2008-07-18 22:42:06 -

- Fitch rates Elva Funding PLC Series No: 2008-5 as follows:

--COP 54,558,000,000 fixed rate notes due 2018 'AA-'.

The Rating Outlook is Negative.

Elva Funding PLC Series No: 2008-5 (the issuer) has issued the above fixed rate, credit linked notes with a principal amount of Columbian Peso (COP) 54,558,000,000. The issuance proceeds were used to purchase U.S. Dollar (USD) 30,000,000 of the USD4,500,000,000 6 5/8% Notes due 1 April 2018, issued by Morgan Stanley (rated 'AA-', Outlook Negative by Fitch) (ISIN: US6174466Q77).The rating assigned by Fitch is based on the credit quality of Morgan Stanley as swap counterparty and as the collateral issuer.

The issuer has entered into a swap with Morgan Stanley Capital Services

Inc. (MSCS, the swap counterparty) that will convert USD-denominated interest and principal payments from the collateral into amounts based on COP54,558,000,000, which are then converted back to USD. Payments from the swap counterparty to the issuer will be converted into USD at the then-prevailing value of the COP/USD exchange rate, as per the transaction's governing documents.

The rating of the notes addresses the likelihood that investors will receive full and timely payments of interest, as per the transaction's governing documents, as well as the ultimate payment of principal by the legal final maturity date. All payments will be made in USD, as stated above.

If a Mandatory Redemption Event occurs, as defined in the governing documents, investors may be exposed to the market value risk of the collateral due to its liquidation prior to maturity, and also foreign exchange risk upon conversion of the USD-based collateral proceeds into COP. Additionally, investors could be exposed to losses in the form of a swap termination payment owed to the swap counterparty upon certain Mandatory Redemption Events. Fitch's assigned rating encapsulates this early redemption risk with regard to the potential default of Morgan Stanley as issuer of the collateral and as guarantor to the swap counterparty. Also, Fitch receives legal opinions addressing the remoteness of certain taxation events leading to an early redemption.

The effective date of the rating is July 16, 2008.

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.

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