Morgan Stanley CMBS Downgraded

Four classes of Morgan Stanley Dean Witter Capital I Inc. commercial mortgage pass-through certificates, series 2000-XLF, have been downgraded by Moody's Investors Service and placed on review for possible further downgrade.The downgrades are as follows: class C, from A3 to Baa2; class D, from Baa2 to Ba2; class E, from Ba3 to B3; and class F1, from B2 to Caa2. Moody's said the downgrades were prompted by the performance of the $160 million Market Center Loan (40.3% of the pool), which matures on Feb. 1, 2003 and is expected to default. It is secured by two Class A office properties on Market Street in San Francisco that are only 17.1% occupied, the rating agency said. Class F1 is supported solely by the Market Center Loan, while classes C, D, and E are pooled classes supported by all four loans remaining in the pool. "While it is uncertain what the ultimate recovery on the loan will be, it is likely that the proceeds will be less than the loan balance, resulting in a significant loss to Class F1," Moody's said.