Fitch Ratings Upgrades LNR CDO 2002-1.

NEW YORK -- Fitch Ratings upgrades 11 classes and affirms one class of the notes issued by LNR CDO 2002-1, (LNR 2002) as follows:

--$98,077,000 class A notes affirmed at 'AAA';

--$80,000,000 class B notes upgraded to 'AAA' from 'AA';

--$25,000,000 class C notes upgraded to 'AA' from 'A';

--$40,150,000 class D-FX notes upgraded to 'A+' from 'A-';

--$45,000,000 class D-FL notes upgraded to 'A+' from 'A-;

--$22,000,000 class E-FX notes upgraded to 'A-' from 'BBB';

--$33,059,000 class E-FXD notes upgraded to 'A-' from 'BBB';

--$21,000,000 class E-FL notes upgraded to 'A-' from 'BBB';

--$25,000,000 class F-FX notes upgraded to 'BBB+' from 'BBB-';

--$27,041,000 class F-FL notes upgraded to 'BBB+' from 'BBB-';

--$40,032,000 class G notes upgraded to 'BB+' from 'BB';

--$54,042,000 class H notes upgraded to 'B+' from 'B'.

LNR 2002 is a collateralized debt obligation, which closed July 9, 2002. The portfolio supporting LNR is composed of investment grade and non-investment grade or unrated CMBS assets. LNR 2002 is a static transaction; the asset manager's role is limited to monitoring and substituting collateral assets that fail to meet specified eligibility criteria. LNR Partners, Inc. selected the initial collateral and serves as the collateral administrator.

The upgrades are driven primarily by the improved credit quality and the seasoning of the collateral. Since issuance, 23.6% of the portfolio has been upgraded and 9.7% downgraded. LNR 2002 has also benefited from four years of collateral seasoning, reducing the overall weighted average life of the portfolio. All overcollateralization and interest coverage ratios have remained stable, with only slight deterioration since inception.

According to the July 2006 trustee report, approximately $76.9 million in assets are considered defaulted with cumulative losses to date of roughly $71.1 million. Fitch remodeled the pool assuming little to no recoveries on all currently defaulted assets and those rated 'CCC' and below, approximately $106.2 million. Based on this worst case scenario and given the size of the preferred shares ($290.2 million), the upgrades are warranted.

The ratings of the class A and B notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The ratings of the class C, D, E, F, G and H notes address the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the stated balance of principal by the legal final maturity date.

Fitch will continue to monitor and review this transaction for future rating adjustments. Additional deal information and historical data are available on the Fitch Ratings web site at www.fitchratings.com. (For more information on the Fitch VECTOR model, see 'Global Rating Criteria for Collateralised Debt Obligations,' dated Sept. 13, 2004, also available at www.fitchratings.com.)

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.