) Occupancy(3) Rate
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Retail - Anchored(1) 23 185,297,183 23.7% 72.72% 64.67% 119 1.26x 96.85% 8.257%
- -----------------------------------------------------------------------------------------------------------------------------------
Retail - Unanchored 17 49,089,800 6.3 69.31 62.87 116 1.34 96.80 8.620
- -----------------------------------------------------------------------------------------------------------------------------------
Retail - Shadow Anchored 5 36,388,985 4.6 73.30 66.58 118 1.30 99.08 8.540
- -----------------------------------------------------------------------------------------------------------------------------------
Multifamily 52 266,095,335 34.0 77.84 68.10 130 1.22 93.48 8.180
- -----------------------------------------------------------------------------------------------------------------------------------
Office 12 85,434,050 10.9 70.34 62.64 123 1.30 98.80 8.488
- -----------------------------------------------------------------------------------------------------------------------------------
Hospitality 7 56,349,717 7.2 69.94 62.07 114 1.47 N/A 8.379
- -----------------------------------------------------------------------------------------------------------------------------------
Congregate Care 2 26,392,016 3.4 72.90 66.15 116 1.31 97.26 8.534
- -----------------------------------------------------------------------------------------------------------------------------------
CTL - Hospitality(4) 6 23,721,283 3.0 N/A 31.21 193 N/A N/A 7.235
- -----------------------------------------------------------------------------------------------------------------------------------
Mixed Use 5 16,262,114 2.1 61.37 54.44 116 1.42 95.09 8.087
- -----------------------------------------------------------------------------------------------------------------------------------
Self-Storage 6 11,555,773 1.5 61.52 52.05 119 1.30 90.07 8.893
- -----------------------------------------------------------------------------------------------------------------------------------
Industrial 5 10,695,004 1.4 71.21 62.63 116 1.32 95.29 8.710
- -----------------------------------------------------------------------------------------------------------------------------------
CTL - Retail - Anchored(4) 1 9,767,555 1.2 N/A 0.00 298 N/A 100.00 8.473
- -----------------------------------------------------------------------------------------------------------------------------------
Assisted Living 2 4,396,831 0.6 65.80 60.10 119 1.42 91.15 8.917
- -----------------------------------------------------------------------------------------------------------------------------------
Mobile Home Park 2 1,651,658 0.2 77.77 71.09 116 1.22 94.17 8.872
- -----------------------------------------------------------------------------------------------------------------------------------
Totals/Weighted Average 145 783,097,304 100.0% 73.40% 63.19% 127 1.28x 95.76% 8.299%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes the 5 Heilig/Petsmart loans.
(2) CTL Loans are excluded from these calculations.
(3) Occupancy rates were calculated without reference to hospitality
properties.
(4) See page 19 of this Term Sheet and the Prospectus Supplement for a more
detailed discussion of credit tenant lease 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.
11
<PAGE>
[FIRST UNION LOGO] [MERRILL LYNCH LOGO]
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
- ------------------------------------------------------------------------------
Percent
by Cut-
off Date LTV at
No. of Cut-Off Date Pool Property Cut-off Maturity
Loan Name Prop. Balance Balance Type Date LTV or ARD
- ------------------------------------------------------------------------------
Washingtonian Retail -
Center 1 39,387,474 5.0% Anchored 75.75% 66.94%
- ------------------------------------------------------------------------------
Hawthorne Works Retail -
Shopping Center 1 24,802,000 3.2% Anchored 74.04% 68.13%
- ------------------------------------------------------------------------------
Thomson Consumer
Electronics 1 24,605,207 3.1% Office 75.94% 66.48%
- ------------------------------------------------------------------------------
BR- Peartree Retail -
Square 1 22,221,654 2.8% Anchored 72.86% 65.23%
- ------------------------------------------------------------------------------
San Tropez
Apartments 1 21,825,000 2.8% Multifamily 80.54% 77.34%
- ------------------------------------------------------------------------------
Pacific Islands
Apartments 1 20,800,000 2.7% Multifamily 80.00% 65.63%
- ------------------------------------------------------------------------------
Club Lake Pointe
Apartments 1 19,711,917 2.5% Multifamily 79.81% 71.71%
- ------------------------------------------------------------------------------
Covina Town Retail -
Center AMC Shadow
Theaters 1 17,379,334 2.2% Anchored 75.56% 68.31%
- ------------------------------------------------------------------------------
Marlow Heights &
Marlow Plaza 1 16,069,055 2.1% Multifamily 78.01% 69.26%
- ------------------------------------------------------------------------------
The Atrium at Congregate
Gainesville 1 15,864,611 2.0% Care 75.91% 68.79%
- ------------------------------------------------------------------------------
Total/Weighted
Average 10 $222,666,254 28.4% ---- 76.68% 68.58%
- ------------------------------------------------------------------------------
Cut-off Wtd. Avg.
