Fitch Dwngrs 10 Classes of Bank of America Commercial Mortgage Securities 2004-1; Assigns Outlooks

Fitch Ratings downgrades and assigns Outlooks to Bank of America Commercial Mortgage Securities, series 2004-1. A detailed list of rating actions follows at the end of this press release.

The downgrades and Negative Outlook assignments are due to expected losses on two of the three loans currently in special servicing, as well as an increased concentration of Fitch Loans of Concern. The Rating Outlooks reflect the likely direction of any rating changes over the next one to two years. As of the July 2009 distribution date, the pool has been reduced 20.4% to $1.05 billion from $1.32 billion at issuance. Nine loans, 7.4% of the pool, have defeased.

There are currently three loans (2.9%) in special servicing with losses expected on the two largest loans. The largest loan in special servicing (1.3%), is collateralized by 181,596 square foot (sf) office building in Glendale, AZ. The property is fully vacant after losing the single tenant. The property has been real estate owned (REO) as of June 12, 2009 and the special servicer is working to increase the occupancy before marketing the property.

The second largest specially serviced asset (1.0%) is collateralized by a 76,573 sf office building located in Concord, CA. The asset transferred to the special servicer June 17, 2009 due to imminent default. The third specially serviced loan (0.4%) is secured by a manufactured housing community located in Columbus, IN. The loan was unable to refinance at its scheduled maturity and is in the process of being modified by the special servicer.

Exclusive of the three specially serviced loans, an additional 10 loans (5.5%) have been identified as Fitch Loans of Concern. The largest non-specially serviced loan of concern (1.3%) is secured by a retail property in Tracy, CA. The most recent servicer reported debt service coverage ratio (DSCR) is 0.90 times (x), with occupancy at 68%. The property lost a major tenant due to bankruptcy and the borrower is currently negotiating a lease for that vacant space.

Fitch maintains investment grade shadow ratings on two loans in the trust: the Leo Burnett Building (11.4%) and the Hines Sumitomo Life Office Portfolio (9.9%) loans.

The Leo Burnett Building is a 1.1 million sf class A office building located in Chicago, IL. Occupancy as of year-end 2008 was 99.9% compared to 98.2% at issuance.

The Hines Sumitomo Life Office Portfolio is secured by three central business district office buildings containing a total of 1.2 million sf. Two of the office buildings are located in New York, NY, and one is located in Washington, DC. The whole loan consists of two senior pari-passu notes and one junior note. Only the A2 pari-passu note is held in the trust. The A2 note reflects a loan per square foot of $88 with a total A note debt per foot of $223, and total loan debt of $266. As of March 31, 2009, the overall occupancy dropped to 75.1% compared to 97.7% at issuance as a result of the loss of a tenant at one of the New York properties and a major renovation at the Washington, DC property. Renovations at the Washington property included the addition of three floors (approximately 80,000 sf), a green roof, rooftop terrace and a fitness center. The renovations were completed in the second quarter of 2009 and the property is currently leasing up. The DSCR as of Dec. 31, 2008 is 2.52x on the total debt stack down from 2.66x at issuance.

The deal has minimal near term maturities with 2.1% of the loans maturing in 2009 through 2011.

Fitch Ratings downgrades and assigns Outlooks to Bank of America Commercial Mortgage Securities, series 2004-1 as follows:

--$29.9 million class E to 'AA-' from 'AA'; Outlook Stable;

--$18.3 million class F to 'A- from 'A+'; Outlook Stable;

--$11.6 million class G at 'BBB+' from A-'; Outlook Stable

--$19.9 million class H to 'BBB-'from 'BBB'; Outlook Negative;

--$6.6 million class J to 'BB+' from 'BBB-'; Outlook Negative;

--$6.6 million class K to 'BB' from 'BB+'; Outlook Negative;

--$8.3 million class L to 'B' from 'BB'; Outlook Negative.

In addition, Fitch downgrades and assigns recovery ratings to the following classes:

--$8.3 million class M to 'CCC/RR1' from 'BB-';

--$3.3 million class N to 'CCC/RR1' from 'B+';

--$3.3 million class O to 'CC/RR2' from 'B'.

Also, Fitch affirms the following classes:

--$233.6 million class A-1A at 'AAA'; Outlook Stable;

--$11.9 million class A-2 at 'AAA'; Outlook Stable;

--100.1 million class A-3 at 'AAA'; Outlook Stable;

--521.9 million class A-4 at 'AAA'; Outlook Stable;

--Interest-only class X-C at 'AAA'; Outlook Stable;

--Interest-only class X-P at 'AAA'; Outlook Stable;

--$31.5 million class B at 'AAA'; Outlook Stable;

--$13.3 million class C at 'AAA'; Outlook Stable;

--$13.3 million class D at 'AA+'; Outlook Stable.

Fitch does not rate the $14.9 million class P. Class A-1 has been paid in full.

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.