2008-08-07 23:34:05 -

- Fitch Ratings has placed the following classes of Banc of America Commercial Mortgage Inc., series 2006-3 on Rating Watch Negative:

--$12.3 million 'BB+' class J;

--$7.4 million 'BB' class K;

--$7.4 million 'BB-' class L;

--$2.5 million 'B+' class M.

The classes have been placed on Rating Watch Negative due to the exposure to seven single-tenant retail loans, of which Boscov's Inc. is the borrower and tenant. Boscov's filed Chapter 11 bankruptcy on Aug. 4, 2008 and plans to close these stores. There are eight Boscov's loans in this transaction with total principal balance of $133.1 million (6.8% of the pool), only the seven loans with total exposure of $117.4 million (6%) are affected.

The stores are attached to shopping centers with strong owner operators, four of which are owned by Simon Properties Group, Inc., two General Growth Properties and one CBL & Associates Properties, Inc. The malls are not part of the collateral to the loans. When Boscov's acquired these stores from Federated Department Stores in 2006, the company pledged each individual asset as collateral to finance the purchases.

Given the uncertainty of the loan resolution, Fitch applied a conservative estimate of value. Fitch will evaluate the ratings as additional information becomes available from the borrower and the servicer.

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.

Fitch Ratings, New York
Amy Gan, +1-212-908-9143
Adam Fox, +1-212-908-0869
Sandro Scenga, +1-212-908-0278 (Media Relations)