Fitch Downgrades Morgan Stanley Pass-Through Certificates

Fitch Ratings has downgraded and removed from Rating Watch Negative 16 classes of commercial mortgage pass-through certificates from Morgan Stanley Capital I Trust 2006-HQ9. In addition, Fitch has assigned Rating Outlooks as applicable.

The downgrades are the result of loss expectations and reflect Fitch's prospective views regarding commercial real estate market value and cash flow declines.

The rating agency forecasts potential losses of 4.5% for this transaction should market conditions not recover. Fitch's actions are based on losses of 3%, including 100% of the losses associated with term defaults and any losses associated with maturities within the next five years.

Fitch also identified 35 Loans of Concern (9%) within the pool, 13 of which (3.87%) are specially serviced. Of the specially serviced loans, one is current. One of the transaction's top 15 loans is in special servicing.

SOURCE: Fitch Ratings

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