Fitch Ratings Upgrades One Tranche of JER CDO 2002-1 Trust.

NEW YORK -- Fitch Ratings upgrades one tranche of JER CDO 2002-1 Trust as follows:

-- $29,069,231 fixed rate notes upgraded to 'AAA' from 'BBB-'.

JER CDO 2002-1 Trust (JER CDO), a static cash flow collateralized debt obligation (CDO), is supported by a portfolio of approximately 18.4% real estate investment trust (REIT) securities and 81.6% commercial mortgage-backed securities (CMBS) selected by J.E. Roberts Company, Inc., the collateral administrator, prior to its September 26, 2002 closing date.

The rating action is a result of considerable principal payments to the fixed rate noteholders and a significant increase to fixed rate note overcollateralization. As of the August 10, 2004 trustee report, 73% of the original fixed rate note principal has been paid to the noteholders. Additionally, the fixed rate noteholders have a first priority interest in approximately $123 million of remaining collateral, resulting in an effective overcollateralization ratio in excess of 400%. The rating on the fixed rate notes addresses the likelihood that investors will receive ultimate interest, as well as their original principal balance by the legal final maturity date. Fitch notes that the fixed rate notes are currently receiving their full coupon and are expected to receive all future coupons on a timely basis.

Although the portfolio has experienced negative credit migration and currently includes assets that may ultimately realize losses, Fitch has determined that the remaining credit enhancement available to the fixed rate notes is sufficient to warrant a rating upgrade.

Fitch will continue to monitor and review this transaction for future rating adjustments as needed. Additional deal information and historical data are available on the Fitch Ratings web site at 'www.fitchratings.com'.