Fitch Affirms $3.4B & Downgrades $812.2MM from 34 Morgan Stanley Subprime Transactions.

NEW YORK -- Fitch Ratings has taken the following rating actions on Morgan Stanley mortgage pass-through certificates. Affirmations total $3.4 billion and downgrades total $812.2 million. Additionally, $1.4 million was placed on Rating Watch Negative and $19.3 million was removed from Rating Watch Negative.

Morgan Stanley ABS Capital I Inc. 2003-HE1

--$49.5 million class M-1 affirmed at 'AA+';

--$26.4 million class M-2 affirmed at 'A+';

--$2.9 million class M-3 affirmed at 'A-';

--$2.8 million class B-1 affirmed at 'BBB+';

--$2.8 million class B-2 downgraded to 'BB' from 'BBB', removed from Rating Watch Negative;

--$3.3 million class B-3 downgraded to 'CC/DR2' from 'B-/DR1'.

Deal Summary

--Originators: Aames (54%), Accredited (30%)

--60+ day Delinquency: 21.20%

--Realized Losses to date (% of Original Balance): 1.87%

Morgan Stanley ABS Capital I Inc. Trust 2003-HE2

--$37.2 million class M-1 affirmed at 'AA';

--$17.1 million class M-2 affirmed at 'A';

--$1.9 million class M-3 affirmed at 'A-';

--$1.9 million class B-1 affirmed at 'BBB+';

--$1.9 million class B-2 affirmed at 'BBB';

--$1.4 million class B-3 rated 'BBB-', remains on Rating Watch Negative.

Deal Summary

--Originators: Wells Fargo (45%), Aames (41%)

--60+ day Delinquency: 19.43%

--Realized Losses to date (% of Original Balance): 1.19%

Morgan Stanley ABS Capital I Inc. 2003-HE3

--$2.1 million class A-3 affirmed at 'AAA';

--$37.4 million class M-1 affirmed at 'AA';

--$19.8 million class M-2 affirmed at 'A';

--$2.1 million class M-3 affirmed at 'A-';

--$2.1 million class B-1 affirmed at 'BBB+';

--$2.4 million class B-2 affirmed at 'BBB';

--$2.5 million class B-3 downgraded to 'B' from 'BB+'.

Deal Summary

--Originators: Aames (60%), Accredited (40%)

--60+ day Delinquency: 14.93%

--Realized Losses to date (% of Original Balance): 1.51%

Morgan Stanley Dean Witter Capital I Inc 2003-NC1

--$50.0 million class M-1 downgraded to 'A' from 'AA';

--$7.6 million class M-2 downgraded to 'BB+' from 'A-';

--$1.2 million class M-3 downgraded to 'BB' from 'BBB+';

--$5.5 million class B-1 downgraded to 'C/DR5' from 'B';

--$2.3 million class B-2 revised to 'C/DR6' from C/DR5'.

Deal Summary

--Originators: New Century

--60+ day Delinquency: 37.99%

--Realized Losses to date (% of Original Balance): 1.88%

Morgan Stanley Dean Witter Capital I Inc 2003-NC2

--$54.1 million class M-1 affirmed at 'AA';

--$7.7 million class M-2 affirmed at 'A+';

--$3.0 million class M-3 affirmed at 'A-';

--$4.6 million class B-1 downgraded to 'B-/DR1' from 'BB-';

--$1.6 million class B-2 downgraded to 'C/DR4' from 'B+'.

Deal Summary

--Originators: New Century

--60+ day Delinquency: 18.51%

--Realized Losses to date (% of Original Balance): 1.53%

Morgan Stanley Dean Witter Capital I Inc 2003-NC3

--$35.5 million class M-1 affirmed at 'AA';

--$5.1 million class M-2 affirmed at 'A+';

--$1.8 million class M-3 downgraded to 'BBB+' from 'A';

--$1.3 million class B-1 downgraded to 'BBB' from 'A-';

--$1.7 million class B-2 downgraded to 'B' from 'BB+';

--$1.4 million class B-3 downgraded to 'C/DR5' from 'B'.

