Fitch assigns UAE CMBS VEHICLE NO. 1 final ratings

Final ratings as follows:

USD28,100,000 Class A: 'AA-' (AA minus); Outlook Stable

USD12,900,000 Class B: 'A'; Outlook Stable

USD12,500,000 Class C: 'BBB'; Outlook Stable

The final ratings reflect the positive and negative features of the underlying collateral and the integrity of the legal and financial structures. They address the timely payment of interest on the notes and the ultimate repayment of principal by final legal maturity in June 2016.

This transaction is secured by Al-Thuraya Tower 2, a 227,847 sq ft office tower building located in the Technology and Media Free Zone ('TECOM Free Zone') in Dubai near the Dubai Marina, Emirates Hills and the Palm Jumeirah and close to junction 5 of the Sheikh Zayed Road. It will benefit from good transport links, as it is located in proximity to future subway stations.

The asset comprises 22 floors of commercial office space (93.31% by total lettable area) above five podium level floors and three basement parking levels (613 car parking spaces). The building also has retail and restaurant use space of about 15,600 sq ft.

The building was constructed in November 2006 and provides large and flexible (around 9,000 to 10,400 sq ft) floor space. The space is almost 100% occupied, dominated by multinational companies (leases have been committed to 100% of the space, including the retail space). The loan benefits from good income diversification with over 76 leases in place and one pending lease, but, due to TECOM Free Zone regulations, they are all on a one-year lease term, exposing the transaction to significant re-letting risk. This is mitigated by TECOM providing a five-year rental guarantee, given that the tenants have spent a considerable amount to fit the space to their needs and the existence of a significant waiting list.

Interest and principal for the notes are paid quarterly in arrears on each payment date, commencing in September 2007. Amortisation on the loan is allocated sequentially.