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PRESS RELEASE: Fitch Says Japanese CMBS Lead APAC SF Q309 Downgrades

The following is a press release from Fitch Ratings:

Fitch Ratings-Hong Kong/Sydney/Singapore-13 October 2009: Fitch Ratings has today said that a total of 119 APAC tranches (including public, private, international and national ratings) were downgraded during the third quarter of 2009, and four were upgraded. Additionally, 334 tranches were affirmed, accounting for a quarter of all outstanding tranches rated by Fitch in the region.

"The most significant rating actions in Q309 were the downgrades of over 40 Japanese CMBS classes. These followed the implementation of the recently published Japanese CMBS surveillance criteria, a process that will continue into Q409," said Alison Ho, Director and Head of Performance Analytics within Fitch's Asia Pacific Structured Finance team. "Over 50 publicly rated Australian RMBS tranches were also downgraded as a result of the agency's changed internal assessment of Genworth Financial Mortgage Insurance Pty Ltd, a provider of lenders' mortgage insurance. Despite these downgrades, the majority of tranches rated in Asia Pacific continue to perform in line with expectations, as evidenced by the fact that most rating actions in the quarter were affirmations, " adds Ms. Ho.

One tranche from a well-seasoned Australian non-conforming RMBS transaction was upgraded, despite high delinquencies as credit enhancement has built-up following the redemption of senior notes. In addition, one CDO tranche was upgraded due to the build up of credit enhancement as a result of which, the notes can withstand the default of 80% of the current portfolio with no recovery.

Over a hundred tranches from Japanese CMBS transactions remain on Rating Watch Negative. The agency aims to resolve these over the coming weeks, as it continues to implement its recently published Japanese CMBS surveillance criteria.

At the end of September 2009, 193 tranches in APAC had Negative Outlooks, an increase from the 157 at the end of Q209. Japanese CMBS accounted for the majority of the increase reflecting Fitch's negative view of the Japanese commercial real estate market.

Individual press releases relating to specific rating actions can be found on Fitch's website at www.fitchratings.com.

For further information on the surveillance criteria and methodology, please see the criteria report, "Criteria for Japanese CMBS Surveillance" and the special report, "Application and Impact of the Japanese CMBS Surveillance Criteria". Both reports were published on 2 September 2009 and are available on the agency's website, www.fitchratings.com. Note that the reports have been published simultaneously and are intended to be read in conjunction with each other. The criteria report describes the approach and framework of the methodology, and the special report details the application and assumptions adopted for the 2009 surveillance review.

Other applicable Criteria available on Fitch's website at www.fitchratings.com: "Global Structured Finance Rating Criteria", dated 30 September 2009.

Contact: Alison Ho, Hong Kong, +852 2263 9937; Ben McCarthy, Sydney, +612 8256 0388.

Media Relations: Karen Cho, Hong Kong, Tel: +852 2263 9935, Email: karen.cho@ fitchratings.com; Shivani Sundralingam, Singapore, Tel: + 65 6796 7215, Email: shivani.sundralingam@fitchratings.com.

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.

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