Deal Summary

--Originators: New Century

--60+ day Delinquency: 20.97%

--Realized Losses to date (% of Original Balance): 1.61%

Morgan Stanley Dean Witter Capital I Inc 2003-NC4

--$34.3 million class M-1 affirmed at 'AA';

--$8.4 million class M-2 affirmed at 'A';

--$1.7 million class M-3 downgraded to 'BBB' from 'A-';

--$2.0 million class B-1 affirmed at 'B';

--$1.4 million class B-2 downgraded to 'CC/DR2' from 'B-/DR1';

--$1.1 million class B-3 downgraded to 'C/DR5' from 'B-/DR1'.

Deal Summary

--Originators: New Century

--60+ day Delinquency: 17.89%

--Realized Losses to date (% of Original Balance): 1.27%

Morgan Stanley ABS Capital I Inc. Trust 2003-NC5

--$52.8 million class M-1 affirmed at 'AA';

--$8.2 million class M-2 affirmed at 'A';

--$2.7 million class M-3 downgraded to 'BBB' from 'A-';

--$2.1 million class B-1 downgraded to 'B' from 'BB';

--$2.0 million class B-2 downgraded to 'CCC/DR2' from 'B';

--$2.2 million class B-3 downgraded to 'C/DR5' from 'B-/DR1'.

Deal Summary

--Originators: New Century

--60+ day Delinquency: 19.88%

--Realized Losses to date (% of Original Balance): 1.49%

Morgan Stanley ABS Capital I Inc. Trust 2003-NC6

--$41.5 million class M-1 affirmed at 'AA';

--$7.8 million class M-2 affirmed at 'A';

--$2.5 million class M-3 downgraded to 'BBB' from 'A-';

--$2.1 million class B-1 downgraded to 'B' from 'BB+';

--$1.4 million class B-2 downgraded to 'CCC/DR2' from 'B';

--$2.5 million class B-3 downgraded to 'C/DR5' from 'B-/DR1'.

Deal Summary

--Originators: New Century

--60+ day Delinquency: 18.69%

--Realized Losses to date (% of Original Balance): 1.81%

Morgan Stanley ABS Capital I Inc. Trust 2003-NC7

--$34.8 million class M-1 affirmed at 'AA';

--$4.9 million class M-2 affirmed at 'A';

--$1.6 million class M-3 affirmed at 'A-';

--$1.4 million class B-1 affirmed at 'BBB+';

--$1.1 million class B-2 affirmed at 'BB+';

--$1.7 million class B-3 downgraded to 'CCC/DR2' from 'B-/DR1'.

Deal Summary

--Originators: New Century

--60+ day Delinquency: 18.95%

--Realized Losses to date (% of Original Balance): 1.44%

Morgan Stanley ABS Capital I Inc. Trust 2003-NC8

--$87.1 million class M-1 affirmed at 'AA';

--$14.5 million class M-2 affirmed at 'A';

--$4.2 million class M-3 downgraded to 'BBB' from 'A-';

--$3.7 million class B-1 downgraded to 'BB+' from 'BBB+';

--$2.9 million class B-2 downgraded to 'BB' from 'BBB';

--$3.5 million class B-3 downgraded to 'BB-' from 'BBB-'.

Deal Summary

--Originators: New Century

--60+ day Delinquency: 21.26%

--Realized Losses to date (% of Original Balance): 1.21%

Morgan Stanley ABS Capital I Inc. Trust 2003-NC9

--$0.2 million class B downgraded to 'CCC/DR2' from 'BBB-'.

Deal Summary

--Originators: New Century

--60+ day Delinquency: 18.31%

--Realized Losses to date (% of Original Balance): 1.11%

Morgan Stanley ABS Capital I Inc. Trust 2003-NC10

--$88.9 million class M-1 affirmed at 'AA';

--$23.0 million class M-2 affirmed at 'A';

--$2.9 million class M-3 downgraded to 'BBB+' from 'A-';

--$3.3 million class B-1 downgraded to 'BBB-' from 'BBB+';

--$4.0 million class B-2 downgraded to 'BB-' from 'BBB-';

--$5.2 million class B-3 downgraded to 'C/DR5' from 'B'.

