UNDERWRITERS' STATEMENT
PRELIMINARY STRUCTURAL AND COLLATERAL TERM SHEET
FIRST UNION NATIONAL BANK COMMERCIAL MORTGAGE TRUST
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C2
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 on the attached Term Sheet (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and will be superseded by the applicable prospectus supplement and by any other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 MERRILL LYNCH
New CMBS Issue
Preliminary Term Sheet
----------
$1,039,965,000
OFFERED CERTIFICATES (Approximate)
FIRST UNION NATIONAL BANK
COMMERCIAL MORTGAGE TRUST
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C2
First Union Commercial Mortgage Securities, Inc., as Depositor
First Union National Bank, as Master Servicer
----------
First Union National Bank, Mortgage Loan Originator
Merrill Lynch Mortgage Capital Inc. and Merrill Lynch Mortgage
Lending, Inc., Mortgage Loan Originator
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 MERRILL LYNCH
Structural and Collateral Term Sheet
FIRST UNION NATIONAL BANK
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C2
$1,039,965,000
Offered Certificates (Approximate)
PERCENTAGE OF MORTGAGE POOL BY CUT-OFF DATE BALANCE
[MAP]
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
--------------------------------------------------------------------------------
This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and
solicitations of offers to buy securities are made only by, and this information
must be read in conjunction with, the final prospectus supplement and the
related prospectus or, if not registered under the securities laws, the final
offering memorandum (the "Offering Document"), and any such decision to invest
in such securities should be made solely in reliance upon such Offering
Document. Information contained herein does not purport to be complete and is
subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and
representations and other precautionary matters, as disclosed in the Offering
Document. Capitalized terms used but not defined herein have the respective
meanings set forth in the related preliminary prospectus supplement. Information
regarding the underlying assets has been provided by the issuer of the
securities or an affiliate thereof and has not been independently verified by
the underwriters or their respective affiliates. This information was prepared
on the basis of certain assumptions (including in certain case assumptions
specified by the recipient hereof) regarding payments, interest rates, weighted
average lives and weighted average loan age, loss and other matters including
but not limited to, the assumptions described in the Offering Document, the
underwriters, and any of their respective affiliates make no representation or
warranty as to the actual rate or timing of payments on any of the underlying
assets or the payments or yield on the securities. This information supercedes
any prior versions hereof, will be deemed to be superseded by any subsequent
versions (including with respect to any description of the securities or the
underlying assets, the information contained in the Offering Document), and will
deemed superseded, amended and supplemented in their entirety by such final
Offering Document.
2
<PAGE>
<TABLE>
<CAPTION>
FIRST UNION MERRILL LYNCH
FIRST UNION NATIONAL BANK COMMERCIAL MORTGAGE TRUST
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C2
----------------------------------------------------------------------------------------------------------------------------------
Pass-
Cut-off Date Cut-off Date Through
CLASS Certificate Subordination Rating Average Principal Rate
Balance(1) Level (S&P/Fitch) Life(yrs.)(2) Window(2) Description(3)
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
A-1 $187,400,000 23.500% AAA/AAA 5.70 Dec00-Apr10 Fixed Rate
A-2 $686,856,000 23.500% AAA/AAA 9.61 Apr10-Sep10 Fixed Rate
B $55,713,000 18.625% AA/AA 9.80 Sep10-Sep10 Fixed Rate(4)
C $42,855,000 14.875% A/A 9.80 Sep10-Sep10 Fixed Rate(4)
D $17,143,000 13.375% A-/A- 9.80 Sep10-Sep10 Fixed Rate(4)
E $18,571,000 11.750% BBB+/BBB+ 9.80 Sep10-Sep10 WAC(3)
F $17,142,000 10.250% BBB/BBB 9.81 Sep10-Oct10 WAC(3)
G $14,285,000 9.000% BBB-/BBB- 9.88 Oct10-Oct10 WAC(3)
H(5) $38,570,000 5.625% 9.88 Oct10-Oct10 Fixed Rate
J(5) $8,571,000 4.875% 9.88 Oct10-Oct10 Fixed Rate
K(5) $8,572,000 4.125% 9.88 Oct10-Oct10 Fixed Rate
L(5) $15,713,000 2.750% 9.89 Oct10-Apr11 Fixed Rate
M(5) $5,714,000 2.250% 11.33 Apr11-Apr12 Fixed Rate
N(5) $5,714,000 1.750% 11.38 Apr12-Apr12 Fixed Rate
O(5) $20,000,332 --- 11.61 Apr12-Sep12 Fixed Rate
IO(6) $1,142,819,332 N/A 9.07 Dec00-Sep12 WAC-IO
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) In the case of each such Class, subject to a permitted variance of plus or
minus 5%.
(2) Based on no prepayments and the other set forth under "YIELD AND MATURITY
CONSIDERATIONS--Weighted Average Life" in the Prospectus Supplement.
(3) Other than the Class E, F and G 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 G Certificates will accrue interest at
the Weighted Average Net Mortgage Rate less .45%, .40% and .10%, respectively.
The final pass-through rates will be determined at pricing.
(4) The pass-through rate for the Class B, C and D Certificates will be capped
at the Weighted Average Net Mortgage Rate.
(5) Not offered hereby.
(6) The Class IO certificates will be offered to investors in private
transactions under Rule 144A of the Securities Act of 1933, as amended. Any
information provided herein regarding the terms of these Certificates is
provided only to enhance your understanding of the Offered Certificates. The
Class IO Certificates will not have a certificate balance and their holders will
not receive distributions principal, but such holders are entitled to receive
payments of the aggregate interest accrued on the notional amount of each of the
components of the Class IO certificates as described in the prospectus
supplement. The interest rate applicable to each component of the Class IO
certificates for each distribution date will equal the excess, if any, of the
weighted average net mortgage rate of the mortgage loans for such distribution
date over the passthrough rate then applicable to the corresponding class of
certificates entitled to receive distributions of principal.
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
--------------------------------------------------------------------------------
This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and
solicitations of offers to buy securities are made only by, and this information
must be read in conjunction with, the final prospectus supplement and the
related prospectus or, if not registered under the securities laws, the final
offering memorandum (the "Offering Document"), and any such decision to invest
in such securities should be made solely in reliance upon such Offering
Document. Information contained herein does not purport to be complete and is
subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and
representations and other precautionary matters, as disclosed in the Offering
Document. Capitalized terms used but not defined herein have the respective
meanings set forth in the related preliminary prospectus supplement. Information
regarding the underlying assets has been provided by the issuer of the
securities or an affiliate thereof and has not been independently verified by
the underwriters or their respective affiliates. This information was prepared
on the basis of certain assumptions (including in certain case assumptions
specified by the recipient hereof) regarding payments, interest rates, weighted
average lives and weighted average loan age, loss and other matters including
but not limited to, the assumptions described in the Offering Document, the
underwriters, and any of their respective affiliates make no representation or
warranty as to the actual rate or timing of payments on any of the underlying
assets or the payments or yield on the securities. This information supercedes
any prior versions hereof, will be deemed to be superseded by any subsequent
versions (including with respect to any description of the securities or the
underlying assets, the information contained in the Offering Document), and will
deemed superseded, amended and supplemented in their entirety by such final
Offering Document.
