Fitch Rates Morgan Stanley ABS Capital I Inc. Trust Series 2004-HE1.

Business Editors

NEW YORK--(BUSINESS WIRE)--Feb. 26, 2004

Morgan Stanley ABS Capital I Inc. Trust 2004-HE1's mortgage pass-through certificates are rated as follows by Fitch Ratings:

-- $1.5 billion class A-1, A-2, A-3 and A-4 'AAA';

-- $103 million class M-1 'AA';

-- $47.2 million class M-2 'A';

-- $17.2 million class M-3 'A-;,

-- $17.2 million class B-1 'BBB+';

-- $17.2 million class B-2 'BBB';

-- $17.2 million class B-3 'BBB-'.

Credit enhancement for the 'AAA' class A certificates reflects the 12.75% subordination provided by classes M-1 through M-3 and B-1 through B3, monthly excess interest, and initial overcollateralization (OC) of 1.75%. Credit enhancement for the 'AA' class M-1 certificates reflects the 6.75% subordination provided by class M-2, M-3, B-1, B-2 and B-3, monthly excess interest, and initial OC. Credit enhancement for the 'A' class M-2 certificates reflects the 4% subordination provided by class M-3, B-1, B-2, and B-3, monthly excess interest, and initial OC. Credit enhancement for the 'A-' class M-3 certificates reflects the 3% subordination provided by class B-1, B-2, and B-3, monthly excess interest, and initial OC. Credit enhancement for the 'BBB+' class B-1 certificates reflects the 2% subordination provided by class B-2 and B-3, monthly excess interest, and initial OC. Credit enhancement for the 'BBB' class B-2 certificates reflects the 1% subordination provided by class B-3, monthly excess interest, and initial OC. Credit enhancement for the 'BBB-' rating on the class B-3 is supported by monthly excess interest and initial OC of 1.75%.

In addition, the ratings reflect the integrity of the transaction's legal structure as well as the capabilities of Chase Manhattan Mortgage Corporation and Countrywide Home Loans Servicing LP as servicers. Deutsche Bank National Trust Company will act as trustee.

The mortgage pool consists of closed-end, first and second lien fixed-rate and adjustable-rate subprime mortgage loans with an aggregate principal balance of $1,716,123,429. Approximately 69.79% of the mortgage loans are adjustable-rate and 30.21% are fixed-rate loans. As of the cut-off date (Feb. 1, 2004), the weighted average loan rate is approximately 7.338%. The weighted average remaining term to maturity (WAM) is 348 months. The average cut-off date principal balance of the mortgage loans is approximately $159,387. The weighted average original combined loan-to-value ratio (CLTV) is 79.65%. The properties are primarily located in California (37.09%), Florida (10.51%), and New York (6.69%).

Substantially all of the mortgage loans were purchased by an affiliate of the depositor from Aames Capital Corporation, Accredited Home Lenders Inc., and New Century Capital Corporation, which in turn were acquired from New Century Mortgage Corporation. New Century Mortgage Corporation, a wholly-owned subsidiary of New Century Financial Corporation, is a consumer finance and mortgage banking company that originates, sells and services first and second mortgage loans and other consumer loans. New Century emphasizes the origination of mortgage loans that are commonly referred to as non-conforming 'B&C' loans. New Century commenced lending operations on Feb. 26, 1996.