Deal Summary

--Originators: New Century

--60+ day Delinquency: 21.91%

--Realized Losses to date (% of Original Balance): 1.31%

Morgan Stanley ABS Capital I Inc. Trust 2004-HE1

--$33.3 million class A-4 affirmed at 'AAA';

--$103.0 million class M-1 affirmed at 'AA';

--$41.6 million class M-2 affirmed at 'A';

--$4.0 million class M-3 downgraded to 'BBB' from 'A-';

--$4.7 million class B-1 downgraded to 'BBB-' from 'BBB+';

--$4.7 million class B-2 downgraded to 'BB' from 'BBB';

--$4.6 million class B-3 downgraded to 'B' from 'BB'.

Deal Summary

--Originators: New Century (44%), Aames (36%)

--60+ day Delinquency: 19.36%

--Realized Losses to date (% of Original Balance): 1.17%

Morgan Stanley ABS Capital I Inc. Trust 2004-HE2

--$112.4 million class M-1 affirmed at 'AA';

--$41.1 million class M-2 affirmed at 'A';

--$4.0 million class M-3 affirmed at 'A-';

--$4.1 million class B-1 downgraded to 'BBB' from 'BBB+';

--$3.1 million class B-2 downgraded to 'BBB-' from 'BBB';

--$3.1 million class B-3 downgraded to 'BB' from 'BBB-'.

Deal Summary

--Originators: New Century (56%), Aames (26%)

--60+ day Delinquency: 18.35%

--Realized Losses to date (% of Original Balance): 1.10%

Morgan Stanley ABS Capital I Inc. Trust 2004-HE3

--$0.4 million class A-2 affirmed at 'AAA';

--$8.4 million class A-4 affirmed at 'AAA';

--$75.7 million class M-1 affirmed at 'AA';

--$40.7 million class M-2 affirmed at 'A';

--$11.6 million class M-3 affirmed at 'A-';

--$3.4 million class B-1 affirmed at 'BBB+';

--$3.0 million class B-2 downgraded to 'BBB-' from 'BBB', removed from Rating Watch Negative;

--$3.3 million class B-3 affirmed at 'B'.

Deal Summary

--Originators: New Century (49%), Aames (40%)

--60+ day Delinquency: 16.30%

--Realized Losses to date (% of Original Balance): 1.37%

Morgan Stanley ABS Capital I Inc. Trust 2004-HE4

--$89.8 million class M-1 affirmed at 'AA';

--$75.6 million class M-2 downgraded to 'A-' from 'A';

--$12.4 million class M-3 downgraded to 'BBB' from 'A-';

--$5.6 million class B-1 downgraded to 'BB+' from 'BBB+', removed from Rating Watch Negative;

--$6.7 million class B-2 affirmed at 'B';

--$5.9 million class B-3 downgraded to 'C/DR5' from 'B-/DR1'.

Deal Summary

--Originators: New Century (55%), Aames (37%)

--60+ day Delinquency: 22.62%

--Realized Losses to date (% of Original Balance): 1.41%

Morgan Stanley ABS Capital I, Inc. 2004-HE5

--$65.9 million class M-1 affirmed at 'AA';

--$58.9 million class M-2 downgraded to 'BBB+' from 'A';

--$7.5 million class M-3 downgraded to 'BBB' from 'A-';

--$4.7 million class B-1 downgraded to 'BB+' from 'BBB+';

--$4.5 million class B-2 downgraded to 'BB' from 'BBB';

--$3.9 million class B-3 downgraded to 'BB-' from 'BBB-'.

Deal Summary

--Originators: New Century (70%), Accredited (30%)

--60+ day Delinquency: 21.21%

--Realized Losses to date (% of Original Balance): 1.17%

Morgan Stanley ABS Capital I Inc. Trust 2004-HE6

--$4.9 million class A-1 affirmed at 'AAA';

--$14.3 million class A-2 affirmed at 'AAA';

--$38.6 million class M-1 affirmed at 'AA+';

--$38.6 million class M-2 affirmed at 'AA';

--$20.8 million class M-3 affirmed at 'AA-';

--$38.6 million class M-4 affirmed at 'A';

--$20.8 million class M-5 affirmed at 'A-';

--$14.9 million class B-1 downgraded to 'BBB' from 'BBB+';

--$6.4 million class B-2 downgraded to 'BB' from 'BBB';

--$5.7 million class B-3 downgraded to 'B' from 'BB'.