3
<PAGE>
ISSUE CHARACTERISTICS:
Issue Type: The Class A-1, A-2, B, C, D, E, F and G
Certificates (the "Offered Certificates") will be
offered pursuant to the Preliminary Prospectus
Supplement, subject to completion, dated November
2, 2000 and accompanying Prospectus dated November
2, 2000, and the Class H, J, K, L, M, N, O and IO
Certificates are not offered thereby. The Class IO
Certificates will be offered separately in private
transactions under Section 144A of the Securities
Act of 1933, as amended.
Offered Certificates: $1,039,965,000 monthly pay, multi-class commercial
mortgage REMIC Pass-Through Certificates, including
two fixed-rate principal and interest Classes
(Classes A-1 and A-2), three fixed-rate principal
and interest Classes capped at the weighted average
net mortgage rate (Classes B, C, and D) and three
variable rate principal and interest Classes
(Classes E, F, and G). The Class E, F and G
Certificates will accrue interest at the Weighted
Average Net Mortgage Rate less .45%, .40% and .10%,
respectively. The final pass-through rates will be
determined at pricing. The Offered Certificates
have not been previously offered to the public.
Collateral: The collateral consists of a $1,142,819,332 pool of
162 fixed-rate commercial and multifamily Mortgage
Loans. There are no Credit Tenant Lease loans.
Loan Seller: First Union National Bank
Loan Originators: First Union National Bank (83.0%), Merrill Lynch
Mortgage Capital Inc. and Merrill Lynch Mortgage
Lending, Inc., collectively (17.0%).
Co-Lead Managers: First Union Securities, Inc. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated.
Book-Running Manager: First Union Securities, Inc.
Master Servicer: First Union National Bank.
Special Servicer: First Union National Bank.
Trustee: Wells Fargo Bank Minnesota, N.A.
Expected Settle Date: On or about November 29, 2000.
Distribution Dates: The 15th of each month. The first Distribution Date
on which investors will be entitled to
distributions will be in December 2000.
Minimum Denominations: $10,000 for all Offered Certificates.
ERISA Considerations: Under current law, Class A-1, and Class A-2
Certificates are expected to be ERISA eligible. If
the Department of Labor's proposed amendment to the
existing ERISA laws are enacted, the Class B, C, D,
E, F and G Certificates are expected to be ERISA
eligible.
SMMEA Eligibility: Class A-1, Class A-2, 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 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>
STRUCTURAL CHARACTERISTICS:
The Class A1 and A2 Offered Certificates are fixed rate, monthly pay,
multi-class, sequential pay REMIC Pass-Through Certificates. The Class B, C, and
D Certificates will accrue interest at the lesser of the rate set forth in the
Prospectus Supplement and the applicable weighted average net mortgage rate of
the mortgage loans for such Distribution Date. The Class E, F, and G
Certificates will accrue interest at the weighted average net mortgage rate of
the mortgage loans less .45%, .40% and .10%, respectively. All Classes of
Certificates derive their cash flows from the entire pool of Mortgage Loans.
Interest Distributions: Each Class of Offered 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.
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 O 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.
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>
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:
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, 2009)
Yield Maintenance Charge Payable: $500,000
Discount Rate/Treasury Yield (monthly): 5.00%
Certificate Characteristics: Class A-1 Pass-Through
Rate: 6.00%
<TABLE>
<CAPTION>
Discount Rate Fraction Calculation:
-------------------------------------------------------------------------------------------------
Class A-1 Class IO
-------------------------------------------------------------------------------------------------
<S> <C> <C>
(Class A-1 Pass-Through Rate
- Discount Rate) / (Gross 6.00% - 5.00% = 33.33%
Mortgage Rate - Discount Rate) 8.00% - 5.00%
-------------------------------------------------------------------------------------------------
Portion of Yield 100.00% - 33.33%=
Maintenance Premium 33.33% 66.67%
allocated to Class A-1
-------------------------------------------------------------------------------------------------
YM Charges Allocated $166,667 $333,333
-------------------------------------------------------------------------------------------------
</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.
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>
Realized Losses and
Expense Losses: Realized Losses and Additional Trust Fund Expenses,
if any, will be allocated to the Class O, 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. Realized Losses and Additional
Trust Fund Expenses attributed to the Schneider loan
will first be allocated to the Class Q Certificates,
the subordinate component of such loan not offered
hereby, and then continue through the classes as
indicated above (see Prospectus Supplement).
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 a
Master Servicing Fee Rate of 0.025% of the Master
Servicing Fee Rate on the related mortgage loans 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.
Appraisal Reductions: An appraisal reduction generally will be created in
the amount, if any, by which the Principal Balance of
a Required Appraisal 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. As a result of
calculating an Appraisal Reduction Amount for a given
Mortgage Loan, the P&I Advance for such loan will be
reduced, which will have the effect of reducing the
amount of interest available for distribution to the
Subordinate Certificates in reverse alphabetical
order of the Classes. 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 5% 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.
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>
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.
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 depending on whether the related Mortgage
Loan is a Specially Serviced Mortgage Loan or not.
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.
Summary: As of the Cut-Off Date, the Mortgage Pool consists of
a $1,142,819,332 pool of 162 fixed-rate, first lien
mortgage loans secured by liens on commercial and
multifamily properties located throughout 31 states,
with a weighted average Mortgage Rate of 8.421% and a
weighted average remaining term to maturity or
anticipated repayment date of 113 months. See the
Prospectus Supplement for more detailed collateral
information.
Initial Pool Balance: $1,142,819,332
Number of Loans: 162
Number of Properties 162
Gross WAC: 8.421%
Original WAM: 117
Remaining WAM: 113
Average Loan Balance: $7,054,440
WA DSCR: 1.35x
WA Cut-off Date LTV Ratio: 68.09%
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
--------------------------------------------------------------------------------
This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and
solicitations of offers to buy securities are made only by, and this information
must be read in conjunction with, the final prospectus supplement and the
related prospectus or, if not registered under the securities laws, the final
offering memorandum (the "Offering Document"), and any such decision to invest
in such securities should be made solely in reliance upon such Offering
Document. Information contained herein does not purport to be complete and is
subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and
representations and other precautionary matters, as disclosed in the Offering
Document. Capitalized terms used but not defined herein have the respective
meanings set forth in the related preliminary prospectus supplement. Information
regarding the underlying assets has been provided by the issuer of the
securities or an affiliate thereof and has not been independently verified by
the underwriters or their respective affiliates. This information was prepared
on the basis of certain assumptions (including in certain case assumptions
specified by the recipient hereof) regarding payments, interest rates, weighted
average lives and weighted average loan age, loss and other matters including
but not limited to, the assumptions described in the Offering Document, the
underwriters, and any of their respective affiliates make no representation or
warranty as to the actual rate or timing of payments on any of the underlying
assets or the payments or yield on the securities. This information supercedes
any prior versions hereof, will be deemed to be superseded by any subsequent
versions (including with respect to any description of the securities or the
underlying assets, the information contained in the Offering Document), and will
deemed superseded, amended and supplemented in their entirety by such final
Offering Document.
8
<PAGE>
<TABLE>
<CAPTION>
POOL SUMMARY BY PROPERTY TYPE
----------------------------------------------------------------------------------------------------------------------------------
WTD. PERCENT WTD. AVG.