Date Mortgage Property
Loan Name DSCR Rate City State Occupancy Size
- --------------------------------------------------------------------------------
Washingtonian
Center 1.29x 7.400% Gaithersburg MD 96.0% 268,078 SF
- --------------------------------------------------------------------------------
Hawthorne Works
Shopping Center 1.20 8.210 Cicero IL 99.6 310,069 SF
- --------------------------------------------------------------------------------
Thomson Consumer
Electronics 1.21 8.540 Indianapolis IN 100.0 324,375 SF
- --------------------------------------------------------------------------------
BR- Peartree
Square 1.24 8.813 Bronx NY 100.0 139,681 SF
- --------------------------------------------------------------------------------
San Tropez
Apartments 1.20 8.270 Las Vegas NV 94.4 336 Units
- --------------------------------------------------------------------------------
Pacific Islands
Apartments 1.20 7.980 Henderson NV 96.6 352 Units
- --------------------------------------------------------------------------------
Club Lake Pointe
Apartments 1.20 8.092 Coral Springs FL 82.1 240 Units
- --------------------------------------------------------------------------------
Covina Town
Center AMC
Theaters 1.32 8.440 Covina CA 100.0 95,150 SF
- --------------------------------------------------------------------------------
Marlow Heights &
Marlow Plaza 1.20 6.977 Temple Hills MD 93.2 429 Units
- --------------------------------------------------------------------------------
The Atrium at
Gainesville 1.32 8.470 Gainesville FL 95.4 241 Beds
- --------------------------------------------------------------------------------
Total/Weighted
Average 1.24x 8.085% --- --- 96.0% ---
- --------------------------------------------------------------------------------
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>
[FIRST UNION LOGO] [MERRILL LYNCH LOGO]
WASHINGTONIAN CENTER. The Washingtonian Center loan is secured by a first lien
indemnity deed of trust on the Washingtonian Center retail center located in
Gaithersburg, Maryland, which is approximately 15 miles northwest of Washington,
D.C. The center is comprised of 451,517 square feet of net rentable area
("NRA"), of which 183,439 square feet is subject to ground leases between the
borrower and the applicable retailer. The property was approximately 96.0%
occupied by 14 tenants as of February 29, 2000, which tenants include Galyan's
Trading Company, Kohl's Department Store, Barnes & Noble and Pier One. The
largest retailer in the center, Target, owns and occupies a 153,000 square foot
store constructed on property that is ground leased until 2024. Construction of
the property was completed in 1999 on a 27.6 acre site, situated at the
intersection of Interstate 270 and Interstate 370. The property is part of a
mixed use project that includes office, retail, residential, hospitality and
recreational uses.
The borrowing entity, Washington Retail Associates L.C., is a special purpose,
bankruptcy remote entity. The property is managed by Peterson Retail Management,
an affiliate of one of the principals of the borrower and is affiliated with The
Hazel-Peterson Companies, which has developed approximately 5,000,000 square
feet of commercial office and retail space, as well as over 2,500 multfamily
rental units and 16,000 residential lots.