Deal Summary

--Originators: Accredited (66%), New Century (34%)

--60+ day Delinquency: 20.31%

--Realized Losses to date (% of Original Balance): 1.25%

Morgan Stanley ABS Capital I Inc. Trust 2004-HE7

--$36.6 million class M-1 affirmed at 'AA+';

--$36.1 million class M-2 affirmed at 'AA';

--$23.9 million class M-3 affirmed at 'AA-';

--$42.9 million class M-4 affirmed at 'A';

--$19.8 million class M-5 downgraded to 'BBB' from 'A-';

--$9.9 million class B-1 downgraded to 'BB+' from 'BBB+';

--$3.5 million class B-2 downgraded to 'BB' from 'BBB';

--$4.0 million class B-3 downgraded to 'B' from 'BB'.

Deal Summary

--Originators: Aames (64%), New Century (36%)

--60+ day Delinquency: 22.72%

--Realized Losses to date (% of Original Balance): 1.57%

Morgan Stanley ABS Capital I Inc. Trust 2004-HE8

--$2.7 million class A-4 affirmed at 'AAA';

--$4.3 million class A-7 affirmed at 'AAA';

--$39.8 million class M-1 affirmed at 'AA+';

--$41.2 million class M-2 affirmed at 'AA';

--$23.7 million class M-3 affirmed at 'AA-';

--$21.0 million class M-4 affirmed at 'A+';

--$19.6 million class M-5 affirmed at 'A';

--$18.9 million class M-6 affirmed at 'A-';

--$16.1 million class B-1 downgraded to 'BBB-' from 'BBB+';

--$14.0 million class B-2 downgraded to 'BB' from 'BBB';

--$14.0 million class B-3 downgraded to 'BB-' from 'BBB-'.

Deal Summary

--Originators: New Century (71%), Aames (29%)

--60+ day Delinquency: 21.95%

--Realized Losses to date (% of Original Balance): 1.15%

Morgan Stanley ABS Capital I Inc. Trust 2004-HE9

--$77.5 million class M-1 affirmed at 'AA+';

--$54.9 million class M-2 affirmed at 'AA';

--$29.2 million class M-3 downgraded to 'A+' from 'AA-';

--$28.3 million class M-4 downgraded to 'BBB+' from 'A+';

--$24.9 million class M-5 downgraded to 'BBB' from 'A';

--$22.3 million class M-6 downgraded to 'BBB-' from 'A-';

--$9.2 million class B-1 downgraded to 'BB' from 'BBB+';

--$5.2 million class B-2 downgraded to 'BB' from 'BBB';

--$6.0 million class B-3 downgraded to 'BB-' from 'BBB-'.

Deal Summary

--Originators: New Century (56%), Aames (25%)

--60+ day Delinquency: 22.62%

--Realized Losses to date (% of Original Balance): 1.10%

Morgan Stanley ABS Capital I Inc. Trust 2004-NC1

--$84.4 million class M-1 affirmed at 'AA';

--$73.0 million class M-2 affirmed at 'A';

--$12.1 million class M-3 affirmed at 'A-';

--$4.8 million class B-1 affirmed at 'BBB+';

--$4.8 million class B-2 affirmed at 'BBB';

--$5.0 million class B-3 affirmed at 'BBB-'.

Deal Summary

--Originators: New Century (100%)

--60+ day Delinquency: 11.14%

--Realized Losses to date (% of Original Balance): 1.08%

Morgan Stanley ABS Capital I Inc. Trust 2004-NC2

--$42.6 million class M-1 affirmed at 'AA';

--$22.8 million class M-2 affirmed at 'A';

--$2.1 million class M-3 downgraded to 'BBB' from 'A-';

--$2.5 million class B-1 downgraded to 'B' from 'BBB+';

--$2.1 million class B-2 downgraded to 'B-/DR2' from 'BBB';

--$1.6 million class B-3 downgraded to 'B-/DR2' from 'BB';

--$0.8 million class B-4 downgraded to 'C/DR4' from 'B'.

