Fitch Downgrades 2 Classes Of Prudential Securities 1995-MCF2.

Business Editors

Prudential Securities Secured Financing Corp.'s commercial mortgage pass-through certificates, series 1995-MCF2, $12.2 million class G is downgraded to 'B+' from 'BB+' by Fitch Ratings. In addition, Fitch also downgrades the $6.7 million class H to 'CCC' from 'B-'. The remaining Fitch-rated classes are affirmed as follows: $30.1 million class A-2, interest only class A-EC, $8.9 million class B, $13.3 million class C and $8.9 million class D at 'AAA', $15.6 million class E at 'A+' and $5.6 million class F at 'BBB+'. Fitch does not rate the $6.7 million class J-1 or $6.7 million class J-2. Class A-1 has paid off. The downgrades and affirmations follow Fitch's annual review of the transaction, which closed in December 1995.

The downgrades are primarily due to the deterioration in the pool attributed to expected losses on specially serviced loans, interest shortfalls currently affecting classes G, H and J-2, increasing concentrations of retail and health care loans and an increase in loans with debt service coverage ratios (DSCR) less than 1.00x. The affirmations are primarily the result of substantial collateral paydown from issuance (50%) and also from Fitch's last review in July 2001 (20%). The paydown increase and subsequent subordination levels to all classes provide protection to the investment grade rated classes.

The second largest loan in the pool is currently real estate owned (REO). It is collateralized by a health care property in Chattanooga, TN and is currently 5.2% of the outstanding pool balance. The property transferred to the special servicer, Lennar Partners Inc., after the indirect owner filed chapter 11 bankruptcy in March 2000. The special servicer is currently working on renovations to address deferred maintenance and over half of the 143 units have been fully repaired. The occupancy is 59% and the special servicer continues in its efforts to lease up the vacant units to maximize the value. Despite these efforts, Fitch assumed a loss of approximately 50% to the exposure of the loan, which includes the loan amount and servicer advances. Midland Loan Services, as master servicer, made a non-recoverable advance determination in March 2002. Midland has spread out the recovery of these advances and any future advances over several months and as a result, the interest shortfalls remain at the non-investment grade rated classes and are expected to stop as of the August 2002 distribution date. Fitch remains concerned with the potential for interest shortfalls as any expenses incurred by the special servicer attributed to this property will continue to cause interest shortfalls as they will be applied directly to the bonds as a trust expense.

Other specially serviced assets with expected losses include two cross collateralized and cross defaulted health care loans with a combined loan balance of $4.6 million, or 2.7% of the pool. These loans transferred to the special servicer after the indirect owner filed bankruptcy in March 2000. The properties are located in Bristol, VA and San Antonio, TX. The San Antonio property has not performed well for several years and the special servicer plans to sell this property. The San Antonio property's allocated debt of $1.3 million will be added to the Bristol property's debt as a second lien. A March 2002 appraisal valued this property at $5.1 million and the special servicer plans to return the Bristol loan with the second lien to the master servicer. However, due to an exposure of $5.4 million due to advances and allocated debt of both properties, Fitch assumed a loss attributed to this loan. Additionally, the master servicer made a non-recoverable advance determination in January 2002 and Fitch is again concerned that the properties will continue to cause interest shortfalls as expenses are applied directly to the trust.

Fitch also expects losses attributed to a loan collateralized by a multifamily property located in Bowling Green, KY, which is currently 2.2% of the overall pool balance. The property has been REO since 1998 and has a total loan exposure, including advances, of $4.6 million, or 4.1% of the overall balance. Midland made a non-recoverable advance determination on this loan in November 2001, which will also result in interest shortfalls.

An additional concern is a health care property, with a loan amount currently 2.2% of the deal, transferred to the special servicer in May 2002 after the owner lost the operating license. The loan is a participation in a total loan with one half securitized in this portfolio and half in another Prudential Securities Secured Financing Corp. transaction. The property is located in Brooklyn, NY and is a facility for the adult mentally ill. While the loan remains current, several non-payment issues, including property and patient neglect were reported and Fitch is concerned with a potential loss attributed to this loan.

Increasing health care and retail concentrations are also of concern. Loans backed by health care properties currently consist of 11.4% of the pool compared to 6% at issuance. Currently, none of the health care loans are performing. The retail concentration has increased to 50% from 44% at issuance, of which 17% of the current concentration consists of single-tenant properties. However, this concern is mitigated by the strong performance of the majority of the retail properties, with a year-end 2001 DSCR of 2.18x compared to 1.41x at issuance using 85% of the retail loans reported financial information.

The overall weighted average DSCR for the entire pool has increased from issuance using the year-end 2001 information for the 84.9% of loans that reported financial statements. The DSCR was 1.81x compared to 1.44x at issuance, which excludes the negative DSCR for the Chattanooga, TN health care center. While the overall DSCR improvement is seen as a strength, Fitch is concerned that loans with DSCRs less than 1.0x increased to 14.4% as of year-end 2001 from 6.4% as of year-end 2000.

Fitch analyzed each of the 51 remaining loans and assumed loans of concern would default at higher than expected probabilities and loss severities. Loans of concern included all specially serviced loans (16% of the pool balance), one watch list loan (2.7%) and loans with DSCRs less than 1.00x. The required subordination levels based on this remodeling of the pool were higher than the current levels accounting for the expected losses, and were not sufficient to support the ratings of the classes downgraded. In addition, Fitch recognizes the timing of the payment of interest in its ratings and will continue to monitor the interest shortfalls and the future likelihood of repayment.