ARCap CMBS Classes Downgraded

Six classes of ARCap Resecuritization Inc. series 2004-RR3 commercial mortgage-backed securities have been downgraded by Fitch Ratings. The downgrades were as follows: class G, from BBB-minus to BB; class H, from BB-plus to B; class J, from BB to B-minus; class K, from BB-minus to B-minus; class L, from B-plus to B-minus; and class M, from B to B-minus. Fitch also affirmed the ratings on eight other classes in the deal. "In reviewing CMBS Re-REMICs, Fitch has targeted expected losses in different rating stresses based on the quality of the underlying CMBS collateral," the rating agency said. "The overall expected losses reflect the single-sector exposure, the concentrated nature of these portfolios, and the low expected recoveries upon bond default, especially for more junior and thinner classes of CMBS tranches." The rating agency can be found on the Web at http://www.fitchratings.com.