Fitch Downgrades 2 Classes of Morgan Stanley Capital I Trust, Series 2006-IQ12

Fitch downgrades the following classes of Morgan Stanley Capital I commercial mortgage pass-through certificates series 2006-IQ12 as follows:

--$6.8 million class M to 'BB-' from 'BB';

--$13.7 million class N to 'B' from 'BB-'.

Fitch also affirms the following classes:

--$45.3 million class A-1 at 'AAA';

--$518.1 million class A-1A at 'AAA';

--$70.2 million class A-2 at 'AAA';

--$225 million class A-NM at 'AAA';

--$44.5 million class A-3 at 'AAA';

--$88.2 million class A-AB at 'AAA';

--$897.6 million class A-4 at 'AAA';

--$173 million class A-M at 'AAA';

--$100 million class A-MFL at 'AAA';

--$242.3 million class A-J at 'AAA';

--$1.35 billion interest only class X-1 at 'AAA';

--$1.28 billion interest only class X-2 at 'AAA';

--$1.35 billion interest only class X-W at 'AAA';

--$17.1 million class B at 'AA+';

--$44.4 million class C at 'AA';

--$27.3 million class D at 'AA-';

--$13.7 million class E at 'A+';

--$23.9 million class F at 'A';

--$23.9 million class G at 'A-';

--$27.3 million class H at 'BBB+';

--$27.3 million class J at 'BBB';

--$34.1 million class K at 'BBB-';

--$3.4 million class L at 'BB+'.

Classes O, P, Q and S are not rated by Fitch.

The downgrades are due to loss expectations on three specially serviced loans (1.8%).

The specially serviced loans consist of two loans (1.3%) to the same borrower on two multifamily properties located in Memphis, TN. The third specially serviced loan (0.5%) is secured by a multifamily property in Chicago, IL. The loans in Memphis were transferred to the special servicer due to monetary default. A receiver is in place and is working to lease vacant space and stabilize the properties. Fitch will continue to monitor updated loss expectations.

Fitch Loans of Concern total 4.1% and include the three specially serviced loans.

As of the April 2008 distribution report, the transaction has paid down 0.8% to $2.71 billion from $2.73 billion at issuance.

Three loans maintain investment grade shadow ratings: Natick Mall (8.3%), 75 Park Place (3.1%) and Scott Foresman (1.2%). The Natick Mall, also know as the Natick Collection, is a 1.7 million square foot (sf) regional mall located 16 miles west of Boston, MA in the city of Natick, MA. Anchors are Macy's, Nordstrom's, Sear's, Lord & Taylor, Neiman Marcus and JC Penney. Major tenants include Gap/ Gap Kids, Crate & Barrell and Talbots. In-line occupancy as of 12/31/2007 has increased to 96.6% from 92.2% at issuance.

The second largest shadow rated loan, 75 Park Place (3.1%), is a 574,306 sf office building located in the Financial District of Manhattan in New York City. Occupancy as of 12/31/2007 was 96.9%, stable since issuance.

The Scott Foresman Building (1.2%) is a 264,400 sf office building located in the city of Glenview, IL. The property is 100% occupied by a single tenant, Pearson PLC, on a triple-net lease until June 2020.

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.

Contacts:

Fitch Ratings, Chicago
Mitchell Brumwell, +1-312-368-3268
Britt Johnson, +1-312-606-2341
Media Relations, New York
Sandro Scenga, +1-212-908-0278