Deal Summary

--Originators: New Century (100%)

--60+ day Delinquency: 16.32%

--Realized Losses to date (% of Original Balance): 1.21%

Morgan Stanley ABS Capital I Inc. Trust 2004-NC3

--$79.9 million class M-1 affirmed at 'AA';

--$42.6 million class M-2 downgraded to 'A-' from 'A';

--$4.4 million class M-3 downgraded to 'BBB' from 'A-';

--$3.9 million class B-1 downgraded to 'BB+' from 'BBB+';

--$4.2 million class B-2 downgraded to 'BB' from 'BBB';

--$4.3 million class B-3 downgraded to 'C/DR5' from 'B+';

--$1.2 million class B-4 downgraded to 'C/DR6' from 'B'.

Deal Summary

--Originators: New Century (100%)

--60+ day Delinquency: 24.06%

--Realized Losses to date (% of Original Balance): 1.14%

Morgan Stanley ABS Capital I Inc. Trust 2004-NC4

--$45.6 million class M-1 affirmed at 'AA';

--$38.0 million class M-2 affirmed at 'A';

--$9.1 million class M-3 affirmed at 'A-';

--$3.4 million class B-1 downgraded to 'BBB' from 'BBB+';

--$2.6 million class B-2 downgraded to 'BB+' from 'BBB';

--$2.4 million class B-3 downgraded to 'B' from 'BB';

--$2.6 million class B-4 downgraded to 'C/DR5' from 'CCC/DR1'.

Deal Summary

--Originators: 100% New Century

--60+ day Delinquency: 16.12%

--Realized Losses to date (% of Original Balance): 1.16%

Morgan Stanley ABS Capital I Inc. Trust 2004-NC5

--$42.2 million class M-1 affirmed at 'AA';

--$38.0 million class M-2 affirmed at 'A';

--$7.3 million class M-3 downgraded to 'BBB+' from 'A-';

--$3.0 million class B-1 downgraded to 'BBB-' from 'BBB+';

--$2.5 million class B-2 downgraded to 'BB-' from 'BB+';

--$1.9 million class B-3 affirmed at 'B'.

Deal Summary

--Originators: New Century

--60+ day Delinquency: 21.17%

--Realized Losses to date (% of Original Balance): 1.00%

Morgan Stanley ABS Capital I Inc. Trust 2004-NC6

--$76.0 million class M-1 affirmed at 'AA';

--$66.0 million class M-2 affirmed at 'A';

--$6.8 million class M-3 affirmed at 'A-';

--$5.3 million class B-1 downgraded to 'BBB' from 'BBB+';

--$4.3 million class B-2 downgraded to 'BB+' from 'BBB';

--$4.7 million class B-3 downgraded to 'B' from 'BBB-', removed from Rating Watch Negative.

Deal Summary

--Originators: New Century

--60+ day Delinquency: 18.18%

--Realized Losses to date (% of Original Balance): 1.12%

Morgan Stanley ABS Capital I Inc. Trust 2004-NC7 Total Pool

--$33.4 million class M-1 affirmed at 'AA+';

--$39.0 million class M-2 affirmed at 'AA';

--$24.0 million class M-3 affirmed at 'AA-';

--$39.0 million class M-4 affirmed at 'A';

--$21.0 million class M-5 downgraded to 'BBB+' from 'A-';

--$15.0 million class B-1 downgraded to 'BBB-' from 'BBB+';

--$13.3 million class B-2 downgraded to 'BB' from 'BBB';

--$6.2 million class B-3 downgraded to 'B' from 'BBB-'.

