Morgan CMBS Classes Downgraded

Two classes of Morgan Stanley Capital I Inc. commercial mortgage-backed securities, series 2006-XLF, have been placed on Rating Watch Negative by Fitch Ratings. The affected securities are classes M and N-RQK. Fitch also affirmed the ratings on 14 other classes in the transaction. The action on class M was attributed to declining performance of the Holiday Inn-Columbus and Laurel Mall loans. The action on class N-RQK, a rake class collateralized by the B-note of the Resort Quest at Kauai loan, was due to "the property's declining performance since issuance due to a soft Hawaiian hospitality market that shows no signs of improving," Fitch said.