AVG. OF WTD. WTD. WTD. WTD. ORIGINAL
NUMBER MORTGAGE CUT-OFF AVG. AVG. WTD. AVG. AVG. LOAN PER
PROPERTY TYPE OF LOANS CUT-OFF BALANCE RATE BALANCE LTV BLTV AVG. RTM DSCR OCCUPANCY(1) UNIT
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Anchored 19 $260,970,310 8.457% 22.8% 71.82% 65.13% 114 1.30x 95.72% $101
Unanchored 17 63,590,410 8.417 5.6 69.26 63.32 106 1.32 96.88 136
Shadow Anchored 4 14,580,769 8.585 1.3 74.19 67.39 115 1.28 94.97 111
-- ---------- ----- --- ----- ----- --- ---- ----- ---
Retail -Total 40 339,141,490 8.455 29.7 71.45 64.89 113 1.30 95.91 108
----------------------------------------------------------------------------------------------------------------------------------
Office 39 295,816,595 8.321 25.9 66.02 60.78 114 1.32 97.93 120
----------------------------------------------------------------------------------------------------------------------------------
Multifamily 43 272,237,946 8.248 23.8 70.71 65.92 115 1.36 95.06 51,068
----------------------------------------------------------------------------------------------------------------------------------
Full Service 5 86,915,293 8.759 7.6 61.45 51.36 115 1.46 N/A 72,828
Extended Stay 6 24,184,464 9.000 2.1 50.80 43.07 119 1.74 N/A 37,950
-- ---------- ----- --- ----- ----- --- ---- --- ------
Hospitality--Total 11 111,099,757 8.812 9.7 59.13 49.56 116 1.52 N/A 65,236
----------------------------------------------------------------------------------------------------------------------------------
Industrial 10 66,642,673 8.491 5.8 66.35 60.55 102 1.41 99.23 72
----------------------------------------------------------------------------------------------------------------------------------
Self Storage 11 20,583,328 8.820 1.8 61.91 52.47 113 1.30 89.77 154
----------------------------------------------------------------------------------------------------------------------------------
Healthcare 4 19,252,689 8.669 1.7 75.91 69.12 114 1.35 96.77 66,031
----------------------------------------------------------------------------------------------------------------------------------
Mixed Use 3 17,016,073 8.633 1.5 58.59 57.79 118 1.40 100.00 210
----------------------------------------------------------------------------------------------------------------------------------
Mobile Home Park 1 1,028,782 8.760 0.1 79.75 72.80 113 1.26 90.34 7,117
----------------------------------------------------------------------------------------------------------------------------------
Totals/Weighted 162 $1,142,819,332 8.421% 100.0% 68.09% 62.08% 113 1.35x 96.44% ---
Average
----------------------------------------------------------------------------------------------------------------------------------
(1) Occupancy rates were calculated without reference to hospitality properties.
</TABLE>
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
--------------------------------------------------------------------------------
This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and
solicitations of offers to buy securities are made only by, and this information
must be read in conjunction with, the final prospectus supplement and the
related prospectus or, if not registered under the securities laws, the final
offering memorandum (the "Offering Document"), and any such decision to invest
in such securities should be made solely in reliance upon such Offering
Document. Information contained herein does not purport to be complete and is
subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and
representations and other precautionary matters, as disclosed in the Offering
Document. Capitalized terms used but not defined herein have the respective
meanings set forth in the related preliminary prospectus supplement. Information
regarding the underlying assets has been provided by the issuer of the
securities or an affiliate thereof and has not been independently verified by
the underwriters or their respective affiliates. This information was prepared
on the basis of certain assumptions (including in certain case assumptions
specified by the recipient hereof) regarding payments, interest rates, weighted
average lives and weighted average loan age, loss and other matters including
but not limited to, the assumptions described in the Offering Document, the
underwriters, and any of their respective affiliates make no representation or
warranty as to the actual rate or timing of payments on any of the underlying
assets or the payments or yield on the securities. This information supercedes
any prior versions hereof, will be deemed to be superseded by any subsequent
versions (including with respect to any description of the securities or the
underlying assets, the information contained in the Offering Document), and will
deemed superseded, amended and supplemented in their entirety by such final
Offering Document.
9
<PAGE>
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:
<TABLE>
<CAPTION>
TEN LARGEST MORTGAGE LOANS BY CUT-OFF BALANCE
----------------------------------------------------------------------------------------------------------------------------------
Percent
by Cut-
off Date Cut-off LTV at Cut-of
No. of Cut-Off Date Pool Property Date Maturity Date Mortgage
Loan Name Prop. Balance Balance Type LTV or ARD DSCR Rate
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Polaris Towne 1 $42,889,270 3.8% Retail - 79.7% 71.8% 1.25x 8.200%
Center Anchored
----------------------------------------------------------------------------------------------------------------------------------
Park Plaza Mall 1 42,390,617 3.7 Retail - 55.1 50.1 1.54 8.690
Anchored
----------------------------------------------------------------------------------------------------------------------------------
HCPI Portfolio 6 42,000,000 3.7 Office 59.8 56.1 1.40 8.250
----------------------------------------------------------------------------------------------------------------------------------
The Grove at
Turtle Run 1 36,200,000 3.2 Multifamily 74.6 71.6 1.25 8.100
Apartments
----------------------------------------------------------------------------------------------------------------------------------
Schneider
Automation 1 33,930,352 3.0 Industrial 65.3 58.1 1.52 8.410
Facility
----------------------------------------------------------------------------------------------------------------------------------
Desert Club 1 32,000,000 2.8 Multifamily 74.6 69.0 1.30 7.930
Apartments
----------------------------------------------------------------------------------------------------------------------------------
Parkridge 1 31,000,000 2.7 Office 62.8 57.0 1.30 8.210
Center V
----------------------------------------------------------------------------------------------------------------------------------
Belmont Shores 1 29,000,000 2.5 Office 60.4 56.8 1.39 8.290
Office Building
----------------------------------------------------------------------------------------------------------------------------------
Hospitailty
FelCor-Embassy 1 25,459,300 2.2 - Full 67.9 57.2 1.42 8.615
Suites-Orlando Service
----------------------------------------------------------------------------------------------------------------------------------
The Grove At 1 24,657,201 2.2 Retail - 63.2 57.3 1.25 8.500
Shrewsbury Anchored
----------------------------------------------------------------------------------------------------------------------------------
Total/Weighted 15 $339,526,740 29.7% ---- 66.4% 60.7% 1.37x 8.314%
Average
----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
TEN LARGEST MORTGAGE LOANS BY CUT-OFF BALANCE (continued)
--------------------------------------------------------------------------------
Wtd.
