TEXT:Fitch Places Orso 5's Class C on RWN; Downgrades E&F to 'Dsf'

(The following was released by the rating agency)

TOKYO, February 06 (Fitch) Fitch Ratings has downgraded Orso Funding CMBS 5's class E and F trust beneficiary interests (TBIs) due February 2013 to 'Dsf' from 'Csf'. The agency also placed the class C TBIs on Rating Watch Negative (RWN) and affirmed the class D TBIs. The transaction is a Japanese multi-borrower type CMBS securitisation.

The rating actions are as follows:

JPY0.9bn* Class C TBIs 'Asf' placed on RWN

JPY2.9bn* Class D TBIs affirmed at 'Bsf'; Outlook Stable

JPY1.5bn* Class E TBIs downgraded to 'Dsf' from 'Csf'; Recovery Estimate 20%

JPY0* Class F TBIs downgraded to 'Dsf' from 'Csf'

*as of 3 February 2012

The downgrades of the class E and F TBIs to 'Dsf' reflect the write-down of their principal on the January 2012 payment date, after workout activity of one defaulted loan resulted in partial recovery.

The RWN reflects uncertainty over the timing of full redemption of the class C TBIs, as there are 12 months to the legal final maturity. One underlying loan that defaulted in February 2011 remains in the transaction. After the mezzanine loan lender's controlling period to the borrower expired and the initial asset manager was replaced, the servicer has started full-scale workout activity from late November 2011 with their business plan. Fitch believes that several properties backing the defaulted loan are expected to be sold within a few months, as all the seven remaining properties are office properties in Tokyo and the sales proceeds are likely to be sufficient to redeem the class C TBIs in full. However, should the property sales be delayed further, the rating on the class C TBIs may no longer be commensurate with the 'Asf', as the timing of full redemption on the class C TBIs would be much closer to the legal final maturity than expected. Fitch will monitor the workout progress on the defaulted loan and aims to resolve the RWN status by end-May 2012.

The class A and B TBIs were redeemed in full in July 2011, following full principal recovery of one defaulted loan due to property sale.

Recovery Estimate to the class F TBIs will no longer be calculated as the principal has been fully written down.

At closing the transaction was backed by seven loans secured by 43 properties. The TBIs are now backed by one defaulted loan secured by seven properties.