Fitch Upgrades 1 Class of Salomon Brothers VII 2000-C2

Business Wire, June 17, 2008

NEW YORK -- Fitch Ratings has upgraded Salomon Brothers Mortgage Securities (SBMS) VII, Inc., series 2000-C2 as follows:

--$13.7 million class F to 'AA' from 'AA-'.

Fitch has also affirmed the following classes:

--$416.5 million class A-2 at 'AAA';

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

--$33.2 million class B at 'AAA';

--$33.2 million class C at 'AAA';

--$7.8 million class D at 'AAA';

--$11.7 million class E at 'AAA';

--$9.8 million class G at 'A-';

--$21.5 million class H at 'BBB-';

--$13.7 million class J at 'B'.

$5.9 million class K remains at 'CCC/DR2', while classes L and M remain at 'C/DR6'. Class N has been depleted due to realized losses to the trust.

The upgrade is due to increased credit enhancement as a result of additional principal paydown since Fitch's last rating action. As of the May 2008 distribution date, the pool's aggregate certificate balance has been reduced 26% to $578 million from $781.5 million at issuance. There are 147 loans remaining in the pool, down from the original 193. Forty-six (35.9%) loans are defeased, including the largest loan in the pool (5%).

Fitch has identified 15 loans (9.9%) as Fitch loans of concern, including the four specially serviced assets (4.1%) as well as loans with declining debt service coverage ratio (DSCR) and/or occupancy. The largest specially serviced asset (2.5%), which is also the sixth largest loan in the pool, is secured by a 251,365 square foot (sf) retail center located in Baltimore, MD. The asset has been real estate-owned (REO) since February 2006. Litigation against the guarantor over carve-out claims is over and post-judgment collection efforts are underway. The property is under marketing for sale.

The second largest specially serviced asset (1.5%) is secured by a 148,319 sf office property located in Lansing, MI. The loan was transferred to the special servicer due to imminent default. Loan assumption has completed and it will be transferred back to the master servicer shortly.

The third largest specially serviced asset (0.8%) is secured by a 212-unit apartment complex in Oklahoma City, OK. The loan was transferred to special servicing due to imminent default due to a fire at the property in December 2006 that damaged several units which remain off-line. As of January 2008, occupancy rate was 32.5%, compared to 94.4% at issuance. Foreclosure petition has been filed and the receiver has taken over the property. Special servicer is pursuing judgment against the guarantor for misuse of insurance proceeds.

Six loans (1.3%) are scheduled to mature in 2008, including three retail loans (0.5%), two limited-service hotel loans (0.6%) and one office loan (0.18%). All six loans are non-defeased and current with interest rate ranging from 6.95% to 7.9%. The two hotel loans have been identified as Fitch loans of concern due to deteriorating performance. The remaining four loans have improved year-end 2007 DSCR compared to that at issuance. Occupancy at these four properties has been stable to slightly improving since issuance.

59 loans (33.9%) are scheduled to mature in 2009, of which 23 (14.5%) are defeased and seven (4.5%) are Fitch loans of concerns. In addition, 57 loans (45.6%) are scheduled to mature in 2010, 19 of which (15%) are defeased and five (8.3%) are Fitch loans of concern.

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