Fitch Ratings Upgrades Salomon VII Series 2002-CDC.

NEW YORK -- Fitch Ratings upgrades Salomon Brothers Mortgage Securities VII, Inc. CDC Securitization Corp., Series 2002-CDC commercial pass-through certificates, as follows:

-- $20.6 million class D to 'AAA' from 'AA+';

-- $14.6 million class E to 'AAA' from 'AA-';

-- $11.8 million class F to 'AAA' from 'A'

In addition Fitch affirms the following classes:

-- $20.4 million IO class X-2A 'AAA';

-- $4.4 million IO class X-2B 'BBB-';

-- $20.4 million IO class X-3CDC 'AAA';

-- $2.8 million class H-CHM 'BBB+';

-- $750,000 class J-CHM 'BBB';

-- $917,000 class K-CHM 'BBB-'.

The upgrades are due primarily to the increased credit enhancement of the classes as a result of the repayment of the Denholtz Portfolio loan. As of the December 2004 distribution date, two of the original loans remain in the pool, and the outstanding principal balance has been reduced by approximately 89.6% to $69.8 million compared to $671.8 at issuance.

San Francisco Furniture Mart (64.4%) consists of two furniture showroom/office properties containing approximately 735,000 square feet (sf) of showroom space, 243,000 sf of office space, and 29,000 sf of retail space. Based on Fitch's analysis of the audited year end (YE) 2003, Fitch's net cash flow (NCF) was approximately $10.2 million. The resulting Fitch stressed debt service coverage ratio (DSCR) on the securitized loan balance, based on a refinance constant of 10.09% and the current trust balance is 2.24 times (x) compared to 1.74x at issuance. The all-in DSCR increased to 1.15x compared to 0.90x at issuance. Operating results through September 2004 have continued to improve over YE 2003 on an annualized basis, due to increased rental rates, coupled with reduced expenses. Cutbacks in payroll and benefits, and lower advertising and marketing expense contributed significantly to decreasing operating expenses. Occupancy has remained stable at 90% as of Sept. 30, 2004, compared to 90% at issuance.

The Chico Mall (35.6%) is a 528,647 sf regional mall, located in Chico, California. The YE 2003 Fitch adjusted NCF decreased approximately 13.8%, compared to issuance. Income at the mall decreased as a result of the departure of anchor tenant Troutman's (50,948 sf or 9.6% of net rentable area) which filed for bankruptcy and vacated the mall in May 2003. General Growth Properties (GGP), the publicly-traded REIT, assumed the loan in December 2003 and has been actively marketing space at the mall. In-line occupancy increased to 96.4% as of September 2004, compared to 96% at issuance, and 92% as of June 2004. GGP is aggressively marketing the former Troutman's space, and Fitch will continue to monitor the leasing activities of the anchor space. Performance of the loan has decreased, with 1.29x DSCR for the trust (which includes the rakes) as of YE 2003, compared to 1.49x at issuance. The whole loan DSCR decreased to 1.04x from 1.21x at issuance. As a result of increased in-line occupancy, operating results through September 2004 improved slightly from YE 2003 on an annualized basis.

Fitch does not rate the following classes:

-- G;

-- H-SSB;

-- H-DEN;

-- H-BAR;

-- H-SWA;

-- J-SSB;

-- J-DEN;

-- J-BAR;

-- J-SWA;

-- K-SSB;

-- L-CSM;

-- L-DAL;

-- L-TFB.

The following classes have been paid in full:

-- A-1;

-- A-2;

-- B;

-- C;

-- X-3SSB-TFB;

-- X-3SSB-DAL;

-- X-3SSB-CSM;

-- X-3SSB-EBS;

-- X-3SSB-VOP;

-- H-BWM;

-- K-EBS;

-- H-CHE;

-- J-CHE;

-- K-CHE;

-- H-SWA;

-- J-SWA;

-- K-SWA;

-- H-DEN;

-- J-DEN;

-- K-DEN.