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Rating Action:

Moody's downgrades the Class A Notes issued by Radamantis (European Loan Conduit No. 24) plc

17 Jul 2009

GBP 315 million of CMBS affected

London, 17 July 2009 -- Moody's Investors Service has today downgraded the Class A Notes issued by Radamantis (European Loan Conduit No. 24) plc (amount reflects initial outstandings):

- GBP 315,000,000 Class A Commercial Mortgage Backed Floating Rate Notes due 2015 downgraded to Aa1, previously on 23 August 2006 assigned Aaa.

At the same time, Moody's Investors Service has affirmed the Aaa rating of the Class X Certificates issued by Radamantis (European Loan Conduit No. 24) plc. Moody's does not rate the Class B, Class C, Class D, Class E, Class F and Class G Notes issued by Radamantis (European Loan Conduit No. 24) plc.

Today's rating action concludes the review for possible downgrade that was initiated for the Class A Notes on 08 April 2009. Today's rating action takes Moody's updated central scenarios into account, as described in Moody's Special Report "Moody's Updates on Its Surveillance Approach for EMEA CMBS".

1) Transaction and Portfolio Overview

Radamantis (European Loan Conduit No. 24) plc closed in August 2006 and represents the securitisation of initially four mortgage loans originated by Morgan Stanley Bank International Limited and secured by first-ranking legal mortgages over four commercial properties located in the Greater London area. The properties were predominantly office use (99%) and the remainder retail use (1%).

Since closing, there have been no changes in the portfolio composition and no repayments. The loans are not equally contributing to the portfolio: the biggest loan (the Milton & Shire Houses Loan) represents 54.0% of the current portfolio balance, while the smallest loan (the Hayes Business Park Loan) represents 11.5%. The current loan Herfindahl index is 2.7, unchanged to closing. As of the last interest payment date, all of the four loans in the portfolio were current.

2) Rating Rationale

The downgrades of the Class A Notes follow a detailed re-assessment of the loan and property portfolio's credit risk. Hereby, Moody's main focus was on property value declines, term default risk, refinancing risk and the anticipated work-out timing for potentially defaulting loans. Given the concentrated nature of the portfolio, Moody's re-assessed all loans in the portfolio.

As outlined in more detail below, today's rating action is mainly driven by the most recent performance of the UK commercial property markets and Moody's opinion about future property value performance. Driven by, in most cases, a higher default risk assessment at the loan maturity dates, Moody's now anticipates that a very large portion of the portfolio will default over the course of the transaction term. Coupled with the negative impact of significantly reduced property values, Moody's expects a substantial amount of losses on the securitised portfolio. Those losses will, given the backloaded default risk profile and the anticipated work-out strategy for defaulted loans, crystallise only towards the end of the transaction term.

The current subordination levels for Moody's rated classes, 36.2% for the Class A Notes, provide protection against those expected losses. However, the likelihood of higher than expected losses on the portfolio has increased as well, which results in today's rating action.

As since closing the portfolio did not experience any repayments nor prepayments, the Class A Notes do not benefit from a meaningful increase in subordination levels since closing.

3) Moody's Portfolio Analysis

Property Values. Property values across the UK have declined significantly and are expected to continue to decline at least until 2010. Moody's estimates that compared to the underwriter's ("U/W") values at closing, the values of the properties securing this transaction have declined by on aggregate 21% until Q1 2009 (ranging from a 19% value decline for the Westferry Circus Loan to a 22% decline for the Milton & Shire Houses Loan). Looking ahead, Moody's anticipates further declines until 2010, resulting in a 24% value decline compared to the U/W value at closing (ranging from a 22% value decline for the South Quay Plaza Loan to a 25% decline for the Milton & Shire Houses Loan).

