Fitch Upgrades Salomon Bros Mortgage Securities VII CDC Securitization Corp 2003-CDC1

Business Wire, June 19, 2006

NEW YORK -- Fitch Ratings upgrades the following classes of Salomon Brothers Mortgage Securities VII, Inc. CDC Securitization Corp., series 2003-CDC1:

--$14.9 million class D to 'AAA' from 'AA ';

--$9.5 million class E to 'AA' from 'AA-'.

In addition, Fitch affirms the following classes:

--Interest only classes X-1 and X-3 CDC at 'AAA';

--$15.3 million class C at 'AAA';

--$7.5 million class F at 'A';

--$1.6 million class G-1 WGM at 'A ';

--$1.6 million class G-2 WGM at 'A';

--$1.4 million class G-3 WGM at 'A-';

--$1.4 million class H-WGM at 'BBB ';

--$1.4 million class J-WGM at 'BBB';

--$3.3 million class K-WGM at 'BBB-'.

The following classes have paid in full: A-1, A-2, Interest only classes X-2A, X-2B, X-3 CGM-ILC, X-3 CGM-PLM, X-3 CGM-DAL, X-3 CGM-SPF and X-3 CGM-FAM, and B, G-2 GBM, G-2 PLM, G-3 GBM, G-3 PLM, H-ILC, H-GBM, H-PLM, H-BST, H-DAL, H-SPF, H-EXB, H-FAM, H-BPH, J-GBM, J-LHM, J-GBM, J-PLM, J-BST, J-DAL, J-EXB, J-FAM, K-ILC, K-LHM, K-PLM, K-BST, K-DAL, K-SPF, K-EXB, K-FAM, K-BPH, L-ILC, L-LHM, L-DAL, and L-FAM.

The upgrades are due to the repayment of the Layton Hills Mall and 6116 Executive Plaza loans, resulting in improved credit enhancement levels. As of the June 2006 remittance report, the transaction has paid down 86.1% to $48 million from $441.1 million at issuance, with one loan remaining in the transaction.

The remaining loan is collateralized by the Westgate Mall in Amarillo, TX, the only regional mall in the Texas Panhandle, with the only competition located in Lubbock, TX, 120 miles south. The loan is composed of an 'A' note of $37.5 million, and a 'B' note of $10.5 million, which supports the six rake classes remaining in the transaction. As a result of a decline in the Fitch stressed net cash flow (NCF) at year-end (YE) 2005, the Fitch A-note stressed debt service coverage ratio (DSCR) declined to 1.48 times (x) compared to 1.79x at issuance, and the lowest of the five rake classes had a DSCR of 1.16x. The decline in NCF was due largely to an increase in property taxes and a slight decline in occupancy. In-line occupancy, which was at 87.3% at YE 2005, is expected to increase to 90% at YE 2006 as a result of newly signed leases. In addition, YE 2005 in-line sales increased 1.29% above YE 2004 sales and the property continues to benefit from limited competition. The loan is scheduled to mature in January 2007.

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