HAWTHORNE WORKS SHOPPING CENTER. The Hawthorne Works Shopping Center loan is
secured by a first lien mortgage on a 310,069 square foot neighborhood shopping
center located in Cicero, Illinois, a suburb of Chicago. The property was
approximately 99.6% occupied as of November 25, 1999. The shopping center is
anchored by a 102,000 square foot K-Mart store and a 96,601 square foot
Dominick's (owned by Safeway) grocery store. Thirty seven other tenants occupy
the shopping center, none of which account for more than 5% of the total net
rentable area, which include Dominick's Finer Foods, Aaron's Rental Purchase,
Fashion Bug and Foot Locker.
Hawthorne Works Shopping Center was originally constructed in 1998. The shopping
center is located on approximately 28 acres at the intersection of Cermak Road
and Cicero Avenue, both of which are major commercial arteries. The site
improvements consist of the two big-box buildings tenanted by K-Mart and
Dominick's, as well as four multi-tenanted buildings and ten free-standing
outparcel buildings. K-Mart, in 1988, completely renovated their store and
expanded into an additional 24,000 square feet of net rentable area.
The borrower is Hawthorne Partners, a special purpose Illinois general
partnership, that is the sole beneficiary of the two Illinois land trusts that
together hold title to the subject property. The principal of the borrowing
entity has over 35 years of experience in the acquisition, development, leasing
and management of commercial properties. The property is managed by Franklin
Partners, L.L.C., an affiliate of the borrower.
THOMSON CONSUMER ELECTRONICS. The Thomson Consumer Electronics loan is secured
by a first lien mortgage on a 324,375 net rentable square feet, office/research
and development building located in Indianapolis, Indiana. The property
improvements consist of a three-story building comprised of 75% office space and
25% research and development space. The property is accessible from both the
I-465 Beltway and North Meridian Street. Thomson Consumer Electronics occupies
the entire building as its corporate headquarters resulting in an occupancy of
100% as of March 1, 2000.
The borrowing entity, 10330 North Meridian II, LLC, is controlled by GFW Trust.
Thomson Consumer Electronics is a wholly owned subsidiary of Thomson Multimedia,
S.A., which has guaranteed the lease. Thomson Multimedia is in turn a subsidiary
of Thomson S.A., which is rated "A-" by S&P. Pursuant to the terms of its lease,
Thomson Consumer Electronics posted a letter of credit issued by Credit
Industriel et Commercial (rated "A" with a stable outlook by S&P) in the amount
of $8,658,000 which represents three years' of rental payments due under the
lease. These funds can be drawn upon should the tenant default under the lease
beyond any applicable notice and cure periods. The letter of credit was assigned
to the lender at closing and is additional collateral for the Thomson Consumer
Electronics loan.
BR - PEARTREE SQUARE. The BR Peartree loan is secured by a first lien mortgage
on a 139,681 net rentable square foot anchored shopping center constructed in
1999 and located in Bronx, New York within the Co-Op City residential
redevelopment. The property improvements consist of a single-story shopping
center containing 12 tenant spaces. As of
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>
[FIRST UNION LOGO] [MERRILL LYNCH LOGO]
December 1999, the property was 100% occupied. Mayfair Supermarkets d/b/a
Edwards Super Food Store, National Wholesale Liquidators, and Rite-Aid serve as
the anchors occupying 55,000, 50,000, and 10,873 square feet, respectively.
The borrowing entity, Plaza Co-Op City, LLC, is a New York limited liability
company. The managing member of the borrowing entity has been a developer of
commercial real estate since 1963 and operates a full service development
company with its own leasing, construction and management specialists. Since
1963, he has developed over 6 million square feet of retail and office space in
New York, New Jersey, Pennsylvania, Connecticut, Massachusetts, and Maryland.
