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The securities are backed by 283 fixed-rate commercial mortgage loans on the following property types: multi-family (39.9 percent of the pool balance), retail (39.3 percent), hotel (9.8 percent), office (5.3 percent) and other (5.7 percent). The properties are located in 40 states, with the greatest concentration in Texas (13.8 percent), Florida (12.2 percent), California (7.9 percent), Pennsylvania (6.8 percent) and Maryland (6.4 percent). All of the loans were originated or acquired by First Union National Bank and Lehman Brothers.

The securities represent the first issued off of First Union's commercial mortgage-backed securities shelf registration statement. First Union Commercial Mortgage Servicing, a unit of First Union National Bank of North Carolina, will act as master servicer of the loans.

"This offering was extremely well received by investors and we are very pleased with its success," said Larry Brown, managing director of First Union's Commercial Real Estate Finance Group, which originated about 40 percent of the pooled loans. "Our involvement in the origination, securitization, underwriting and servicing of this transaction underscores our vertically integrated capabilities and our strength in the commercial mortgage conduit business."

A conduit is a vehicle for converting pools of real estate loans into securities. Once the pool reaches a certain size, the securities are sold to institutional investors.

The investment banking subsidiary of First Union has been involved in the sale of more than $3.5 billion of commercial mortgage-backed securities since it began securitizing commercial loans less than two years ago.

In 1996, First Union ranked as the nation's leading commercial bank originator of securitized commercial mortgage loans. First Union's Commercial Real Estate Finance Group originates a portion of those loans through seven regional offices in Charlotte, Atlanta, Jacksonville, Nashville, Newark and the Virginia/Maryland/Washington, D.C. region. Its newest office opened earlier this year in Irvine, Calif.

First Union Capital Markets Corp. offers a broad range of products and services to corporate customers, including loan syndications, private placements, merger and acquisition advisory, public finance, as well as investment grade and high-yield debt origination, trading and distribution.

First Union National Bank of North Carolina is an affiliate of First Union Capital Markets Corp. and a subsidiary of First Union Corp.

First Union Corp. provides financial products and services to more than 12 million customers nationwide. First Union is the nation's sixth-largest bank holding company with assets of more than $136 billion as of March 31, 1997.

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