Fitch Affirms 'AAA/V1+' Ratings of Morgan Stanley Institutional Liquidity Prime Portfolio

Fitch Ratings affirms the 'AAA/V1+' ratings assigned to Morgan Stanley Institutional Liquidity Funds: Prime Portfolio, a money market fund managed by Morgan Stanley Investment Management, Inc. (MSIM). The affirmation is a result of Fitch's annual review of the fund and is based on the high credit quality of the funds' assets and the capabilities of MSIM as investment advisor. As of Oct. 31, 2008, the portfolio had approximately $12.2 billion in total assets under management.

The Morgan Stanley Institutional Liquidity Funds: Prime Portfolio seeks the maximum level of current income with the preservation of capital and maintenance of daily liquidity. As of Oct. 31, 2008, 52.8% of total assets were invested in asset-backed commercial paper, 36.3% were in overnight repurchase agreements, 9.6% were in bank certificates of deposit and 2.3% were in corporate bonds. As of Oct. 31, 2008, the fund's weighted-average maturity was 23 days.

As of Oct. 31, 2008, 36.3% of the portfolio was in overnight repurchase agreements with counterparties rated at least 'A/F1' by Fitch or of a comparable credit quality by other global rating agencies. In addition, and as of the same date, 51.2% of the portfolio was in asset-backed commercial paper qualifying for liquidity support provided by the Federal Reserve's Asset-Backed Commercial Paper Mutual Fund Liquidity Facility. The investment advisor has established high levels of liquidity from these two sources in an effort to address heightened redemption risk facing the money market fund sector. Fitch views these actions by the investment advisor positively.

MSIM is a wholly-owned subsidiary of Morgan Stanley (rated 'A/F1' by Fitch). As of Sept. 30, 2008, MSIM together with its affiliated asset management companies, had approximately $476.3 billion in assets under management. The firm manages assets on behalf of institutions and individuals worldwide through a variety of equity, fixed income, cash management and alternative investment products. In the fund's semi-annual report as of April 30, 2008, it was disclosed that MSIM has voluntarily agreed to reduce its advisory fee and/or absorb other expenses, so that the total annual expense of each share in the fund does not exceed 15 basis points. Although this may be discontinued at any time in the future at MSIM's discretion, it serves to improve investors' yield in the interim. Fitch views MSIM's investment advisory capabilities, resource commitment, operational controls, corporate governance, and compliance procedures as consistent with the rating assigned to the fund.

Fitch will publish the fund's credit profile on its web site www.fitchratings.com in the near future.

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.