Deal Summary

--Originators: New Century

--60+ day Delinquency: 19.79%

--Realized Losses to date (% of Original Balance): 1.38%

Morgan Stanley ABS Capital I Trust 2004-NC8

--$54.7 million class M-1 affirmed at 'AA+';

--$41.9 million class M-2 affirmed at 'AA';

--$18.0 million class M-3 affirmed at 'AA-';

--$21.0 million class M-4 affirmed at 'A+';

--$18.0 million class M-5 affirmed at 'A';

--$18.0 million class M-6 affirmed at 'A-';

--$13.2 million class B-1 affirmed at 'BBB+';

--$7.7 million class B-2 affirmed at 'BBB';

--$4.7 million class B-3 affirmed at 'BBB-'.

Deal Summary

--Originators: New Century

--60+ day Delinquency: 13.75%

--Realized Losses to date (% of Original Balance): 0.88%

Morgan Stanley ABS Capital I Inc. Trust 2004-OP1

--$50.3 million class M-1 affirmed at 'AA+';

--$44.9 million class M-2 affirmed at 'AA';

--$28.6 million class M-3 affirmed at 'AA-';

--$24.8 million class M-4 affirmed at 'A+';

--$22.5 million class M-5 affirmed at 'A';

--$18.6 million class M-6 affirmed at 'A-';

--$18.6 million class B-1 affirmed at 'BBB+';

--$12.4 million class B-2 affirmed at 'BBB';

--$10.6 million class B-3 affirmed at 'BBB-'.

Deal Summary

--Originators: Option One Mortgage Corporation

--60+ day Delinquency: 19.74%

--Realized Losses to date (% of Original Balance): 0.86%

Morgan Stanley ABS Capital I Inc. Trust 2004-WMC1

--$40.5 million class M-1 affirmed at 'AA';

--$28.7 million class M-2 affirmed at 'A';

--$2.5 million class M-3 affirmed at 'A-';

--$2.5 million class B-1 affirmed at 'BBB+';

--$2.7 million class B-2 affirmed at 'BBB'.

Deal Summary

--Originators: WMC Mortgage Corp. (100%)

--60+ day Delinquency: 15.79%

--Realized Losses to date (% of Original Balance): 0.93%

Morgan Stanley ABS Capital I Inc. 2004-WMC2

--$84.0 million class M-1 affirmed at 'AA';

--$48.4 million class M-2 affirmed at 'A';

--$5.5 million class M-3 affirmed at 'A-';

--$4.7 million class B-1 affirmed at 'BBB+';

--$3.9 million class B-2 affirmed at 'BBB'.

Deal Summary

--Originators: WMC Mortgage Corp. (100%)

--60+ day Delinquency: 16.58%

--Realized Losses to date (% of Original Balance): 0.78%

Morgan Stanley ABS Capital I Inc. Trust 2004-WMC3

--$31.0 million class M-1 affirmed at 'AA+';

--$35.1 million class M-2 affirmed at 'AA';

--$21.5 million class M-3 downgraded to 'A-' from 'AA-';

--$19.3 million class M-4 downgraded to 'BBB+' from 'A+';

--$14.4 million class M-5 downgraded to 'BBB' from 'A';

--$4.3 million class M-6 downgraded to 'BB+' from 'A-';

--$3.7 million class B-1 downgraded to 'BB' from 'BBB+';

--$3.1 million class B-2 downgraded to 'BB' from 'BBB', removed from Rating Watch Negative;

--$4.0 million class B-3 affirmed at 'B'.

Deal Summary

--Originators: WMC Mortgage Corporation (100%)

--60+ day Delinquency: 31.91%

--Realized Losses to date (% of Original Balance): 1.63%

Additional details are available in the following research, available at www.fitchratings.com:

--'Downgrade Criteria for Recent Vintage U.S. Subprime RMBS' (Aug. 8, 2007);

All of Fitch's ratings criteria for U.S. subprime RMBS available at www.fitchratings.com/subprime. For a list of deals currently under analysis please visit www.fitchratings.com/smartview.

Further information regarding current delinquency, loss, and credit enhancement statistics is also available at www.fitchratings.com.

Fitch's Distressed Recovery (DR) ratings are designed to estimate recoveries on a forward-looking basis while taking into account the time value of money.

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.