Fitch Places 3 Classes of MSCI 2007-HQ13 on Rating Watch Negative

NEW YORK--(BUSINESS WIRE)--Fitch Ratings has placed three classes of Morgan Stanley Capital I Trust 2007-HQ13 (MSCI 2007-HQ13) on Rating Watch Negative. Additionally, Fitch affirms three senior 'AAA' and nine distressed classes. A detailed list of rating actions follows at the end of this release.

The Negative Watch reflects continued concerns surrounding the loans in special servicing, most notably the largest loan in the pool, The Pier at Caesars (10.8%). Efforts to stabilize and improve performance at the property have proven to be challenging, and anticipated progress in the workout of this asset has not materialized. Recently, the property failed to attract the minimum bid at an auction sale, which maintains concerns that the unique nature of the property adds a level of complexity to the workout.

As of the August 2012 remittance period, there are four loans (16.8%) in special servicing. The transaction has realized losses of 7% to date, an increase from 0.5% at the last rating action which has caused the class F through P notes to experience principal losses Based on current loss estimates in the pool, which include loss expectations on specially serviced loans, the potential for multi-category downgrades exists.

Fitch expects to resolve the Rating Watch status within the next several months following a complete review of the transaction including updated valuation details and collateral/workout discussions with the loan servicers.

Fitch has affirmed the following classes as indicated:

--$117.2 million class A-1A notes at 'AAAsf'; Outlook Stable;

--$55.4 million class A-2 notes at 'AAAsf'; Outlook Stable;

--$334.5 million class A-3 notes at 'AAAsf'; Outlook Stable;

--$11.7 million class C notes at 'Csf'; RE 0%;

--$16.9 million class D notes at 'Csf'; RE 0%;

--$13.0 million class E notes at 'Csf'; RE 0%;

--$2.9 million class F notes at 'Dsf'; RE 0%;

--$0 class G notes at 'Dsf'; RE 0%;

--$0 class H notes at 'Dsf'; RE 0%;

--$0 class J notes at 'Dsf'; RE 0%;

--$0 class K notes at 'Dsf'; RE 0%;

--$0 class L notes at 'Dsf'; RE 0%.

Fitch has placed the following classes on Rating Watch Negative as indicated:

--$103.9 million class A-M 'AAsf';

--$72.8 million class A-J 'CCCsf'; RE 95%;

--$18.2 million class B 'CCsf' RE 0%;.

Additionally, Fitch has marked the class A-1 notes as 'PIF'. Fitch previously withdrew the rating on the class X notes.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (June 6, 2012);

--'Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions' (Dec. 21, 2011).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679923

Surveillance Methodology for U.S. Fixed-Rate CMBS Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=662869

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