TEXT-S&P Takes Various Rtg Actions On 19 Classes From Two CMBS Dls

Tue Nov 20, 2012 6:19pm EST

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OVERVIEW

-- We raised our ratings on four classes from two U.S. CMBS transactions and removed them from CreditWatch with positive implications.

-- Concurrently, we lowered our ratings on 13 classes from the two U.S. CMBS transactions and removed four of them from CreditWatch with negative implications.

-- We also affirmed our ratings on two other classes from one of the two U.S. CMBS transactions and removed them from CreditWatch with positive implications.

-- The rating actions primarily reflect current and expected credit enhancement levels on the certificates following our analysis of the transactions using our recently updated criteria for rating U.S. and Canadian CMBS transactions.

NEW YORK (Standard & Poor's) Nov. 20, 2012--Standard & Poor's Ratings Services today raised its ratings on four classes from two U.S. commercial mortgage-backed securities (CMBS) transactions and removed them from CreditWatch with positive implications. Concurrently, we lowered our ratings on 13 classes from the two U.S. CMBS transactions and removed four of them from CreditWatch with negative implications. We also affirmed our ratings on two other classes from one of the two U.S. CMBS transactions and removed them from CreditWatch with positive implications(see list). The CreditWatch resolutions are related to CreditWatch placements that we initiated on Sept. 5, 2012.

The upgrades reflect Standard & Poor's expected available credit enhancement for the affected tranches, which we believe is greater than our most recent estimate of necessary credit enhancement for the most recent rating levels. The upgrades also reflect our views regarding the current and future performance of the collateral supporting the respective transactions. We raised our rating on the class A-AB certificates from Morgan Stanley Capital I Trust 2007-IQ14 to reflect the results of our cash flow analysis. Our cash flow analysis indicates that this class should receive its full repayment of principal due to time tranching, as described in "U.S. CMBS 'AAA' Scenario Loss And Recovery Application," published July 21, 2009. The downgrades reflect our expected available credit enhancement for the affected tranches, which we believe is less than our most recent estimate of necessary credit enhancement for the most recent rating levels.

The downgrades also reflect our views regarding the current and future performance of the collateral supporting the respective transactions, which include the current and potential interest shortfalls both transactions are experiencing resulting in reduced liquidity support available to the lowered classes. We lowered the ratings on the class J, K, and L bonds from Morgan Stanley Capital I Trust 2007-HQ11 to 'D (sf)' to reflect our expectation that these classes will continue to experience interest shortfalls indefinitely.

The affirmations reflect our expected available credit enhancement for the affected tranches, which we believe will remain consistent with the most recent estimate of necessary credit enhancement for the current rating levels. The affirmed ratings also acknowledge our expectations regarding the current and future performance of the collateral supporting the transaction.

Today's rating actions follow a detailed review of the performance of the collateral supporting the relevant securities and transaction structures. This review was similar to the review we conducted before placing 744 U.S. and Canadian CMBS ratings on CreditWatch following the release of our updated ratings criteria for these transactions, but was more detailed with respect to collateral and transaction performance. For more information on the analytic process we used for those CreditWatch placements, refer to "The Application Of Standard & Poor's Revised U.S. And Canadian CMBS Criteria For The Sept. 5, 2012, CreditWatch Actions," published Sept. 5, 2012.

STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

SEC Rule 17g-7 requires an NRSRO, for any report accompanying a credit rating relating to an asset-backed security as defined in the Rule, to include a description of the representations, warranties and enforcement mechanisms available to investors and a description of how they differ from the representations, warranties and enforcement mechanisms in issuances of similar securities. The Rule applies to in-scope securities initially rated (including preliminary ratings) on or after Sept. 26, 2011.

If applicable, the Standard & Poor's 17-g7 Disclosure Reports included in this credit rating report are available at

RELATED CRITERIA

-- Rating Methodology And Assumptions For U.S. And Canadian CMBS, Sept. 5, 2012

-- CMBS Global Property Evaluation Methodology, Sept. 5, 2012

-- U.S. Government Support In Structured Finance And Public Finance Ratings, Sept. 19, 2011

-- U.S. CMBS 'AAA' Scenario Loss And Recovery Application, July 21, 2009 RELATED RESEARCH

-- Industry Economic and Ratings Outlook: U.S. Commercial Real Estate Trends Are Improving And CMBS Performance Is Stabilizing, Nov. 5, 2012.

-- Application of CMBS Global Property Evaluation Methodology In U.S. and Canadian Transactions Property Commentary, Sept. 5, 2012

-- The Application Of Standard & Poor's Revised U.S. And Canadian CMBS Criteria For The Sept. 5, 2012, CreditWatch Actions, Sept. 5, 2012 Temporary Telephone Contact Number: Gabriel Irizarry (917-301-7683)

RATING AND CREDITWATCH ACTIONS

Morgan Stanley Capital I Trust 2007-IQ14

Commercial mortgage pass-through certificates

Rating

Class To From Credit enhancement (%)

A-AB AAA (sf) BBB+ (sf)/Watch Pos 30.67

A-M B (sf) BB (sf)/Watch Neg 19.16

A-MFX B (sf) BB (sf) 19.16

Morgan Stanley Capital I Trust 2007-HQ11

Commercial mortgage pass-through certificates

Rating

Class To From Credit enhancement (%)

A-4 AA+ (sf) A (sf)/Watch Pos 32.89

A-4FL AA+ (sf) A (sf)/Watch Pos 32.89

A-1A AA+ (sf) A (sf)/Watch Pos 32.89

A-M BBB (sf) BBB (sf)/Watch Pos 21.17

A-MFL BBB (sf) BBB (sf)/Watch Pos 21.17

A-J B+ (sf) BB (sf) 11.94

B B (sf) BB- (sf) 11.06

C B (sf) B+ (sf) 9.31

D B- (sf) B+(sf)/ Watch Neg 8.13

E B- (sf) B+ (sf)/Watch Neg 7.55

F B- (sf) B (sf)/Watch Neg 6.52

G CCC (sf) CCC+ (sf) 5.35

H CCC- (sf) CCC (sf) 4.03

J D (sf) CCC- (sf) 2.86

K D (sf) CCC- (sf) 1.25

L D (sf) CCC- (sf) 0.81

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