Fitch Affirms Salomon Brothers, Series 1999-C1; Assigns DR Rating to Class L

Business Wire, March 20, 2007

CHICAGO -- Fitch Ratings assigns a Distressed Recovery (DR) rating to Salomon Brothers Mortgage Securities VII, Inc.'s commercial mortgage pass-through certificates, series 1999-C1 as follows:

--$7.3 million class L to 'B-/DR1' from 'B-'.

In addition, Fitch affirms the following classes:

--$276.3 million class A-2 at 'AAA';

--Interest-only class X at 'AAA';

--$38.6 million class B at 'AAA';

--$38.6 million class C at 'AAA';

--$11 million class D at 'AAA';

--$27.6 million class E at 'AAA';

--$11 million class F at 'AAA';

--$14.7 million class G at 'AA ';

--$20.2 million class H at 'A-';

--$9.2 million class J at 'BBB-';

--$16.5 million class K at 'B'.

Fitch does not rate the $5.6 million class M certificates. Class A-1 has paid in full. The assignment of the DR rating to class L is the result of expected losses on the specially serviced loans.

The rating affirmations reflect the pool's stable performance from loan payoffs and amortization, as well as the defeasance of four additional loans (3.3%) since Fitch's last rating action. In total, 15 loans (16.4%) have defeased, including the largest loan (4%) in the transaction. As of the February 2007 distribution date, the pool's collateral balance has been reduced 35% to $478.7 million from $734.9 million at issuance

Currently, six assets (4%) are in special servicing and losses are expected on four. The largest specially serviced asset (1.4%) is secured by a multifamily property in Beaumont, Texas, which suffered damage due to Hurricane Rita. The property has been renovated and current occupancy is 94%. The loan is 90 days delinquent and the borrower and special servicer have agreed to a workout plan.

The second largest specially serviced asset (0.9%) is secured by two mobile home parks located in Wilkes Barre and Muncey, Pennsylvania. The loan is 90 days delinquent and the special servicer is pursuing foreclosure.

The third, fourth and fifth specially serviced assets are real estate-owned and listed for sale. They include a multifamily property (0.7%) located in Memphis, Tennessee, an office building (0.4%) in Greece, New York, and an office building (0.2%) in Rogers, Arkansas.

The final and sixth largest specially serviced asset (0.2%) is a self-storage facility located in Warner Robins, Georgia. The loan is current but the borrower has filed bankruptcy. The special servicer and borrower are developing a workout strategy.

The Fitch projected losses on the specially serviced assets are expected to be absorbed by the non-rated class M.

Fitch's Distressed Recovery (DR) ratings, introduced in April 2006 across all sectors of structured finance, are designed to estimate recoveries on a forward-looking basis while taking into account the time value of money. For more information on Distressed Recovery ratings, see the full report ('Structured Finance Distressed Recovery Ratings'), which is available on the Fitch Ratings web site at www.fitchratings.com.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.