SAN TROPEZ APARTMENTS. The San Tropez Apartments loan was funded in connection
with the borrower's acquisition of the property. The loan is secured by a first
lien deed of trust on a 336 unit apartment complex located in unincorporated Las
Vegas, Nevada, approximately 4 miles southwest of the Las Vegas "Strip". The
property improvements were constructed in 1997 and include 21 two-story wood
frame and stucco buildings located on approximately 18 acres. The unit mix
consists of 168 one-bath/one bedroom apartments, 136 two-bath/two bedroom
apartments and 32 two-bath/three bedroom apartments. The property had a physical
occupancy of 94.35% as of January 3, 2000.
San Tropez Apartments is a gated Class A complex which offers such amenities as
two swimming pools, a clubhouse, 82 detached parking garages, and a fully
equipped fitness center to be completed. At closing the borrower was required to
establish an escrow account with lender in the amount of $500,000 to be used
toward the completion of the fitness center on the property. The borrower has
the option to substitute an irrevocable letter of credit for the cash
collateral.
The borrower is Rayman Nevada 2K Limited Partnership, a special purpose,
bankruptcy-remote, Illinois limited partnership. The San Tropez Apartments is
managed by Executive Affiliates, Inc., an affiliate of the borrower. Executive
Affiliates, Inc. currently manages 20 multi-family properties comprising 6,100
units nationwide and has managed over 20,000 multifamily units during the past
30 years.
PACIFIC ISLANDS APARTMENTS. The Pacific Islands Apartments loan was funded in
connection with the borrower's acquisition of the property. The loan is secured
by a first lien deed of trust on a 352 unit apartment complex constructed in
1992 and located in Henderson, Nevada. The property is located approximately
four miles southeast from the Las Vegas "Strip". The improvements include 34
two-story wood frame and stucco buildings located on approximately 20.5 acres.
The unit mix of the property consists of 88 one-bath one-bedroom units, 176
two-bath/two bedroom units and 88 two-bath/three bedroom units. Improvements
also include a clubhouse and two pools. The property had a physical occupancy of
approximately 96.59% as of October 5, 1999.
Pacific Island Apartments is a gated Class A complex which offers such amenities
as two swimming pools, three heated spas, gazebos with wet bars and barbecues, a
fully equipped fitness center and a recreation center.
The borrower is NGVP, LLC a special purpose, bankruptcy-remote Virginia limited
liability company. Pacific Islands Apartments is managed by General Services
Corporation, an affiliate of the borrower. General Services Corporation
currently owns over 12,000 apartment units nationwide and also manages shopping
centers and warehouses with a staff of over 450 employees.
CLUB LAKE POINTE APARTMENTS. The Club Lake Pointe loan is secured by a first
lien mortgage on a 240 unit apartment complex located in Coral Springs, Florida
that was constructed in late 1998. The subject improvements include 20
three-story buildings on approximately 16.2 acres, and contain approximately 80
two-bedroom units and 160 three-bedroom units. Club Lake Pointe Apartments is a
gated Class A complex which offers such amenities as concierge services, heated
in-ground pool, outdoor spa, lighted tennis courts, a fully appointed clubhouse,
a sauna and a fully equipped fitness center. The property is also located
adjacent to Lake Coral Springs, a 122-acre man-made lake and public park.
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>
[FIRST UNION LOGO] [MERRILL LYNCH LOGO]
As of February 8, 2000 the property was approximately 82.08 % occupied. At
closing, the borrower posted an irrevocable evergreen letter of credit in the
amount of $6,000,000 and funded an escrow account in the amount of $2,200,000
sufficient to fund 12 months of scheduled payments of principal and interest and
certain ongoing reserves. The letter of credit and cash deposit will not be
released until certain operating and valuation thresholds have been achieved.
The borrower is Lake Pointe Trust Corporation, a single purpose,
bankruptcy-remote Florida corporation affiliated with The Olen Companies, which
is 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.