Average
Original
Property Loan
Loan Name City State Occupancy Size per Unit
--------------------------------------------------------------------------------
Polaris Towne Columbus OH 100.0% 440,385 SF 98
Center
--------------------------------------------------------------------------------
Park Plaza Mall Little Rock AR 88.4 265,144 SF 160
--------------------------------------------------------------------------------
HCPI Portfolio Var. Var. 95.4 533,362 SF 94
--------------------------------------------------------------------------------
The Grove at
Turtle Run Coral FL 91.0 510 Units 70,980
Apartments Springs
--------------------------------------------------------------------------------
Schneider
Automation North MA 100.0 382,761 SF 89
Facility Andover
--------------------------------------------------------------------------------
Desert Club Las Vegas NV 97.3 658 Units 48,632
Apartments
--------------------------------------------------------------------------------
Parkridge Reston VA 100.0 203,492 SF 152
Center V
--------------------------------------------------------------------------------
Belmont Shores Belmont CA 100.0 142,496 SF 204
Office Building
--------------------------------------------------------------------------------
FelCor-Embassy Orlando FL 85.7 244 Rooms 104,848
Suites-Orlando
--------------------------------------------------------------------------------
The Grove At Shrewsbury NJ 98.7 148,171 SF 167
Shrewsbury
--------------------------------------------------------------------------------
Total/Weighted --- --- 96.4% --- ---
Average
--------------------------------------------------------------------------------
</TABLE>
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
--------------------------------------------------------------------------------
This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and
solicitations of offers to buy securities are made only by, and this information
must be read in conjunction with, the final prospectus supplement and the
related prospectus or, if not registered under the securities laws, the final
offering memorandum (the "Offering Document"), and any such decision to invest
in such securities should be made solely in reliance upon such Offering
Document. Information contained herein does not purport to be complete and is
subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and
representations and other precautionary matters, as disclosed in the Offering
Document. Capitalized terms used but not defined herein have the respective
meanings set forth in the related preliminary prospectus supplement. Information
regarding the underlying assets has been provided by the issuer of the
securities or an affiliate thereof and has not been independently verified by
the underwriters or their respective affiliates. This information was prepared
on the basis of certain assumptions (including in certain case assumptions
specified by the recipient hereof) regarding payments, interest rates, weighted
average lives and weighted average loan age, loss and other matters including
but not limited to, the assumptions described in the Offering Document, the
underwriters, and any of their respective affiliates make no representation or
warranty as to the actual rate or timing of payments on any of the underlying
assets or the payments or yield on the securities. This information supercedes
any prior versions hereof, will be deemed to be superseded by any subsequent
versions (including with respect to any description of the securities or the
underlying assets, the information contained in the Offering Document), and will
deemed superseded, amended and supplemented in their entirety by such final
Offering Document.
10
<PAGE>
POLARIS TOWNE CENTER:
The Polaris Towne Center loan is secured by a first lien mortgage on a
440,385 square foot anchored retail center located in Columbus, Ohio. The
property was constructed during 1998-1999. The loan has an Anticipated Repayment
Date of June 1, 2010 and a Maturity Date of June 1, 2030.
As of August 31, 2000 the property was approximately 100% leased by 39
tenants which included Kroger, Barnes & Noble, Best Buy, Joann Etc., Linens N
Things, Office Max, Old Navy and TJ Maxx. Those eight tenants occupy 69.5% of
the retail space in the center.
The following table summarizes the breakdown of the gross leasable area
("GLA") of the eight largest tenants at Polaris Towne Center:
<TABLE>
<CAPTION>
------------------------ ---------------------- -------------------- --------------------------
TENANT GLA DATE OF LEASE EXPIRATION
TENANT NAME (IN SQUARE FEET) % OF GLA
------------------------ ---------------------- -------------------- --------------------------
<S> <C> <C> <C> <C>
Kroger 64,280 14.6 11/30/2018
------------------------ ---------------------- -------------------- --------------------------
Joann Etc. 45,650 10.4 01/31/2010
------------------------ ---------------------- -------------------- --------------------------
Best Buy 45,000 10.2 01/31/2015
------------------------ ---------------------- -------------------- --------------------------
Linens `N Things 35,000 7.9 01/31/2015
------------------------ ---------------------- -------------------- --------------------------
TJ Maxx 30,000 6.8 03/31/2009
------------------------ ---------------------- -------------------- --------------------------
Old Navy 25,200 5.7 01/31/2010
------------------------ ---------------------- -------------------- --------------------------
Office Max 23,500 5.3 09/30/2014
------------------------ ---------------------- -------------------- --------------------------
Barnes & Noble 23,367 5.3 01/31/2015
------------------------ ---------------------- -------------------- --------------------------
</TABLE>
At any time during the term of the loan, the borrower is required to notify
all tenants that any and all tenant payments due under the applicable tenant
leases shall be directly deposited into a lender designated lockbox account (i)
if the trailing 12 month debt service coverage ratio, as computed by the lender,
is less than 1.20x, (ii) upon the occurrence of an event of default, or (iii)
two months prior to the anticipated repayment date.
The borrower is Polaris Center, LLC, a special purpose, bankruptcy remote
Delaware limited liability company. The sponsor of the borrower is Glimcher
Realty Trust, a real estate investment trust headquartered in Columbus, Ohio,
which has an issuer debt rating from S&P of "BB" as of the date of this
prospectus supplement. The sponsor owns or is a joint venturer in 126 properties
located in 28 states.
PARK PLAZA MALL:
The Park Plaza Mall loan is secured by a first lien mortgage on 265,144
square feet of retail space within the 549,309 square foot Park Plaza Mall, a
regional mall located in Little Rock, Arkansas. The Park Plaza Mall is anchored
by Dillard's Department Store, which owns and occupies the remaining 284,165
square feet of retail space and maintains its corporate headquarters within
close proximity of the Park Plaza Mall. The Dillard's Department Stores space is
not part of the collateral securing this loan.
The Anticipated Repayment Date for the loan is May 1, 2010 and the Maturity
Date of the loan is May 1, 2030.
The weighted average sales of the in-line tenants of the property have
increased each of the last four years, and exceeded $400 per square foot in
1999.
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>
As of August 31, 2000, the property was approximately 88% occupied by 77
tenants. The occupancy rate reflects the recent termination of the United
Artists Theatre lease for space that comprised approximately 9% of the retail
space within the property. The lender required the borrower to escrow $300,000
for tenant improvement costs associated with the reletting of the United Artist
space. The largest tenants include Gap, Gap Kids, Banana Republic, The Limited,
Abercombie & Fitch and Talbots and Talbots Petite. Gap, Gap Kids and Banana
Republic, which when combined represent the largest tenant, occupy approximately
11.8% of the retail space within the mortgaged property; and The Limited, the
second largest tenant, occupies approximately 5.9%. No other tenant occupies
more than 5.0% of the retail space within the mortgaged property.
The following table summarizes the breakdown of the net rentable area
("NRA") of the nine largest tenants at Park Plaza Mall:
<TABLE>
<CAPTION>
---------------------------- -------------------------- -------------------------- --------------------------
TENANT NRA DATE OF LEASE EXPIRATION
TENANT NAME (IN SQUARE FEET) % OF NRA
---------------------------- -------------------------- -------------------------- --------------------------
<S> <C> <C> <C>
Gap, Gap Kids, & Banana
Republic 31,374 11.8 04/30/2005
---------------------------- -------------------------- -------------------------- --------------------------
The Limited 15,570 5.9 06/30/2004
---------------------------- -------------------------- -------------------------- --------------------------
Luby's 10,958 4.1 08/31/2008
---------------------------- -------------------------- -------------------------- --------------------------
Abercrombie & Fitch 10,429 3.9 01/30/2008
---------------------------- -------------------------- -------------------------- --------------------------
Talbots, Talbots Petite 7,103 2.7 01/31/2007
---------------------------- -------------------------- -------------------------- --------------------------
Lerner of New York 6,188 2.3 12/31/2003
---------------------------- -------------------------- -------------------------- --------------------------
Lane Bryant 6,024 2.3 12/31/2003
---------------------------- -------------------------- -------------------------- --------------------------
Eddie Bauer 5,799 2.2 12/31/2003
---------------------------- -------------------------- -------------------------- --------------------------
</TABLE>
The borrower is required to notify all tenants to make all tenant payments
to a lender designated lockbox account three months prior to the anticipated
repayment date or at any time during the term of the loan: (i) if the trailing
12 month debt service coverage ratio drops below 1.15x, (ii) upon the occurrence
of an event of default, or (iii) if Dillard's Department Store vacates the Park
Plaza Mall.