Based on this property value assessment, Moody's estimates that the Q1 2009 weighted average ("WA") securitised loan-to-value ("LTV") ratio was 88% compared to the reported U/W LTV of 69.8%. Due to the further envisaged declines, the WA LTV will increase in Moody's opinion to 92% in 2010 and will only gradually recover thereafter. Based on Moody's anticipated trough values, the LTVs for the securitised loans range between 100% (Milton & Shire Houses Loan) and 75% (South Quay Plaza Loan). As three loans (all but the South Quay Plaza Loan) have additional debt in the form of B-loans (amounting to GBP87 million on aggregate), based on estimated trough values, the overall whole loan leverage will be on average 129%.

Moody's has taken the anticipated property value development, including a gradual recovery from 2011 onwards, into account when analysing the default risk at loan maturity and the loss given default for each securitised loan.

Refinancing Risk. The transaction is not exposed to loans maturing in the short-term (2009 and 2010). Taking into account extension options, 65% of the current portfolio matures in 2011 and 35% in 2012. However, as Moody's expects property values in the UK to only slowly recover from 2011 onwards, all loans will be still highly leveraged at their respective maturity dates, especially when taking into account the B-loans for three of the loans. Consequently, in Moody's view, for all of the loans, the default risk at maturity has increased substantially compared to the closing analysis.

Term Default Risk. The occupational markets in the UK are currently characterised by falling rents, increasing vacancy rates and higher than average tenant default rates. Taking into account the lease profile of the respective loans, the South Quay Plaza Loan could be in Moody's view especially exposed to weakening occupational markets. The balance of the portfolio benefits from long-dated leases to relatively creditworthy tenants. Based on the current lease profile, Moody's has incorporated into its analysis an allowance for deterioration in coverage ratios on some of the loans, in turn increasing the term default risk assumption for the respective loans.

Overall Default Risk. Based on its revised term and maturity default risk assessment for the securitised loans, Moody's anticipates that a very large portion of the portfolio will default over the course of the transaction term. With the exception of the South Quay Plaza Loan, the default risk of all loans is predominantly driven by refinancing risk. In Moody's view, the Milton & Shire Houses Loan has currently the highest default risk, while the South Quay Plaza Loan (15% of the current pool) has the lowest risk of defaulting.

Concentration Risk. The portfolio securitised in Radamantis (European Loan Conduit No. 24) plc exhibits an above average concentration in terms of property types (99% office) and property location (100% UK and 100% Greater London). In Moody's view, this significantly limits the potential benefits from different markets performing differently over time.

Work-Out Strategy. In scenarios where a loan defaults, Moody's current expectation is that the servicer will most likely not pursue an immediate sale of the property in today's depressed market conditions. Therefore, Moody's has assumed that in most cases, upon default, a sale of the mortgaged properties and ultimate work-out of the loan will occur at a later point in time.

Increased Portfolio Loss Exposure. Taking into account the increased default risk of the loans, the most recent performance of the UK commercial property markets, Moody's opinion about future property value performance and the most likely work-out strategies for defaulted loans, Moody's anticipates a substantial amount of losses on the securitised portfolio, which will, given the backloaded default risk profile and the anticipated work-out strategy for defaulted loans, crystallise only towards the end of the transaction term.

4) Rating Methodology

The principal methodologies used in rating and monitoring the transaction are "Update on Moody's Real Estate Analysis for CMBS Transaction in EMEA" June 2005 and "Moody's Updates on its Surveillance Approach for EMEA CMBS" March 2009, which can be found at www.moodys.com in the Credit Policy & Methodologies directory, in the Ratings Methodologies subdirectory. Other methodologies and factors that may have been considered in the process of rating this issue can also be found in the Credit Policy & Methodologies directory. The last Performance Overview for this transaction was published on 22 May 2009.

For updated monitoring information, please contact monitor.cmbs@moodys.com." To obtain a copy of Moody's Pre-Sale Report on this transaction, please visit Moody's website at www.moodys.com or contact our Client Service Desk in London (+44-20-7772 5454).

London
Christian Aufsatz
Senior Vice President
Structured Finance Group
Moody's Investors Service Ltd.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

London
Jeroen Heijdeman
Analyst
Structured Finance Group
Moody's Investors Service Ltd.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Moody's downgrades the Class A Notes issued by Radamantis (European Loan Conduit No. 24) plc
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