COVINA TOWN CENTER AMC THEATERS. The Covina Town Center AMC Theater loan is
secured by a first mortgage lien on a 95,150 net rentable square foot multiplex
movie theater located in Covina, California. The AMC Theater is a 30-screen
theater which became a part of the Covina Town Center in February, 1998. It is
considered a state of the art facility with stadium style seating and is one of
the largest theaters in Los Angeles County. From March 1998 to February 1999,
revenue was $316,608 per screen. From July 1998 to June 1999 revenue increased
to $372,204 per screen. The Covina Town Center, which is not a part of the loan
collateral, is a 351,527 net rentable square feet power/entertainment center
anchored by Home Depot, Staples, Jo-Ann Fabrics, Michael's and Petsmart. The
shopping center was 92% leased as of December 1999.
The borrower is FR Covina, Inc., an affiliate of Family Realty, Inc., which is
an affiliate of Captec Net Lease Realty, Inc. Family Realty, Inc. is capitalized
with $30 million of direct foreign investment (preferred equity structure) and
intends to build a portfolio of entertainment-based retail properties. Family
Realty, Inc. is managed and advised by Captec, a public REIT which develops and
acquires net leased, free-standing retail and restaurant properties operating
under national brands.
MARLOW HEIGHTS & MARLOW PLAZA. The Marlow Heights loan is secured by a first
lien mortgage on two multifamily properties commonly known as Marlow Heights
(Phase I and Phase II) and Marlow Plaza. The properties are located in Temple
Hills, Maryland, approximately 1.5 miles from the Washington, DC border. Marlow
Heights is located at 4000-4223 28th Avenue and Marlow Plaza is located at 2900
St. Clair Drive. Occupancy as of December 31, 1999 was 93.24%. The borrower is
MHA Associates Limited Partnership. The principal of the borrowing entity has
over 30 years experience in commercial and residential real estate and currently
has ownership interests in 23 properties.
Marlow Heights is comprised of 298 units contained in 15 garden style apartment
buildings. The property was built in 1962 and renovated in 1984. Phase I
contains 172 units and Phase II contains 126 units. Amenities of the property
include a gazebo, play and picnic areas, and a laundry room on the basement
level of each building.
Marlow Plaza is a six story mid-rise building containing 131 units. The property
was completed in 1964 and renovated in 1988. Amenities of the property include a
swimming pool, wading pool, a sundeck and community room with kitchen. A laundry
room is located on each of the floors 2 through 6.
THE ATRIUM AT GAINESVILLE. The Atrium of Gainesville loan is secured by a first
lien mortgage on a five story 241-unit independent living retirement facility
located on an approximately 9.7 acre site in Gainesville, Florida. The property
was constructed in 1986 and includes common areas and limited on-site shopping
and services that comprise approximately 231,702 square feet of improvements.
The unit mix of the property consists of 56 studios, 118 one-bedroom apartments
and 67 two-bedroom apartments. The property was approximately 95.44% occupied as
of January 31, 2000.
The borrower is Congregate Care Asset III Limited Partnership, a special purpose
Delaware limited partnership and an affiliate of Holiday Retirement Corporation.
The property is also managed by Holiday Retirement Corporation. Holiday
Retirement Corporation, with its related entities, is the largest owner and
operator of retirement housing in the United States. Holiday manages
approximately 216 retirement facilities comprising over 26,000 units located in
39 states, Canada, and the United Kingdom.
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>
[FIRST UNION LOGO] [MERRILL LYNCH LOGO]
Call Protection: 100% of the Mortgage Loans contain call protection
provisions. The Mortgage Loans are generally prepayable
without penalty within six months from Mortgage Loan
maturity. 131 of the Mortgage Loans, or approximately
94.3% of the Cut-Off Date Pool Balance, allow
defeasance.