The borrower is Park Plaza Mall, LLC, a special purpose, bankruptcy remote
Delaware limited liability company. The sponsor of the borrower is First Union
Real Estate Investment Trust, which is headquartered in Cleveland, Ohio and is
not affiliated with the mortgage loan seller. The property is managed by Landau
& Heyman of Chicago, Illinois. Landau & Heyman is not affiliated with the
borrower and specializes in the leasing and managing of middle market regional
malls. At origination, Landau & Heyman managed approximately 4 million square
feet of retail space for third party owners, as well as approximately 4 million
square feet of retail space which it owned.
HEALTH CARE PROPERTY INVESTORS, INC. ("HCPI"):
The HCPI Portfolio ("HCPI") loans are secured by first lien mortgages or
deeds of trusts (as applicable) on six medical office properties located in San
Diego, California; Minneapolis, Minnesota; Murfreesboro, Tennessee; Houston,
Texas; and Plano, Texas. All six of the medical office buildings are located in
close proximity to major hospitals in their respective submarkets. The weighted
average debt service coverage ratio for the HCPI Portfolio is 1.40x which ranges
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 MERRILL LYNCH
from 1.28x to 1.66x. The weighted average loan-to-value ratio for the HCPI
Portfolio is 59.8%, which ranges from 49.6% to 65.0%. All of the loans in the
HCPI Portfolio are cross-collateralized and cross-defaulted.
The property improvements were constructed between 1976 and 1986. As of
June 9, 2000, the occupancy rates at the six properties ranged from
approximately 85.3% to 100.0%, with the weighted average occupancy for the
entire HCPI Portfolio being approximately 95.4%. Four of the six buildings
within the pool are multi-tenant buildings, while the remaining two buildings
(Plano, Texas and Murfreesboro, Tennessee) are occupied by single tenants. The
single tenant for the Plano, Texas property is Unicare Life & Health Insurance
Co., a company with an S&P issuer debt rating of "A-" as of the date of this
prospectus supplement.
To mitigate certain risks associated with the single tenant status of the
Murfreesboro, Tennessee property, the lender has required the sponsor to provide
a $3,000,000 payment guaranty, against which the lender may collect if the
borrower fails to make payments under the note. The guaranty is reduced by
$1,000,000 each time that all rental payments and debt service payments are made
in a timely manner for twelve (12) consecutive months.
Under an indemnity and guaranty agreement for the Tennessee loan, the
sponsor has agreed to guarantee a portion of tenant improvement expenses and
leasing commissions in connection with the departure of the initial single
tenant. The maximum amount of the sponsor's guarantee increases by $200,000 each
year from $200,000 at the end of year one up to a maximum of $2 million less the
amount of any cash reserves established by the borrower with the lender for
tenant improvement expenses and leasing commissions and any actual tenant
improvement expenses and leasing commissions paid by the borrower.
Texas HCP Medical Office Buildings, L.P., the borrower for the two Texas
properties, is a special purpose, bankruptcy remote Delaware limited
partnership. HCP Medical Office Buildings II, LLC, the borrower for the
remaining four properties, is a special purpose, bankruptcy remote Delaware
limited liability company. The sponsor of each borrower is Health Care Property
Investors, Inc., a real estate investment trust headquartered in Newport Beach,
California, which is traded on the New York Stock Exchange under the symbol
"HCP" and has an issuer debt rating from S&P of "BBB+" as of the date of this
prospectus supplement. As of December 31, 1999, the sponsor's real estate
portfolio consisted of approximately 428 properties totaling more than 21
million square feet of rental space in 43 states.
THE GROVE AT TURTLE RUN APARTMENTS:
The Grove at Turtle Run Apartments loan is secured by a first lien deed of
trust on a 510 unit apartment complex located in the Turtle Run planned urban
development in Coral Springs, Broward County, Florida. The property improvements
were constructed in 1997 and include 44 two- and three-story buildings located
on approximately 32.42 acres and containing 167 one-bedroom apartments, 239
two-bedroom apartments and 104 three-bedroom apartments. The Grove at Turtle Run
Apartments is a gated community which offers such amenities as two swimming
pools, a jacuzzi, a fitness center, a business center, a library, a party room
and two tennis courts. The loan provides for interest-only payments during the
initial 60 months following origination.
As of October 31, 2000, the property was approximately 97% occupied.
The borrower is Rayman Sutton Place Trust, an Illinois grantor trust. The
Grove at Turtle Run Apartments is managed by Executive Affiliates, Inc., an
affiliate of the borrower. Executive Affiliates, Inc. currently manages 20
multifamily properties comprising 6,100 units nationwide and has managed over
20,000 multifamily units during the past 30 years.
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 MERRILL LYNCH
SCHNEIDER AUTOMATION FACILITY:
The Schneider Automation Facility loan is secured by a first lien mortgage
on the Schneider Automation Facility, which is a 382,761 square foot, single
tenant, industrial research and development facility, located in North Andover
(Essex County), Massachusetts. Located in the North Region submarket created by
the I-495 Beltway/I-93 Interchange, North Andover is positioned 25 miles from
the Boston central business district. This region has become increasingly
desirable to high tech research and development users as the availability of
research and development office space has diminished in the inner Boston
suburbs. The subject is a historical site which was originally built in 1860. It
was renovated in 1984 when Schneider Automation took occupancy as the single
tenant under a lease which expires on July 31, 2013. To mitigate certain risks
associated with the single tenant status of the property, all fixed rent
payments due under the lease have been guaranteed by the tenant's parent,
Schneider Elective S.A., a French based company with an S&P issuer debt rating
of "A+" as of the date of this prospectus supplement.
The loan is structured with a hard lockbox which was established upfront at
closing. In addition, to mitigate against potential rollover risk a full cash
sweep of all excess net operating income (estimated at $52,083 a month) will be
deposited monthly into a lease rollover account during the final four years of
the loan term until this reserve aggregates to the sum of $2,500,000.
The borrower is North Andover High Street Limited Partnership, a
Massachusetts limited partnership which is affiliated with Yale Properties USA.
Since 1991, Yale Properties USA has acquired approximately 5.2 million square
feet of rental space both alone and with Goldman, Blackstone, Chase and other
institutional real estate investors as partners. Yale Properties USA has been
the on-site manager of the property since 1997. The borrower under the Schneider
Automation Facility loan is affiliated with the borrower under the North Andover
Mills loan which is secured by a first lien mortgage on North Andover Mills
which, a 233,283 square foot office facility located in North Andover, MA.
DESERT CLUB APARTMENTS:
The Desert Club Apartments loan is secured by a first lien deed of trust on
a 658 unit apartment complex located in Las Vegas, Nevada. The improvements on
the property were constructed in 1989 and include 21 two- and three-story
buildings located on approximately 19.56 acres, containing 328 one-bedroom
apartments and 330 two-bedroom apartments. Desert Club Apartments is a gated
community, which offers such amenities as five swimming pools, five outdoor
spas, two indoor spas, saunas, a volleyball court, a fitness center, and
racquetball courts. The loan provides for interest-only payments during the
initial 12 months following origination.
As of September 18, 2000, the property was approximately 97% occupied.
