Fitch Places 5 Mezz Cap CMBS Deals on Watch Negative

NEW YORK--(Business Wire)--
Following a review of the Mezz Cap Commercial Mortgage Trust, series 2004-C1,
2004-C2, 2005-C3, 2006-C4, and 2007-C5 U.S. CMBS transactions, Fitch Ratings
places the following bonds on Rating Watch Negative:

Mezz Cap Series 2004-C1

--$23.7 million class A 'AAA'; Rating Watch Negative;

--$2.8 million class B 'AA+'; Rating Watch Negative;

--$2.3 million class C 'AA-'; Rating Watch Negative;

--$2.8 million class D 'BBB'; Rating Watch Negative;

--$1.5 million class E 'BBB-'; Rating Watch Negative;

--$1.6 million class F 'BB'; Rating Watch Negative;

--$1.1 million class G 'B'; Rating Watch Negative.

Mezz Cap Series 2004-C2

--$34.1 million class A 'AAA'; Rating Watch Negative;

--$2.1 million class B 'AA'; Rating Watch Negative;

--$1.6 million class C 'A'; Rating Watch Negative;

--$2.6 million class D 'BBB-'; Rating Watch Negative;

--$1.0 million class E 'BB'; Rating Watch Negative;

--$1.8 million class F 'BB-'; Rating Watch Negative;

--$1.2 million class G 'B'; Rating Watch Negative;

--$3.9 million class H 'CCC/RR1'; Rating Watch Negative.

Mezz Cap Series 2005-C3

--$40.9 million class A 'A'; Rating Watch Negative;

--$1.8 million class B 'BBB+'; Rating Watch Negative;

--$1.9 million class C 'BBB'; Rating Watch Negative;

--$3.2 million class D 'BB-'; Rating Watch Negative;

--$1.8 million class E 'B'; Rating Watch Negative;

--$1.6 million class F 'B-'; Rating Watch Negative;

--$1.7 million class G 'CCC/RR1'; Rating Watch Negative.

Mezz Cap Series 2006-C4

--$59.8 million class A 'A'; Rating Watch Negative;

--$2.2 million class B 'BBB'; Rating Watch Negative;

--$2.2 million class C 'BB'; Rating Watch Negative;

--$3.6 million class D 'BB-'; Rating Watch Negative;

--$1.2 million class E 'B+'; Rating Watch Negative;

--$2.6 million class F 'B-'; Rating Watch Negative;

--$6.9 million class G 'CC/RR3'; Rating Watch Negative.

Mezz Cap Series 2007-C5

--$39.6 million class A 'A'; Rating Watch Negative;

--$1.2 million class B 'BBB'; Rating Watch Negative;

--$1.6 million class C 'BB'; Rating Watch Negative;

--$2.3 million class D 'BB-'; Rating Watch Negative;

--$1.1 million class E 'B+'; Rating Watch Negative;

--$1.8 million class F 'B-'; Rating Watch Negative;

--$4.4 million class G 'CC/RR4'; Rating Watch Negative.

The Rating Watches are the result of additional specially serviced loans and
increased loss expectations since Fitch's last rating action on each respective
transaction. While in most cases losses have not yet been realized, the higher
leverage on the loans, coupled with a sharp decline in macroeconomic conditions,
makes substantial losses to the trusts likely. In addition, interest shortfalls
have or are expected to affect senior classes. As a result, significant rating
downgrades of several categories, in some cases, are expected.

The transactions' delinquencies generally far exceed the average delinquencies
of typical CMBS deals. Total delinquencies of 30 days or more for each
transaction are as follows: Mezz Cap 2004-C1, 16.5%; Mezz Cap 2004-C2, 10%; Mezz
Cap 2005-C3, 13.2%; Mezz Cap 2006-C4, 20.1%; and Mezz Cap 2007-C5, 20.6%. Fitch
Loans of Concern make up between 28.4% and 47.3% of each transaction.

Fitch expects to resolve the Rating Watches after reviewing updated rent rolls,
operating statements, and reports obtained from both the B note and the
corresponding A note servicers. In determining which loans are expected to incur
losses, Fitch will review evaluations provided by the servicer and evaluated
expected workout strategies. After expected losses are applied, new credit
enhancement levels will be calculated.

Across the transactions, each mortgage loan consists of two notes: the A note,
or senior component, which is not included in each respective trust's mortgage
assets, and the B note. The B notes in each pool consist of subordinate
interests in the first mortgage loans. All loans are secured by traditional
commercial real estate property types and are subject to standard intercreditor
agreements that limit the rights and remedies of the B note holder in the event
of default and upon refinancing. Due to their subordinate positions, B notes
which default and incur a loss are typically 100% non-recoverable. Advancing
typically ceases once a loan becomes 30 days past due.

Fitch's rating definitions and the terms of use of such ratings are available on
the agency's public site, www.fitchratings.com. Published ratings, criteria and
methodologies are available from this site, at all times. Fitch's code of
conduct, confidentiality, conflicts of interest, affiliate firewall, compliance
and other relevant policies and procedures are also available from the 'Code of
Conduct' section of this site.

Fitch Ratings
Britt Johnson, 312-606-2341, Chicago
Lindsay Weichert, 212-908-0398, New York
or
Media Relations:
Brian Bertsch, 212-908-0549, New York
Email: brian.bertsch@fitchratings.com

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