Prepayment Premiums:
PERCENT OF REMAINING BALANCE ANALYSIS*
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Prepayment Premium Dec-1999 Dec-2000 Dec-2001 Dec-2002 Dec-2003 Dec-2004 Dec-2005 Dec-2006 Dec-2007 Dec-2008
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Lock-out/Defeasance 100.00 97.05 97.13 96.63 96.72 96.80 96.89 97.00 95.10 96.80
- ------------------------------------------------------------------------------------------------------------------------------------
YM 0.00 2.95 2.87 3.37 3.28 3.20 3.11 3.00 2.91 2.89
- ------------------------------------------------------------------------------------------------------------------------------------
Sub Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 98.01 99.70
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
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 0.00 1.99 0.30
- ------------------------------------------------------------------------------------------------------------------------------------
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.
16
<PAGE>
[FIRST UNION LOGO] [MERRILL LYNCH LOGO]
COLLATERAL CHARACTERISTICS (CONTINUED):
PROPERTY TYPES
- --------------------------------------------------------------------------------
Number of Cut-off Date
Loans Balance Percent of Balance
- --------------------------------------------------------------------------------
Retail - Anchored 23 185,297,183 23.7%
- --------------------------------------------------------------------------------
Retail - Unanchored 17 49,089,800 6.3%
- --------------------------------------------------------------------------------
Retail - Shadow Anchored 5 36,388,985 4.6%
- --------------------------------------------------------------------------------
Multifamily 52 266,095,335 34.0%
- --------------------------------------------------------------------------------
Office 12 85,434,050 10.9%
- --------------------------------------------------------------------------------
Hospitality 7 56,349,717 7.2%
- --------------------------------------------------------------------------------
Congregate Care 2 26,392,016 3.4%
- --------------------------------------------------------------------------------
CTL - Hospitality 6 23,721,283 3.0%
- --------------------------------------------------------------------------------
Mixed Use 5 16,262,114 2.1%
- --------------------------------------------------------------------------------
Self-Storage 6 11,555,773 1.5%
- --------------------------------------------------------------------------------
Industrial 5 10,695,004 1.4%
- --------------------------------------------------------------------------------
CTL - Retail - Anchored 1 9,767,555 1.2%
- --------------------------------------------------------------------------------
Assisted Living 2 4,396,831 0.6%
- --------------------------------------------------------------------------------
Mobile Home Park 2 1,651,658 0.2%
- --------------------------------------------------------------------------------
TOTAL: 145 783,097,304 100.0%
- --------------------------------------------------------------------------------
STATES
- -------------------------------------------------
Number of Cut-off Date Percent of
Properties Balance Balance
- -------------------------------------------------
FL 28 114,451,147 14.6%
- -------------------------------------------------
CA 17 92,536,312 11.8%
- -------------------------------------------------
TX 15 65,289,977 8.3%
- -------------------------------------------------
NV 5 58,311,504 7.4%
- -------------------------------------------------
MD 3 57,006,094 7.3%
- -------------------------------------------------
IL 4 49,039,893 6.3%
- -------------------------------------------------
Other 82 346,462,377 44.2%
- -------------------------------------------------
TOTAL: 154 783,097,304 100.0%
- -------------------------------------------------
CUT-OFF DATE BALANCES ($)
- --------------------------------------------------------------------------------
Number of Cut-off Date
Loans Balance Percent of Balance
- --------------------------------------------------------------------------------
<= 2,000,000 45 53,703,722 6.9%
- --------------------------------------------------------------------------------
2,000,001 - 4,000,000 44 123,416,998 15.8%
- --------------------------------------------------------------------------------
4,000,001 - 6,000,000 16 78,050,276 10.0%
- --------------------------------------------------------------------------------
