Morgan Stanley MBS Class Downgraded

Class B-5 of Morgan Stanley Capital I Inc.'s series 1996-1 mortgage-backed securities has been downgraded from B to CCC by Fitch Ratings.In addition, the ratings on five other classes in the transaction were affirmed. The downgrade stemmed from deterioration in the relationship between credit enhancement and expected losses, Fitch said. "Given approximately $221,000 in outstanding foreclosures and historic loss severities, Fitch does not feel that the protection offered by the subordination of the B-6 (approximately $61,000) bond is adequate to prevent an eventual principal writedown of the B-5 certificate from occurring," the rating agency said.