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TEXT-S&P lowers ratings on JLOC XXVIII CMBS to 'D (sf)'

(The following statement was released by the rating agency)

Oct 09 - OVERVIEW

-- JLOC XXVIII is a property sales-type CMBS transaction that MorganStanley Japan Securities arranged.

-- The remaining senior specified bond that secures the class D seniortrust certificates has been impaired and, as a result, the class D seniortrust certificates have also incurred a loss.

-- Harajuku Holding TMK's series 4-2 mezzanine specified bond has alsobeen impaired.

-- We have lowered to 'D (sf)' our ratings on the class D senior trustcertificates and on the series 4-2 mezzanine specified bond.

Standard & Poor's Ratings Services today said that it has lowered to 'D (sf)' from 'CCC(sf)' its ratings on the class D senior trust certificates and on Harajuku Holding TMK's series4-2 floating-rate mezzanine specified bond issued under the JLOC XXVIIItransaction (see list below). The class A and B senior trust certificates andNakano Holding TMK's series 3-2 floating-rate mezzanine specified bond havealready fully redeemed, and the class C senior trust certificates also fullyredeemed on the payment date in October 2012.

Of the two senior specified bonds that originally backed the senior trustcertificates, a single senior specified bond (Harajuku Holding TMK's seniorspecified bond) remains. Although the sales of all the properties backingHarajuku Holding TMK's senior specified bond and series 4-2 floating-ratemezzanine specified bond have been completed, the outstanding principal onthese two specified bonds exceeds the amount of proceeds collected through theproperty sales. We today downgraded class D and the series 4-2 mezzaninespecified bond to 'D (sf)' because we have confirmed that these two classesincurred losses.

JLOC XXVIII is a property sales-type commercial mortgage-backed securities(CMBS) transaction that Morgan Stanley Japan Securities Co. Ltd. arranged. Atthe outset of the transaction, two senior specified bonds secured the seniortrust certificates, and 567 real estate properties backed the senior specifiedbonds and mezzanine specified bonds.

RELATED CRITERIA AND RESEARCH "CMBS Global Property Evaluation Methodology," Sept. 5, 2012

"Japanese Structured Finance Scenario And Sensitivity Analysis: The Effects OfMajor Macroeconomic Factors," April 6, 2012

"Methodology For Japanese CMBS Loan Analysis," March 12, 2007 RATINGS LOWERED JLOC XXVIII Senior Trust Certificates JPY88.9 billion trust certificates due October 2012 Class To From Initial issue amount D D (sf) CCC (sf) JPY7.2 bil. JLOC XXVIII Mezzanine Specified Bonds Harajuku Holding TMK Series 4-2 JPY3.6 billion floating-rate mezzanine specifiedbond due October 2012 To From Initial issue amount D (sf) CCC (sf) JPY3.6 bil.

((Bangalore Ratings Team, Hotline: +91 80 4135 5898Debanjali.Ghosh@thomsonreuters.com, Group id: BangaloreRatings@thomsonreuters.com, ReutersMessaging:Debanjali.Ghosh.reuters.com@reuters.net))