The borrower is Desert Club Corp., a special purpose, bankruptcy remote
Nevada corporation affiliated with OLEN Properties Corp. The property is managed
by Realty Services Corp., also an affiliate of OLEN Properties Corp. OLEN
Properties Corp. is a real estate management and development company established
in 1973 and headquartered in Newport Beach, California. At origination, OLEN
Properties Corp. and its affiliates owned approximately 6,400 multifamily units,
with another 1,600 multifamily units under construction. In addition to
multifamily projects, at origination, OLEN Properties Corp. owned approximately
47 office and industrial properties containing over 3 million square feet.
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 MERRILL LYNCH
PARKRIDGE CENTER V OFFICE BUILDING:
The Parkridge Center V Office Building loan is secured by a first lien deed
of trust on a suburban office building located in Reston, Virginia. The
improvements, which consist of 203,492 square feet of newly constructed office
space, were completed in 1999. The loan provides for interest-only payments
during the initial 24 months following origination.
As of July 7, 2000 the property was approximately 100% occupied by 13
tenants. All of the tenants at the property have signed leases that range in
term from eight to ten years from origination. To mitigate any potential
rollover risk in years 8, 9 and 10 of the loan term, the lender has required the
borrower to deposit $200,000 in each of years 6, 7 and 8 of the loan term into a
reserve account to be established with the lender, which reserve is sufficient
to cover a significant portion of the anticipated tenant improvement expenses
and leasing commissions. As further security for the loan, the lender has taken
a collateral assignment of the borrower's interest in the tenants' security
deposits in the approximate amount of $3,300,000.
The following table summarizes the breakdown of the net rentable area
("NRA") of the five largest tenants at Parkridge Center V Office Building:
TENANT NRA DATE OF LEASE
TENANT NAME (IN SQUARE FEET) % OF NRA EXPIRATION
----------------------------------------------------------------------------
CareerBuilder, Inc. 53,718 26.4 01/31/2008
Cysive, Inc. 41,225 20.3 04/14/2010
Musicmaker.com, Inc. 31,261 15.4 01/16/2010
Veritect, Inc. 25,431 12.5 05/31/2009
Telia North America, Inc. 24,451 12.0 05/31/2010
The borrower is Parkridge V Associates Limited Partnership, a special
purpose, bankruptcy remote, Virginia limited partnership. The sponsor of the
borrower is Walker and Company, which at origination owned in excess of 800,000
square feet of office buildings in the Reston and Fairfax County, Virginia area.
The property is managed by Walker Management, Inc., which is affiliated with the
sponsor of the borrower.
BELMONT SHORES OFFICE BUILDING:
The Belmont Shores Office Building loan is secured by a first lien mortgage
on a four-story 142,496 square foot suburban office building located in Belmont,
San Mateo County, California. The property is approximately one half mile from
northern California's mass transit system and sits on 6.95 acres. The property
was constructed in 1983. The loan provides for interest-only payments during the
initial 36 months following origination, after which payments of principal and
interest are due under the loan.
As of July 1, 2000 the property was approximately 100% occupied by 18
tenants. Oracle Corporation, the largest tenant, occupies approximately 62% of
the rental space within the property, and its gross income accounts for
approximately 51.5% of the total gross income from the property. Oracle
Corporation's world headquarters are located within one half mile of the
property. Additionally, The McGraw-Hill Companies, Inc. and First Data Corp.,
taken together, occupy approximately 10% of the rental space within the
property.
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
--------------------------------------------------------------------------------
This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and
solicitations of offers to buy securities are made only by, and this information
must be read in conjunction with, the final prospectus supplement and the
related prospectus or, if not registered under the securities laws, the final
offering memorandum (the "Offering Document"), and any such decision to invest
in such securities should be made solely in reliance upon such Offering
Document. Information contained herein does not purport to be complete and is
subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and
representations and other precautionary matters, as disclosed in the Offering
Document. Capitalized terms used but not defined herein have the respective
meanings set forth in the related preliminary prospectus supplement. Information
regarding the underlying assets has been provided by the issuer of the
securities or an affiliate thereof and has not been independently verified by
the underwriters or their respective affiliates. This information was prepared
on the basis of certain assumptions (including in certain case assumptions
specified by the recipient hereof) regarding payments, interest rates, weighted
average lives and weighted average loan age, loss and other matters including
but not limited to, the assumptions described in the Offering Document, the
underwriters, and any of their respective affiliates make no representation or
warranty as to the actual rate or timing of payments on any of the underlying
assets or the payments or yield on the securities. This information supercedes
any prior versions hereof, will be deemed to be superseded by any subsequent
versions (including with respect to any description of the securities or the
underlying assets, the information contained in the Offering Document), and will
deemed superseded, amended and supplemented in their entirety by such final
Offering Document.
15
<PAGE>
FIRST UNION MERRILL LYNCH
The borrower is F&S Properties, LLC, a special purpose, bankruptcy remote
California limited liability corporation. The property is managed by Foster
Enterprises, which is affiliated with the sponsor.
FELCOR- EMBASSY SUITES- ORLANDO:
The FelCor Embassy Suites Orlando loan is secured by a first lien mortgage
on Embassy Suites International Drive South, located at 8978 International
Drive, Orlando (Orange County), Florida. This eight-story, 244 room, full
service hotel is situated on 4.96 acres and is managed as an Embassy Suites,
which is a brand name of the Promus Hotel Corporation that was recently acquired
by Hilton Hotel Corporation.
The hotel was built in 1985 and acquired by a subsidiary of FelCor Lodging
Trust, Inc., a real estate investment trust in 1995. Historical occupancy levels
were approximately 81.8% and 83.7% in 1998 and 1999, respectively. Average daily
room rates were approximately $132.19 and $135.52 in 1998 and 1999,
respectively. Each suite consists of a private bedroom, and separate living room
with a convertible sofa. Other featured amenities include indoor and outdoor
swimming pools, fitness center, spa, sauna, steam room, gift shop, laundry
services, valet, laundry, video game room and over 7,000 square feet of meeting
space. The hotel is located within 10 minutes of Walt Disney World, Epcot
Center, MGM Studios, Sea World, Universal Studios, Church Street Station, and
downtown Orlando, and less than one mile from the Orange County Convention
Center.
The borrower, FelCor/CMB Orsouth Holdings, L.P., a special purpose,
bankruptcy remote entity, is the owner of the leasehold interest in the
property. The property is operated pursuant to a non-arm's length operating
agreement by and between the borrower and DJONT/CMB Orsouth Leasing, L.L.C. The
borrower and fee owner have both pledged their respective interests in the
property. Both the fee owner and the borrower are owned directly or indirectly
by FelCor Lodging Trust, Inc.
The borrower under the FelCor Embassy Suites Orlando loan is affiliated
with the borrower for the FelCor Embassy Suites Piscataway loan, which is
secured by a first lien mortgage on Embassy Suites Piscataway, a 224 room full
service hotel in Piscataway, New Jersey.
THE GROVE AT SHREWSBURY:
The Grove at Shrewsbury loan is secured by a first lien mortgage on a 20.77
acre retail center containing approximately 148,171 square feet of rental space
located in Shrewsbury, Monmouth County, New Jersey.
As of May 17, 2000 the property was approximately 99% leased by 32 tenants,
which include the following national retailers: Pottery Barn, Gap and Gap Kids,
Banana Republic, Talbots, The Limited, Eddie Bauer, Ann Taylor, Victoria's
Secret, Coach, Brooks Brothers, Nine West, Starbucks Coffee and Williams Sonoma.
