Fitch Places 2 Classes of N-45 First CMBS Issuer Corp., Series 2003-3 on Rating Watch Positive.

CHICAGO -- Fitch Ratings places the following two classes of N-45 First CMBS Issuer Corporation, series 2003-3 on Rating Watch Positive:

--C$47.6 million class B to 'AA';

--C$31.4 million class C to 'A'.

In addition, Fitch affirms the following classes:

--C$92.8 million class A-1 at 'AAA';

--C$228.5 million class A-2 at 'AAA';

--Interest only class IO at 'AAA';

--C$31.4 million class D at 'BBB-'; and

--C$3.7 million class E at 'BB+'.

The placement of the classes on Rating Watch Positive is due to the amortization of the loans and improved performance of the collateral. Since issuance, the deal has paid down 5.8% to its current balance of C$435.5 million as of the December 2006 remittance period. Performance of all three of the loans in the transaction has consistently improved since issuance through Year End (YE) 2005. If the improved performance continues as of YE 2006, it is highly likely that classes B and C could be upgraded. All three of the loans maintain investment grade credit assessments.

The Place Bell loan is the largest in the transaction at 34.8% of the balance. Located in Ottawa, Ontario, Canada, the loan is secured by a 989,802-square foot class A office building built in 1971 and renovated in the late 1990s. The Place Bell loan is full recourse to the sponsor. As of February 2006, Place Bell was 99.3% occupied compared to 98.9% at issuance. Bell Canada (rated 'BBB+' by Fitch), the largest tenant, at 48.6% of the net rentable area (NRA), is on a long-term lease until 2022.

Fifth Avenue Place, the second-largest loan in the transaction at 34.4%, is secured by two 34-story office towers totaling 1.5 million square feet (sf) in downtown Calgary. Approximately 48,000 sf of the properties consist of retail and storage space. The tenant base is concentrated in the oil and gas industry, such as Devon Estates (38.3%), which is owned by Imperial Oil Limited, Anadarko Canada (16.3%) (rated 'BBB' by Fitch), and Enbridge, Inc. (9.5%). Occupancy remained unchanged from issuance at 99.6% as of March 2006.

The final loan in the transaction is the Tour Bell loan at 30.8% of the pool. The Tour Bell loan is secured by two, 28-story office towers located in Montreal containing 975,661 sf of office space and 40,227 sf of connected underground retail space along with a 693-space parking facility. Of the retail space and parking, 79.2% and 63.0%, respectively, serve as collateral for the loan. The Tour Bell building houses Bell Canada's Canadian headquarters while the other tower is primarily occupied by National Bank of Canada's headquarters. As anticipated at issuance, Bell Canada exercised early termination rights on two portions of its space, known as Block A and Block B, totaling 307,258 sf (33.2% NRA).

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