PRESS RELEASES

Contact: Mitchell Singer
(704) 383-4255

May 28, 1998
First Union Capital Markets, Lehman Brothers Pool 664 Loans in Latest Commercial Mortgage Securitization Package Priced at More Than $3.4 Billion
Transaction Is Industry's Second Largest Commercial Mortgage Securitization

CHARLOTTE-First Union Capital Markets and Lehman Brothers have pooled 664 loans into a $3.408 billion commercial mortgage securitization package-representing the industry's second largest offering of commercial mortgage-backed securities (CMBS). The package also is the industry's most geographically diverse to date, comprising 729 properties from 43 states and the District of Columbia.

Known as a "fusion" deal because it consists of a typical conduit loan component-loans that are originated for the purposes of securitization-as well as a large loan component (generally loans in excess of $50 million on institutional quality real estate), the securities are backed by loans originated or acquired by First Union National Bank, Lehman Brothers and Bank of America. In addition to the conduit loan and large loan component, the mortgage pool also includes a Credit Tenant Lease (CTL) portion valued at approximately $232 million.

First Union contributed 271 loans to the mortgage pool representing approximately $1.346 billion of mortgage loans. Included in this figure are CTL loans valued at about $163 million as well as a number of loans from the bank's Class A program-which offers institutional quality assets from institutional quality borrowers. Lehman Brothers contributed 273 loans valued at approximately $1.73 billion, including $496 million in large loans and $62 million in CTL loans. In addition, Bank of America contributed nearly $332 million in conduit loans to the package.

"We're very excited to be offering a collateral pool of this magnitude as investors will benefit from the tremendous diversity of the components in property type, loan type and geographic distribution," said Barry P. Reiner, managing director of First Union Corporation's Commercial Real Estate Finance Group. "The transaction further cements First Union's role as a major player in the CMBS market with the success of this deal highlighting that fact."

Multi-family housing represents 31 percent of the securitized loan pool followed by retail properties at 27 percent and office properties at 20 percent. The package also includes hotels (7 percent), credit tenant leases (7 percent) and industrial/warehouse (4 percent).

This latest First Union Capital Markets and Lehman Brothers CMBS transaction builds upon two 1997 offerings totaling $3.5 billion. In 1996 and 1997, First Union National Bank ranked as the nation's leading commercial bank originator of securitized commercial mortgage loans. First Union originates commercial mortgages for securitization throughout its East Coast franchise as well as through regional offices in Chicago, Houston and Irvine, Calif.

First Union has developed a nationally recognized securitization capability, specializing in all types of asset classes. In 1997, for example, First Union Capital Markets completed the first public securitization of Community Reinvestment Act (CRA) loans.

First Union Capital Markets is a division of Wheat First Securities, Inc., a separate, non-bank affiliate of First Union Corp. (NYSE: FTU). Wheat First Securities, Inc., a registered broker-dealer and a member of the New York Stock Exchange, Inc. and the Securities Investor Protection Corp., provides a full range of investment banking products and services including asset-backed finance, public finance, syndicated loans, merger and acquisition advisory, private finance, equity underwriting and investment grade and high-yield debt finance.

First Union has grown its capital markets business substantially over the past four and a half years. First Union's Capital Markets Group reported 1997 fee income of $802 million up from $509 million in 1996 and $265 million in 1995. Fee income through the first quarter of 1998 rose to $255 million, $95 million more than for the same period in 1997.

Charlotte-based First Union Corp. is the nation's sixth-largest bank holding company with assets of about $220 billion. The company serves approximately 16 million customers throughout the East Coast and nation.

-- FTU --

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