6,000,001 - 8,000,000 7 50,871,083 6.5%
- --------------------------------------------------------------------------------
8,000,001 - 10,000,000 9 83,542,141 10.7%
- --------------------------------------------------------------------------------
10,000,001 - 15,000,000 13 155,192,169 19.8%
- --------------------------------------------------------------------------------
15,000,001 - 20,000,000 5 84,679,580 10.8%
- --------------------------------------------------------------------------------
20,000,001 - 25,000,000 5 114,253,861 14.6%
- --------------------------------------------------------------------------------
35,000,001 - 40,000,000 1 39,387,474 5.0%
- --------------------------------------------------------------------------------
TOTAL: 145 783,097,304 100.0%
- --------------------------------------------------------------------------------
Min: $211,884 Average: $5,400,671 Max: $39,387,474
- --------------------------------------------------------------------------------
DSCRS (X) (EXCLUDING CTLS)
- ---------------------------------------------------------------
Number of Cut-off Date Percent of
Loans Balance Balance
- ---------------------------------------------------------------
< 1.200 4 9,800,789 1.3%
- ---------------------------------------------------------------
1.200 - 1.299 86 506,556,921 67.6%
- ---------------------------------------------------------------
1.300 - 1.399 26 120,558,383 16.1%
- ---------------------------------------------------------------
1.400 - 1.499 14 78,470,973 10.5%
- ---------------------------------------------------------------
1.500 - 1.599 4 19,487,250 2.6%
- ---------------------------------------------------------------
1.600 - 1.799 3 13,736,360 1.8%
- ---------------------------------------------------------------
> 1.799 1 997,790 0.1%
- ---------------------------------------------------------------
TOTAL: 138 749,608,465 100.0%
- ---------------------------------------------------------------
Min: 1.15x Wtd. Average: 1.28x Max: 2.00x
- ---------------------------------------------------------------
CUT-OFF DATE LTVS (EXCLUDING CTLS)
-----------------------------------------------------------
Number Cut-off Date Percent of
of Loans Balance Balance
-----------------------------------------------------------
< 55.01 4 5,603,092 0.7%
-----------------------------------------------------------
55.01 - 60.00 6 25,960,959 3.5%
-----------------------------------------------------------
60.01 - 65.00 13 62,574,150 8.3%
-----------------------------------------------------------
65.01 - 70.00 20 92,941,695 12.4%
-----------------------------------------------------------
70.01 - 75.00 46 195,619,470 26.1%
-----------------------------------------------------------
75.01 - 80.00 42 318,838,015 42.5%
-----------------------------------------------------------
80.01 - 81.00 4 43,514,429 5.8%
-----------------------------------------------------------
> 81.00 3 4,556,656 0.6%
-----------------------------------------------------------
TOTAL: 138 $749,608,465 100.00%
-----------------------------------------------------------
Min: 39.91% Wtd. Average: 73.40% Max: 89.66%
-----------------------------------------------------------
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.
17
<PAGE>
[FIRST UNION LOGO] [MERRILL LYNCH LOGO]
COLLATERAL CHARACTERISTICS (CONTINUED):
- ---------------------------------------
Mortgage Rates (%)
- ---------------------------------------------------------------
Number Cut-off Date Percent of
of Loans Balance Balance
- ---------------------------------------------------------------
< 7.250 8 42,069,607 5.4%
- ---------------------------------------------------------------
7.250 - 7.749 8 49,207,937 6.3%
- ---------------------------------------------------------------
7.750 - 8.249 22 186,756,400 23.8%
- ---------------------------------------------------------------
8.250 - 8.749 66 403,396,356 51.5%
- ---------------------------------------------------------------
8.750 - 8.999 23 74,499,369 9.5%
- ---------------------------------------------------------------
9.000 - 9.249 18 27,167,636 3.5%
- ---------------------------------------------------------------
TOTAL: 145 783,097,304 100.0%
- ---------------------------------------------------------------
Min: 6.977% Wtd. Average: 8.299% Max: 9.625%
- ---------------------------------------------------------------
ORIGINAL TERMS TO STATED MATURITY OR ARD (MOS)
- ---------------------------------------------------------------
Number of Cut-off Date Percent of
