Expect A Downgrade on MSC 1998-XL1 G?

Another mall, known as the Charlestowne Mall, went in REO yesterday. This may impact one CMBS deal, MSC 1998-XL1. That deal has only two loans as collateral: Charlestowne Mall, which is 27% of the collateral, and CenterAmerica Mall for the rest, 73%. According to servicer's reports, the property was appraised on May 11, 2009 at 18.82% of its appraisal value on June 1, 1998. So it is not unreasonable to fear a loss severity of 80% on this loan.

According to Bloomberg's SPA simulation page, that would not be enough to create a loss on the investment grade tranches. But the first IG tranche, the G tranche, would then be at the mercy of a default on the other loan even is loss severity is a mere 10%. The corresponding SPA page appears below. A downgrade of tranche G, and perhaps even F, is thus looming.