Fitch Affirms LB-UBS 2007-C7; Assigns Outlooks.

NEW YORK -- Fitch Ratings has taken various rating actions on LB-UBS 2007-C7, commercial mortgage pass-through certificates. In addition, Fitch has assigned Rating Outlooks, as applicable. A detailed list of rating actions follows at the end of this press release.

The downgrades are the result of Fitch's loss expectations on specially serviced loans as well as prospective views regarding commercial real estate market value and cash flow declines. Fitch forecasts potential losses of 5.9% for this transaction, should market conditions not recover. Today's rating actions are based on losses of 4.0% including 100% of the losses associated with term defaults and any losses associated with maturities within the next five years. Given the significant term to maturity, Fitch's actions only account for 25% of the losses associated with maturities beyond five years. The bonds with Negative Outlooks indicate classes that may be downgraded in the future should full potential losses be realized.

Fitch analyzed the transaction and calculated expected losses by assuming cash flows on each of the properties decline 15% from year-end (YE) 2007 and property values decline 35% from issuance. These loss estimates were reviewed in more detail for loans representing 81.4% of the pool and, in certain cases, revised based on additional information and/or property characteristics.

Approximately 10.9% of the mortgages are scheduled to mature within the next five years, with 10.5% maturing in 2013. In 2017, 81.7% of the pool is scheduled to mature.

Fitch identified 16 Loans of Concern (22.3%) within the pool, one of which (0.3%) are specially serviced. All of the top 15 loans (76.9%) are current as of the August 2009 payment date.

Four of the top 15 loans (13.7% of the pool) are expected to default during the term or at maturity, with loss severities ranging from approximately 3% to 23%. Of the top 15 loans, the largest contributors (by loan balance) to term losses are as follows: District at Tustin Legacy (6.5% of the pool balance), Nashville Multifamily Portfolio (3.7%) and Meyerland Plaza (2.9%).

District at Tustin Legacy is secured by a 985,684 square foot (sf) retail center located in Tustin, CA. The property is anchored by Costco and Lowe's (not part of the collateral) as well as Target, Whole Foods, TJ Maxx, AMC Theaters, and Best Buy. As of June 30, 2009 the property was 99% occupied and near term lease expirations are limited as tenants were signed when the property was constructed in 2006. The property has been unable to achieve the rents expected at issuance, which led to a YE 2008 servicer reported debt service coverage ratio (DSCR) of .90 times (x). The loan is sponsored by Lee and Nancy Hanley along with Kimco Realty.

The Nashville Multifamily Portfolio is collateralized by a four property, 1,593 unit, multifamily portfolio located in the Nashville, TN MSA. Property performance has declined since issuance and as of YE 2008 occupancy was 84%, down from 95% at issuance. Performance has also been hindered by increased expenses which offset a recent jump in occupancy to 91% for per the March 30, 2009 rent roll. The servicer reported YE 2008 DSCR was 0.94x, down from 1.25x at issuance. The loan is sponsored by New Dawn Companies.

The Meyerland Plaza loan is collateralized by a 936,543 sf retail center in Houston, TX. The property is anchored by JC Penney and Target, which is not part of the collateral. The property is currently 91% occupied down from 99% at issuance. The property is also subject to significant near term lease expirations including 19.5% in 2010 (Old Navy, Bed, Bath & Beyond, Office Max, and Stein Mart) and 36.2% in 2012, which includes JC Penney. Servicer reported YE 2008 DSCR was 1.14x. The loan is sponsored by Ronus, Inc., an owner and developer of commercial real estate in the eastern U.S.

Fitch downgrades, removes from Rating Watch Negative, and assigns Loss Severity (LS) ratings and Negative Outlooks to the following classes:

--$269.5 million class A-J to 'AA/LS-3' from 'AAA';

--$47.6 million class B to 'A/LS-5' from 'AA+';

--$35.7 million class C to 'BBB/LS-5' from 'AA';

--$23.8 million class D to 'BBB-/LS-5' from 'AA-';

--$27.7 million class E to 'BB/LS-5' from 'A+';

--$15.9 million class F to 'BB/LS-5' from 'A';

--$31.7 million class G to 'BB/LS-5' from 'A-';

--$27.7 million class H to 'B/LS-5' from 'BBB+';

--$23.8 million class J to 'B/LS-5' from 'BBB';

--$27.7 million class K to 'B-/LS-5' from 'BBB-';

--$19.8 million class L to 'B-/LS-5' from 'BB+';

--$11.9 million class M to 'B-/LS-5' from 'BB';

--$11.9 million class N to 'B-/LS-5' from 'BB-';

--$4 million class P to 'B-/LS-5' from 'B+';

--$4 million class Q to 'B-/LS-5' from 'B'.

Fitch affirms the following class, removes it from Rating Watch Negative, and assigns an LS rating and Negative Outlook:

--$3.9 million class S at 'B-/LS-5'.

Additionally, Fitch affirms the following classes, assigns LS ratings and maintains a Stable Outlook:

--$16.1 million class A-1 at 'AAA/LS-1';

--$194 million class A-2 at 'AAA/LS-1';

--$74 million class A-AB at 'AAA/LS-1';

--$1.7 billion class A-3 at 'AAA/LS-1';

--$265.1 million class A-1A at 'AAA/LS-1';

--$317.0 million class A-M at 'AAA/LS-3';

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

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

--Interest-only class X-W at 'AAA'.

The $47.6 million class T is not rated by Fitch.

Additional information on Fitch's amended criteria for analyzing recent vintage U.S. CMBS is available in the July 8, 2009 report, 'Surveillance Methodology for Recent Vintage U.S. CMBS,' which is available at 'www.fitchratings.com' under the following headers:

Structured Finance >> CMBS >> Criteria Reports

Fitch will release a report titled 'LB-UBS 2007-C7' that will contain a graph of revised loss expectations for the transaction at 'www.fitchratings.com' under the following headers:

Structured Finance >> CMBS >> Special Reports

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.