Moody's Upgrades Ratings Of Four Bond Classes

Moody's Investors Service upgraded the ratings of four classes and affirmed the ratings of three classes of Asset Securitization Corporation, Commercial Mortgage Pass Through Certificates, Series 1996 D3. The changes are as follows Class A 1C, $292,360,714, Fixed, affirmed at

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Moody’s Investors Service upgraded the ratings of four classes and affirmed the ratings of three classes of Asset Securitization Corporation, Commercial Mortgage Pass-Through Certificates, Series 1996-D3.

The changes are as follows Class A-1C, $292,360,714, Fixed, affirmed at Aaa; Class A-1D, $19,564,674, Fixed, affirmed at Aaa; Class A-CS2, Notional, affirmed at Aaa; Class A-2, $39,129,349, WAC, upgraded to Aaa from Aa1; Class A-3, $35,216,414, WAC, upgraded to Aaa from A1; Class A-4, $39,129,349, WAC, upgraded to A1 from Baa2 and Class A-5, $15,651,739, WAC, upgraded to A3 from Baa3.

As of the December 15, 2004 distribution date, the transaction’s aggregate balance has decreased by approximately 33.8% to $518.2 million from $782.6 million at securitization. The Certificates are collateralized by 91 mortgage loans secured by commercial and multifamily properties. The mortgage loans range in size from less than 1.0% to 12.2% of the pool with the top 10 loans representing 51.0% of the pool. Fifteen loans representing 25.7% of the pool have defeased and have been replaced with U.S. Government securities. The defeased loans include five of the pool’s top 10 loans, including Anchorage Shopping Center ($25.6 million – 4.9%); Lee Park ($21.7 million – 4.2%), Atlanta Decorative Arts Center ($19.8 million – 3.8%), Lake Arrowhead Village ($18.6 million – 3.6%), and 1010 Northern Boulevard ($18.3 million – 3.5%). Eight loans have been liquidated from the pool resulting in aggregate realized losses of approximately $17.1 million.

Seven loans, representing 5.7% of the pool, are in special servicing including the Days Inn – Merchandise Mart Loan ($15.2 million – 2.9%), which is the tenth largest loan in the pool. Moody’s has estimated aggregate losses of approximately $7.0 million for all of the specially serviced loans.

Moody’s was provided with year-end 2003 borrower financials for 91.0% of the pool’s performing loans excluding the defeased loans. Moody’s loan to value ratio (“LTV”) is 74.3%, compared to 74.2% at Moody’s last full review in April 2001 and 65.2% at securitization. The upgrade of Classes A-2, A-3, A-4, and A-5 is due to increased subordination levels and the pool’s high percentage of defeased loans. The pool has experienced increased LTV dispersion since securitization. Based on Moody’s analysis, 10.9% of the pool has a LTV greater than 100.0%, compared to 7.7% at last review and 0.0% at securitization.

The top three loans represent 25.0% of the pool. The largest loan is the Hyatt Riverwalk – San Antonio Loan ($63.1 million – 12.2%), which is secured by a 632-room full service hotel located in San Antonio, Texas. Moody’s LTV is 69.6%, compared to 64.4% at last review and 73.0% at securitization.

The second largest loan is the Mariner’s Village loan ($43.2 million – 8.3%), which is secured by a 981-unit multifamily property located in Marina del Rey, California. Moody’s LTV is 63.7%, compared to 56.9% at last review and 74.0% at securitization.

The third largest loan is the Malibu Canyon Office Park Loan ($23.4 million – 4.5%), which is secured by a 320,000 square foot office building located in Calabasas, California. Moody’s LTV is 64.3%, compared to 68.9% at last review and 71.0% at securitization.

The pool collateral is a mix of hotel (29.2%), multifamily (26.3%), U.S. Government securities (25.7%), retail (11.3%), office (5.5%), healthcare (1.5%) and industrial (0.5%). The collateral properties are located in 22 states. The top five state concentrations are California (28.1%), Texas (27.0%), Michigan (5.6%), Georgia (5.3%) and Maryland (4.9%). All of the loans are fixed rate.

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