Fitch Rates MSC 2006-SRR2.

NEW YORK -- Fitch assigns the following ratings to SPGS SPC, acting for the account of MSC 2006-SRR2 Segregated Portfolio:

--$72,000,000 class A-1 variable floating-rate notes due 2046 'AAA';

--$90,000,000 class A-2 variable floating-rate notes due 2046 'AAA';

--$38,400,000 class B variable floating-rate notes due 2046 'AA+';

--$28,200,000 class C variable fixed-rate notes due 2046 'AA';

--$12,600,000 class D variable floating-rate notes due 2046 'AA-';

--$14,800,000 class E variable floating-rate notes due 2046 'A+';

--$12,200,000 class F variable floating-rate notes due 2046 'A';

--$11,610,000 class G variable floating-rate notes due 2046 'A-';

--$18,750,000 class H variable floating-rate notes due 2046 'BBB+';

--$9,360,000 class J variable floating-rate notes due 2046 'BBB';

--$16,080,000 class K variable floating-rate notes due 2046 'BBB-';

--$12,480,000 class L variable floating-rate notes due 2046 'BB+';

--$6,510,000 class M variable floating-rate notes due 2046 'BB';

--$2,970,000 class N variable floating-rate notes due 2046 'BB-';

--$5,040,000 class O variable floating-rate notes due 2046 'B+';

--$2,160,000 class P variable floating-rate notes due 2046 'B';

--$1,320,000 class Q variable floating-rate notes due 2046 'B-'.

SPGS SPC, acting for the account of MSC 2006-SRR2 Segregated Portfolio (the issuer), incorporated under the laws of the Cayman Islands, is a static synthetic collateralized debt obligation (CDO) transaction that references a $1.2 billion portfolio. The portfolio consists of 60 separate 'BBB' rated commercial mortgage-backed security (CMBS) bonds. The transaction is designed to provide credit protection for realized losses on a reference portfolio through a credit default swap (CDS) between the issuer and the swap counterparty, Morgan Stanley Capital Services Inc. (MSCS). The legal maturity date of the CDS is 2046. The securities are rated to the timely payment of interest and the ultimate repayment of principal on the maturity date.

Proceeds from the issuance of the securities are invested in a pool of eligible investments, which are protected through the total return swap agreement (TRS) between the issuer and MSCS, the TRS counterparty. The payment obligations of the TRS counterparty are guaranteed by Morgan Stanley, the swap counterparty guarantor. Under the TRS agreement, MSCS will make periodic interest payments to the issuer and pay any depreciation in market value with respect to eligible collateral upon its disposition to the issuer, and the issuer will pay MSCS all the interest and similar amounts payable with respect to the eligible collateral. In addition, the issuer will pay to MSCS any appreciation in market value of the eligible collateral upon its disposition.

The ratings are based on the credit quality of the reference portfolio, the credit enhancement provided by subordination for each tranche, the strength of the counterparties, and the transaction's sound financial and legal structures.

For more information, please see the new issue report titled 'MSC 2006-SRR2', available on the Fitch web site at www.derivativefitch.com.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.derivativefitch.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. Fitch means Fitch, Inc., Fitch Ratings, Ltd. and their subsidiaries including Derivative Fitch, Inc. and Derivative Fitch Ltd. and any successor or successors thereto.