Loans Balance Balance
- ---------------------------------------------------------------
< 108 2 18,494,597 2.4%
- ---------------------------------------------------------------
109 - 132 121 657,711,656 84.0%
- ---------------------------------------------------------------
133 - 156 6 32,178,975 4.1%
- ---------------------------------------------------------------
157 - 216 10 54,656,695 7.0%
- ---------------------------------------------------------------
217 - 240 1 1,721,507 0.2%
- ---------------------------------------------------------------
> 240 5 18,333,873 2.3%
- ---------------------------------------------------------------
TOTAL: 145 783,097,304 100.0%
- ---------------------------------------------------------------
Min: 59 Wtd. Average: 131 Max: 360
- ---------------------------------------------------------------
REMAINING TERMS TO STATED MATURITY OR ARD (MOS)
- -------------------------------------------------------------
Number Cut-off Date Percent of
of Loans Balance Balance
- -------------------------------------------------------------
< 108 3 20,977,416 2.7%
- -------------------------------------------------------------
109 - 144 125 685,097,851 87.5%
- -------------------------------------------------------------
145 - 180 5 33,245,373 4.2%
- -------------------------------------------------------------
181 - 240 7 25,442,791 3.2%
- -------------------------------------------------------------
> 240 5 18,333,873 2.3%
- -------------------------------------------------------------
TOTAL: 145 783,097,304 100.0%
- -------------------------------------------------------------
Min: 54 Wtd. Average: 127 Max: 352
- -------------------------------------------------------------
ORIGINAL AMORTIZATION TERMS (MOS)
- ---------------------------------------------------------------
Number of Cut-off Date Percent of
Loans Balance Balance
- ---------------------------------------------------------------
215 - 276 8 29,513,002 3.8%
- ---------------------------------------------------------------
277 - 336 24 61,517,675 7.9%
- ---------------------------------------------------------------
337 - 360 113 692,066,627 88.4%
- ---------------------------------------------------------------
TOTAL: 145 783,097,304 100.0%
- ---------------------------------------------------------------
Min: 216 Wtd. Average: 352 Max: 360
- ---------------------------------------------------------------
REMAINING AMORTIZATION TERMS (MOS)
- --------------------------------------------------------------
Number Cut-off Date Percent of
of Loans Balance Balance
- --------------------------------------------------------------
215 - 276 8 29,513,002 3.8%
- --------------------------------------------------------------
277 - 336 24 61,517,675 7.8%
- --------------------------------------------------------------
337 - 360 113 692,066,627 88.4%
- --------------------------------------------------------------
TOTAL: 145 783,097,304 100.0%
- --------------------------------------------------------------
Min: 211 Wtd. Average: 348 Max: 360
- --------------------------------------------------------------
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.
18
<PAGE>
[FIRST UNION LOGO] [MERRILL LYNCH LOGO]
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 (or whose parent or
other affiliate which guarantees the lease
obligation) which 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,
other than any balloon payment, which a residual
value insurance policy.
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 4.3% 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 1105 Pensacola Accor SA Hospitality $2,533,516 BBB B
Motel 6 270 Pismo Beach Accor SA Hospitality $3,750,686 BBB B
Motel 6 28 St. Barb Goleta Accor SA Hospitality $5,580,948 BBB B
Motel 6 414 Gainesville Accor SA Hospitality $3,921,991 BBB B
Motel 6 525 Cleveland Macedonia Accor SA Hospitality $2,803,998 BBB B
Motel 6 69 Cocoa Beach Accor SA Hospitality $5,130,145 BBB B
Giant Fredericksburg Giant Food, Inc. Retail $9,767,555 Private NNN
-----------------------------------------------------------------------------------------------------
Total: $33,488,838
-----------------------------------------------------------------------------------------------------
</TABLE>
Notes: (1) Unless otherwise indicated, such ratings were
the highest assigned to the applicable Tenant
or Guarantor, as applicable, by S&P.
(2) "B" means bond-type lease ; "NNN" means
triple net 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.
19
