Eight classes from four issues of Morgan Stanley mortgage-backed securities have been downgraded by Fitch Ratings, and one class has been placed on Rating Watch Negative.The negative rating actions, involving classes in series 2002-AM2, series 2003-SD1, series 2004-NC3, series 2004-NC4, and series 2004-NC6, were attributed to a deterioration in the relationship between credit enhancement and expected losses. Fitch also affirmed the ratings on 35 Morgan Stanley classes. The collateral in the deals consists of fixed- and adjustable-rate subprime mortgage loans secured by first and second liens on residential properties.

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