The ten largest tenants collectively occupy 92,947 square feet of the retail
space or 62.7% of the total retail space in the center. Sealfons, the largest
tenant, occupies approximately 19.4% of the retail space in the center pursuant
to a lease expiring in January, 2004; Pottery Barn, the second largest tenant,
occupies approximately 7.6% of the retail space in the center pursuant to a
lease expiring in January, 2013; and Gap and Gap Kids, which in the aggregate
are the third largest tenant, occupies approximately 7.3% of the retail space in
the center pursuant to a lease expiring in December 2006.
The property has maintained an occupancy rate of at least 99% for the last
three consecutive years.
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 MERRILL LYNCH
The borrower is Route 35 Shrewsbury Limited Partnership, a special purpose,
bankruptcy remote New Jersey limited partnership. The sponsor of the borrower is
Terranomics Development, a privately owned real estate company headquartered in
Bellevue, Washington. At origination, Terranomics Development managed over 1.4
million square feet of commercial space in Washington, California, New Jersey
and Texas.
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. 147 of the Mortgage Loans, or approximately 91.8%
of the Cut-Off Date Pool Balance, allow defeasance.
<TABLE>
<CAPTION>
PERCENT OF REMAINING BALANCE ANALYSIS*
Nov-00 Nov-01 Nov-02 Nov-03 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Lock-out/Defeasance 100.00 99.14 97.34 93.54 94.12 94.95 94.95 94.16 94.16 79.68
YM 0.00 0.86 2.66 6.46 5.88 4.84 4.84 4.84 4.84 4.98
Sub Total 100.00 100.00 100.00 100.00 100.00 99.79 99.79 99.00 99.00 84.67
Prepayment Premium:
---------------------------------------------------------------------------------------------------------------------------------
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
1.0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.79 0.79 0.81
Open 0.00 0.00 0.00 0.00 0.00 0.21 0.21 0.21 0.21 14.52
---------------------------------------------------------------------------------------------------------------------------------
Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
---------------------------------------------------------------------------------------------------------------------------------
* Numbers represent percentage of outstanding balance as of the date indicated
</TABLE>
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
--------------------------------------------------------------------------------
This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and
solicitations of offers to buy securities are made only by, and this information
must be read in conjunction with, the final prospectus supplement and the
related prospectus or, if not registered under the securities laws, the final
offering memorandum (the "Offering Document"), and any such decision to invest
in such securities should be made solely in reliance upon such Offering
Document. Information contained herein does not purport to be complete and is
subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and
representations and other precautionary matters, as disclosed in the Offering
Document. Capitalized terms used but not defined herein have the respective
meanings set forth in the related preliminary prospectus supplement. Information
regarding the underlying assets has been provided by the issuer of the
securities or an affiliate thereof and has not been independently verified by
the underwriters or their respective affiliates. This information was prepared
on the basis of certain assumptions (including in certain case assumptions
specified by the recipient hereof) regarding payments, interest rates, weighted
average lives and weighted average loan age, loss and other matters including
but not limited to, the assumptions described in the Offering Document, the
underwriters, and any of their respective affiliates make no representation or
warranty as to the actual rate or timing of payments on any of the underlying
assets or the payments or yield on the securities. This information supercedes
any prior versions hereof, will be deemed to be superseded by any subsequent
versions (including with respect to any description of the securities or the
underlying assets, the information contained in the Offering Document), and will
deemed superseded, amended and supplemented in their entirety by such final
Offering Document.
17
<PAGE>
FIRST UNION MERRILL LYNCH
<TABLE>
<CAPTION>
COLLATERAL CHARACTERISTICS (CONTINUED):
Average
Number of Cut-off Date Percent of Loan per
PROPERTY TYPES Loans Balance Balance Unit
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Anchored 19 260,970,310 22.8 101
Unanchored 17 63,590,410 5.6 136
Shadow Anchored 4 14,580,769 1.3 111
-- ----------- ---- ---
Retail--Total 40 339,141,490 29.7 108
---------------------------------------------------------------------------------------------
Office 39 295,816,595 25.9 120
---------------------------------------------------------------------------------------------
Multifamily 43 272,237,946 23.8 51,068
---------------------------------------------------------------------------------------------
Full Service 5 86,915,293 7.6 72,828
Extended Stay 6 24,184,464 2.1 37,950
-- ----------- --- ------
Hospitality--Total 11 111,099,757 9.7 65,236
---------------------------------------------------------------------------------------------
Industrial 10 66,642,673 5.8 72
---------------------------------------------------------------------------------------------
Self Storage 11 20,583,328 1.8 154
---------------------------------------------------------------------------------------------
Healthcare 4 19,252,689 1.7 66,031
---------------------------------------------------------------------------------------------
Mixed Use 3 17,016,073 1.5 210
---------------------------------------------------------------------------------------------
Mobile Home Park 1 1,028,782 0.1 7,117
---------------------------------------------------------------------------------------------
Total: 162 1,142,819,332 100.0 ---
---------------------------------------------------------------------------------------------
CUT-OFF DATE Number of Cut-off Date
BALANCES ($) Loans Balance Percent of Balance
--------------------------------------------------------------------------------
<= 2,000,000 49 64,813,371 5.7
--------------------------------------------------------------------------------
2,000,001 - 4,000,000 32 93,559,462 8.2
--------------------------------------------------------------------------------
4,000,001 - 6,000,000 21 103,926,698 9.1
--------------------------------------------------------------------------------
6,000,001 - 8,000,000 13 92,853,772 8.1
--------------------------------------------------------------------------------
8,000,001 - 10,000,000 11 100,581,778 8.8
--------------------------------------------------------------------------------
10,000,001 - 15,000,000 18 212,873,456 18.6
--------------------------------------------------------------------------------
15,000,001 - 20,000,000 4 68,491,038 6.0
--------------------------------------------------------------------------------
20,000,001 - 25,000,000 6 132,850,219 11.6
--------------------------------------------------------------------------------
25,000,001 - 30,000,000 2 54,459,300 4.8
--------------------------------------------------------------------------------
30,000,001 - 35,000,000 3 96,930,352 8.5
--------------------------------------------------------------------------------
35,000,001 - 40,000,000 1 36,200,000 3.2
--------------------------------------------------------------------------------
40,000,001 - 45,000,000 2 85,279,887 7.5
--------------------------------------------------------------------------------
Total: 162 1,142,819,332 100.0
--------------------------------------------------------------------------------
Min: $513,263 Average: $7,054,440 Max: $42,889,270
--------------------------------------------------------------------------------
Number of Cut-off Date Percent of Number of Cut-off Date Percent of
STATES Properties Balance Balance MORTGAGE RATES Loans Balance Balance
------------------------------------------------------------- --------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
CA 27 154,693,274 13.5 < 8.000 6 85,668,454 7.5
------------------------------------------------------------- --------------------------------------------------------------
VA 17 127,848,546 11.2 8.000 - 8.499 72 567,601,768 49.7
------------------------------------------------------------- --------------------------------------------------------------
MA 20 125,012,526 10.9 8.500 - 8.999 70 438,824,230 38.4
------------------------------------------------------------- --------------------------------------------------------------
FL 12 110,059,875 9.6 > 8.999 14 50,724,880 4.4
------------------------------------------------------------- --------------------------------------------------------------
TX 20 88,235,198 7.7 Total: 162 1,142,819,332 100.0
------------------------------------------------------------- --------------------------------------------------------------
NV 7 79,416,833 6.9 Min: 7.000% Wtd. Average: 8.421% Max: 9.150%
------------------------------------------------------------- --------------------------------------------------------------
Other 59 457,553,079 40.0
-------------------------------------------------------------
Total: 162 1,142,819,332 100.0
-------------------------------------------------------------
</TABLE>
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
--------------------------------------------------------------------------------
This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and
solicitations of offers to buy securities are made only by, and this information
must be read in conjunction with, the final prospectus supplement and the
related prospectus or, if not registered under the securities laws, the final
offering memorandum (the "Offering Document"), and any such decision to invest
in such securities should be made solely in reliance upon such Offering
Document. Information contained herein does not purport to be complete and is
subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and
representations and other precautionary matters, as disclosed in the Offering
Document. Capitalized terms used but not defined herein have the respective
meanings set forth in the related preliminary prospectus supplement. Information
regarding the underlying assets has been provided by the issuer of the
securities or an affiliate thereof and has not been independently verified by
the underwriters or their respective affiliates. This information was prepared
on the basis of certain assumptions (including in certain case assumptions
specified by the recipient hereof) regarding payments, interest rates, weighted
average lives and weighted average loan age, loss and other matters including
but not limited to, the assumptions described in the Offering Document, the
underwriters, and any of their respective affiliates make no representation or
warranty as to the actual rate or timing of payments on any of the underlying
assets or the payments or yield on the securities. This information supercedes
any prior versions hereof, will be deemed to be superseded by any subsequent
versions (including with respect to any description of the securities or the
underlying assets, the information contained in the Offering Document), and will
deemed superseded, amended and supplemented in their entirety by such final
Offering Document.
