Aetna 1997-ALIC Classes F Through J Upgraded By Fitch Ratings.

Business Editors

NEW YORK--(BUSINESS WIRE)--Aug. 22, 2002

Aetna Commercial Mortgage Trust's multiclass pass-through certificates, series 1997-ALIC are upgraded by Fitch Ratings as follows: $44.1 million class F to 'BBB' from 'BB+', $8 million class G to 'BBB-' from 'BB', $14 million class H to 'BB-' from 'B+' and $26.1 million class J to 'B+' from 'B'. Fitch also affirms the following certificates: $66 million class A-2, interest-only class IO and $64.2 million class B certificates at 'AAA', $68.2 million class C at 'AA+', $48.2 million class D at 'A+' and 20.1 million class E at 'A-'. The $20.1 million class K and $28.9 million class L certificates were not rated by Fitch. The rating actions follow Fitch's annual review of the transaction, which closed in December 1997.

The upgrades reflect increases in credit enhancement levels due to amortization and loan payoffs. As of the August 2002 distribution date, the pool's collateral balance has been reduced by 49%, from $802.7 million at closing to $408 million. No loans are currently delinquent. Twenty loans have paid off since closing. Midland Loan Services, L.P. (Midland), the master servicer, collected 94% (by balance) of the year-end (YE) 2001 property financial statements. The YE-2001 weighted average debt service coverage ratio (WADSCR) for these loans was 1.59 times (x) compared to 1.36x (for the same loans) at closing. Meanwhile, the WADSCR for the top five loans increased to 1.25x from 1.21x during the same period.

The certificates are currently collateralized by 20 fixed-rate mortgage loans, with significant concentrations in New York (20%), New Jersey (18%), and California (16%). Of concern is increased office (61% of the pool from 50% at closing) and retail (27% from 16% closing) exposure. The largest loan in the pool (20%) is secured by a super-regional shopping center in Poughkeepsie, NY. The property's performance has been stable, with the YE-2001 DSCR of 1.20x vs. 1.22x at closing.

Two loans (6.7%) are currently being specially serviced. The largest of these loans (5.23%) is secured by an office property in Birmingham, AL. Since the borrower was unable to refinance the loan at maturity (January 2002), a one-year extension has been negotiated. Current occupancy at the property is 82%. The second loan (1.5%) is secured by a retail property in Chesapeake, VA. The loan matured in 2000 but the borrower has been unable to refinance the loan due to occupancy issues. Farm Fresh, a supermarket occupying 49% of the net rentable area (NRA), vacated in 1998, but continues to make lease payments; their lease expires in 2005. The property is currently 85% leased and 35% occupied. The loan maturity date has been extended until 2003 and is likely to be extended several more times.

As of the August 2002 distribution date, five loans representing 13.4% of pool were on Midland's watchlist, including three loans (2.6%) with upcoming maturities. The largest loan on the watchlist (8.2%) is secured by an office property in Hackensack, NJ. The property's occupancy remains very low, at 51%, after the County of Bergen, occupying 49% of the NRA, vacated in 2001. The loan terms have been modified and the borrower had to deposit additional funds into an escrow account to lease the property and as additional collateral.

Realized losses total $3.2 million, due to a loan, secured by a retail property in Plaistaw, NH in the process of foreclosure, which was sold to a new buyer in July 2002. Service Merchandise, which had occupied 44% of the property, announced that they were liquidating and vacated recently.

Fitch applied various hypothetical stress scenarios taking into consideration all of the above concerns. Even under these stress scenarios, subordination levels remain sufficient to upgrade ratings. Fitch will continue to monitor this transaction, as surveillance is ongoing.