Fitch Ratings upgrades one class, downgrades one class, and affirms two classes of Merrill Lynch Mortgage Trust (MLMT) 2004-MKB1 commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The upgrade reflects increased credit enhancement from scheduled paydown. The downgrade is due to realized losses. Fitch modeled losses of 5% of the remaining pool; expected losses on the original pool balance total 1.7%, including $16.1 million (1.6% of the original pool balance) in realized losses to date.

As of the January 2016 distribution date, the pool's aggregate principal balance has been reduced by 98.67% to $13 million from $980 million at issuance. Since the last rating action, one specially serviced loan has liquidated with better than expected recoveries. There are five loans remaining, four of which (34.2%) are fully amortizing. Interest shortfalls are currently affecting class Q.

The largest loan in the pool, Georgetown Medical Plaza (46%), is a 71,031 square foot (sf) office building located in Indianapolis, IN. The loan reached its anticipated repayment date (ARD) in March 2014, and is being cash managed and accruing 2% deferred interest. The loan's final maturity date is in 2034. The loan's debt service coverage ratio (DSCR) was 1.39x as of December 2014 and occupancy has been 100% since issuance by a single tenant. The lease expiration is July 2018.

The second largest loan in the pool (20%) is a 20,987 sf office property in Malibu, CA. DSCR was 2.42x as of December 2014 and occupancy was 100% as of September 2015.

RATING SENSITIVITIES

The Rating Outlook on class L is Stable, reflecting Fitch's expectation of future affirmations. The distressed classes (those rated below 'B') may be subject to downgrades in the event loan performance deteriorates, as the transaction is becoming increasingly concentrated.

DUE DILIGENCE USAGE

No third-party due diligence was provided or reviewed in relation to this rating action.

Fitch upgrades the following class as indicated:

--$4.6 million class L to 'BBsf' from 'Bsf'; Outlook Stable.

Fitch downgrades the following class and revises REs as indicated:

--$3.7 million class P to 'Dsf' from 'Csf', RE 100%.

Fitch affirms the following classes and REs as indicated:

--$4.9 million class M at 'CCCsf', RE 100%;

--$2.5 million class N at 'CCsf', RE 100%.

The class A-1, A-2, A-3, A-4, A-1A, B, C, D, E, F, G, H, J and K certificates have paid in full. Fitch does not rate the class Q certificates. Fitch previously withdrew the ratings on the interest-only class XC and XP certificates.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

U.S. and Canadian Fixed-Rate Multiborrower CMBS Surveillance and U.S. Re-REMIC Criteria (pub. 13 Nov 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=873395

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=998129

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=998129

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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