18
<PAGE>
FIRST UNION MERRILL LYNCH
<TABLE>
<CAPTION>
COLLATERAL CHARACTERISTICS (CONTINUED):
DSCRS (X) CUT-OFF DATE LTVS
--------------------------------------------------------------- ---------------------------------------------------------------
Number of Cut-off Date Percent of Number Cut-off Date Percent of
Loans Balance Balance of Loans Balance Balance
--------------------------------------------------------------- ---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1.20 - 1.24 31 263,329,343 23.0 < 50.01 20 64,570,232 5.7
--------------------------------------------------------------- ---------------------------------------------------------------
1.25 - 1.34 78 491,024,021 43.0 50.01 - 55.00 12 84,536,739 7.4
--------------------------------------------------------------- ---------------------------------------------------------------
1.35 - 1.44 13 134,233,880 11.7 55.01 - 60.00 11 88,138,048 7.7
--------------------------------------------------------------- ---------------------------------------------------------------
1.45 - 1.54 14 152,334,107 13.3 60.01 - 65.00 21 160,559,048 14.0
--------------------------------------------------------------- ---------------------------------------------------------------
1.55 - 1.64 5 18,600,750 1.6 65.01 - 70.00 20 172,424,901 15.1
--------------------------------------------------------------- ---------------------------------------------------------------
1.65 - 1.74 7 45,290,884 4.0 70.01 - 75.00 39 243,015,933 21.3
--------------------------------------------------------------- ---------------------------------------------------------------
> 1.74 14 38,006,348 3.3 75.01 - 80.00 35 294,076,748 25.7
--------------------------------------------------------------- ---------------------------------------------------------------
Total: 162 1,142,819,332 100.0 80.01 - 81.00 4 35,497,683 3.1
--------------------------------------------------------------- ---------------------------------------------------------------
Min: 1.20x Wtd. Average: 1.35x Max: 2.21x TOTAL: 162 $1,142,819,332 100.0%
--------------------------------------------------------------- ---------------------------------------------------------------
Min: 31.25% Wtd. Average: 68.09% Max: 80.77%
---------------------------------------------------------------
<CAPTION>
ORIGINAL TERMS TO STATED MATURITY OR ARD (MOS) REMAINING TERMS TO STATED MATURITY OR ARD (MOS)
-------------------------------------------------------------- ---------------------------------------------------------------
Number Cut-off Date Percent of Number Cut-off Date Percent of
of Loans Balance Balance of Loans Balance Balance
-------------------------------------------------------------- ---------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
<= 108 6 89,167,900 7.8 <= 108 6 89,167,900 7.8
-------------------------------------------------------------- ---------------------------------------------------------------
109 - 120 154 1,018,450,376 89.1 109 - 120 154 1,018,450,376 89.1
-------------------------------------------------------------- ---------------------------------------------------------------
> 120 2 35,201,056 3.1 > 120 2 35,201,056 3.1
-------------------------------------------------------------- ---------------------------------------------------------------
Total: 162 1,142,819,332 100.0 Total: 162 1,142,819,332 100.0
---------------------------------------------------------------
--------------------------------------------------------------
Min: 36 Wtd. Average: 117 Max: 144 Min: 29 Wtd. Average: 113 Max: 142
-------------------------------------------------------------- ---------------------------------------------------------------
ORIGINAL AMORTIZATION TERMS (MOS) REMAINING AMORTIZATION TERMS (MOS)
--------------------------------------------------------------- ---------------------------------------------------------------
Number of Cut-off Date Percent of Number Cut-off Date Percent of
Loans Balance Balance of Loans Balance Balance
--------------------------------------------------------------- ---------------------------------------------------------------
Interest-only 19 103,950,000 9.1 Interest-only 19 103,950,000 9.1
--------------------------------------------------------------- ---------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
239 - 264 2 16,898,656 1.5 228 - 264 2 16,898,656 1.5
--------------------------------------------------------------- ---------------------------------------------------------------
265 - 336 30 181,502,942 15.9 265 - 336 30 181,502,942 15.9
--------------------------------------------------------------- ---------------------------------------------------------------
337 - 360 111 840,467,734 73.5 337 - 360 111 840,467,734 73.5
--------------------------------------------------------------- ---------------------------------------------------------------
Total: 162 1,142,819,332 100.0 Total: 162 1,142,819,332 100.0
--------------------------------------------------------------- ---------------------------------------------------------------
Min: 240 Wtd. Average: 318 Max: 360 Min: 234 Wtd. Average: 315 Max: 360
--------------------------------------------------------------- ---------------------------------------------------------------
</TABLE>
FIRST UNION SECURITIES, INC. MERRILL LYNCH & CO.
--------------------------------------------------------------------------------
This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and
solicitations of offers to buy securities are made only by, and this information
must be read in conjunction with, the final prospectus supplement and the
related prospectus or, if not registered under the securities laws, the final
offering memorandum (the "Offering Document"), and any such decision to invest
in such securities should be made solely in reliance upon such Offering
Document. Information contained herein does not purport to be complete and is
subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and
representations and other precautionary matters, as disclosed in the Offering
Document. Capitalized terms used but not defined herein have the respective
meanings set forth in the related preliminary prospectus supplement. Information
regarding the underlying assets has been provided by the issuer of the
securities or an affiliate thereof and has not been independently verified by
the underwriters or their respective affiliates. This information was prepared
on the basis of certain assumptions (including in certain case assumptions
specified by the recipient hereof) regarding payments, interest rates, weighted
average lives and weighted average loan age, loss and other matters including
but not limited to, the assumptions described in the Offering Document, the
underwriters, and any of their respective affiliates make no representation or
warranty as to the actual rate or timing of payments on any of the underlying
assets or the payments or yield on the securities. This information supercedes
any prior versions hereof, will be deemed to be superseded by any subsequent
versions (including with respect to any description of the securities or the
underlying assets, the information contained in the Offering Document), and will
deemed superseded, amended and supplemented in their entirety by such final
Offering Document.
19
