Fitch Ratings Upgrades NASC 1994-MDI Class B-1.

CHICAGO -- Nomura Asset Securities Corp. (NASC), commercial mortgage pass-through certificates, series 1994-MD1, class B-1 is upgraded to 'BB-' from 'CCC' and removed from Rating Watch Positive.

In addition, the following classes are affirmed:

--$16.0 million class A-3 at 'AAA';

--Interest-only class A-3X at 'AAA';

--Classes A-1A, A-1AX, A-1B, A-1BX, and A-2 have been paid in full.

The upgrades are warranted based upon the recent resolution of the Canton Centre loan and Fitch's subsequent analysis of the performance of the sole remaining loan in the transaction, the Oly Realty One loan.

The Canton Centre loan was sold in October 2004 at a final purchase price of $4.1 million. Net proceeds to the trust after closing costs and operating expenses totaled $3.6 million. After repaying approximately $2.0 million in previously unreimbursed interest and other advances attributed to the Canton Centre loan, $1.6 million in principal was applied to the class A-1A. The trust experienced a loss of $15.2 million to class B-2.

The Oly Realty One loan has a current outstanding balance of $52.0 million. The loan is fully amortizing over a 19-year schedule and has paid down 21.7% since issuance. Currently, 18 properties remain in the portfolio, 17 Fairfield Inn hotels, and one Park Inn. Five properties, representing approximately 17% of the current balance, have been previously defeased. The properties are located throughout the northeastern portion of the U.S.

As of year-end (YE) 2003, the Fitch-adjusted net cash flow (NCF) is relatively flat to issuance. The debt service coverage ratio (DSCR), based upon Fitch's adjusted NCF, an 11.33% constant, and the current loan balance is 1.65 times (x), compared with 1.31x at issuance. The improved DSCR is due to the 21.7% paydown on the loan since issuance.