Fitch Downgrades 6 Classes from Morgan Stanley 2005-IQ9; Assigns Outlooks & LS Ratings

NEW YORK--(Business Wire)--
Fitch Ratings takes various rating actions on Morgan Stanley Capital I trust
2005-IQ9, commercial mortgage pass-through certificates. A detailed list of
rating actions follows at the end of this press release.

The downgrades are the result of Fitch's loss expectations and its prospective
views regarding cash flow declines and commercial real estate market values.
Fitch forecasts potential losses of 2.7% for this transaction, should market
conditions not recover. Today's rating actions are based on the full losses of
2.7% as a majority of loans mature in the next five years. The bonds with
Negative Outlooks indicate classes that may be downgraded in the future.

To determine potential defaults for each loan, Fitch assumed cash flow would
decline by 10% from year-end 2008. That is consistent with the analysis used in
its review of recent vintage transactions whereby cash flow was assumed to
decline 15% from year-end 2007 projected over a three year period. If the
stressed cash flow would cause the loan to fall below 0.95 times (x) debt
service coverage ratio (DSCR), Fitch assumed the loan would default during the
term. To determine losses, Fitch used the above stressed cash flow and applied a
market cap rate by property type, ranging between 7.5% and 9.5%, to derive a
value. If the loan balance at default is less than Fitch's derived value, the
loan would realize that amount of loss. These loss estimates were reviewed in
more detail for loans representing 62.7% of the pool and, in certain cases,
revised based on additional information and/or property characteristics. Loss
expectations attributed to loans reviewed in detail represent approximately 71%
of the 2.7%.

Approximately 82.7% of the mortgages mature within the next five years as
follows: 6.5% in 2010, 11.7% in 2011 and 1.9% in 2012, 5.5% in 2013, 44.9% in
2014 and 11.5% in 2015.

Fitch identified 40 Loans of Concern (18.8%) within the pool, eight of which
(10.0%) are specially serviced. Of the specially serviced loans, two (7.9% of
the pool) are current. Two of the Fitch Loans of Concern (8.7%) are within the
transaction's top 15 loans, and one (7.8%) is specially serviced.

Fitch's analysis did not result in loss expectations for the top 15 loans. None
of the top 15 loans are assumed to default during the loan term, as the stressed
cash flow for each loan exceeds 0.95x DSCR. Fitch expects that 14 of the top 15
loans may default at maturity based on an insufficient accrued equity position
as calculated in Fitch's refinance test; however, Fitch's analysis did not
result in a loss based on its derived values being higher than the current loan
amounts. A loan would pass the refinance test if the stressed cash flow would
achieve a 1.25x DSCR as calculated based on a 30 year amortization schedule and
an 8% coupon.

The largest contributors to loss, are the specially serviced loans, are as
follows: Okeechobee Industrial Park (0.7%), Bermuda Run (0.6%), and Mariemont
Promenade (0.3%).

Okeechobee Industrial Park transferred to the special servicer in June 2009
after the borrower failed to make that months payment. The loan is
collateralized by a light industrial facility located in West Palm Beach,
Florida, consisting of 11 buildings. Two main factors led to the default;
decline in occupancy and lower market rent rates. When the current borrower
assumed the loan, occupancy was 72% it has since fallen to 57%. In addition,
according to the borrower many tenants are delinquent in rent payments; only 45%
of tenants in place are current.

The Bermuda Run loan is secured by a 165 unit/532 bed student housing project
located in Statesboro, GA, home of Georgia Southern University. The property
transferred to the special servicer December 2008. The market has become
oversaturated with newer properties offering greater amenities. The borrower
turned the property over to the lender. The special servicer worked with the
borrower to transition control to a receiver and the receiver was appointed in
March 2009. The receiver provided a takeover package and has made some
recommendations to help make the property more competitive.

The Mariemont Promenade loan is collateralized by a 49,442 square foot (sf)
strip center in Mariemont, OH. A hill behind the property collapsed causing
several tenants to vacate. Ongoing issues with the neighboring condo association
are preventing the repairs from being completed. The borrower was unable to
remediate the situation and a receiver was put in place.

Fitch has downgraded, removed from Rating Watch Negative, assigned Loss Severity
(LS) ratings and Rating Outlooks to the following classes as indicated:

-- $130.2 million class A-J to 'AA/LS3' from 'AAA'; Outlook Stable;
-- $32.6 million class B to 'A/LS4' from 'AA'; Outlook Stable;
-- $15.3 million class F to 'BB/LS5' from 'BBB-'; Outlook Stable;
-- $17.2 million class H to 'B/LS5' from 'BB-'; Outlook Negative;
-- $5.7 million class J to 'B/LS5' from 'B+'; Outlook Negative;
-- $7.7 million class K to 'B-'from 'B'; Outlook Negative.

Fitch also affirms the following classes and assigns LS ratings, Rating Outlooks
and Recovery Ratings as indicated:

-- $249.7 million class A-1A at 'AAA/LS1'; Outlook Stable;
-- $110.3 million class A-2 at 'AAA/LS1'; Outlook Stable;
-- $194.7 million class A-3 at 'AAA/LS1'; Outlook Stable;
-- $94.4 million class A-4 at 'AAA/LS1'; Outlook Stable;
-- $43.8 million class A-AB at 'AAA/LS1'; Outlook Stable;
-- $446.2 million class A-5 at 'AAA/LS1'; Outlook Stable;
-- Interest-only class X-1 at 'AAA'; Outlook Stable;
-- Interest-only class X-2 at 'AAA'; Outlook Stable;
-- Interest-only class X-Y at 'AAA'; Outlook Stable;
-- $11.5 million class C at 'A/LS5'; Outlook Negative;
-- $26.8 million class D at 'BBB+/LS5'; Outlook Stable;
-- $15.3 million class E at 'BBB/LS5'; Outlook Negative;
-- $11.5 million class G at 'BB/LS5'; Outlook Negative;
-- $5.7 million class L at 'B-/LS5'; Outlook Negative;
-- $5.7 million class M at 'CCC/RR1';
-- $3.8 million class N at 'CCC/RR1';
-- $5.7 million class O at 'CC/RR4'.

Class A-1 has paid in full. Fitch does not rate the $11.5 million class P.

Additional information on Fitch's amended criteria for analyzing recent vintage
U.S. CMBS is available in the July 8, 2009 report, 'Surveillance Methodology for
Recent Vintage U.S. CMBS' is available at 'www.fitchratings.com' under the
following headers:

Structured Finance >> CMBS >> Criteria Reports

Structured Finance >> CMBS >> Special Reports

Additional information is available at 'www.fitchratings.com'.

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS.
PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK:
HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING
DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S
PUBLIC WEBSITE '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
Sandro Scenga, +1-212-908-0278 (New York)
sandro.scenga@fitchratings.com
Jonathan Teichmann, +1-212-908-0862 (New York)
Britt Johnson, +1-312-606-2341 (Chicago)

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