(The following statement was released by the rating agency)LONDON, April 17 (Fitch) Fitch Ratings has taken rating action on Premiertel plc's CMBS notes as follows: GBP73,348,325 Class A (XS0180245515) due May 2029: affirmed at 'AAsf'; Outlook StableGBP203,618,373 Class B (XS0180245945) due May 2032: downgraded to 'BBsf' from 'BBBsf'; Outlook StableKEY RATING DRIVERSThe affirmation of the class A notes, which are not credit-linked, reflects Fitch's view on the quality of the underlying collateral and class A leverage (based on the portfolio's stressed vacant possession value). The downgrade of the class B notes, which have now been de-linked from the rating of British Telecommunications plc (BT; 'BBB'/Stable/'F2') on account of sustained cost increases, reflects the risk that the notes are not repaid in full from contracted income at legal final maturity in 2032. The increase in costs has recently been compounded by a rise in liquidity facility costs triggered by a stand-by drawing. There is no assurance that this will be reversed.Since closing, all interest due to the class A and B notes, as well as principal to the class A notes, has been paid as scheduled. Since February 2010, senior ranking costs have caused deferrals in scheduled principal payments to the class B notes (GBP0.367m at the February interest payment date (IPD)). Since Fitch's previous rating action in May 2013, senior costs have risen further due to the non-compliance of the liquidity facility provider (Royal Bank of Scotland) with documented rating requirements. The resultant stand-by drawing fee contributed to some GBP0.114m of scheduled principal deferring on the class B notes in February.The increase in costs raises the spectre of the class B notes failing to be repaid in full out of contracted lease income by May 2032. However, the borrower will still own long leasehold and freehold interests in the residual value of the real estate portfolio, which ought to provide sufficient collateral to refinance the outstanding balance. Nevertheless, the probability of default of the class B notes is no longer determined by the creditworthiness of BT, and noteholders may be reliant on the sponsor refinancing its assets to avoid bond default. Estimating the borrower's equity value in 2032 is speculative given the lack of visibility on prevailing local market conditions and on future property quality, and so Fitch no longer considers the notes as investment grade.RATING SENSITIVITIESIf local property market conditions deteriorate, the notes may be downgraded according to their respective reliance on portfolio vacant possession value. Fitch will continue to monitor the performance of the transaction.Contact:Lead Surveillance AnalystEmmanuel BaahDirector+44 20 3530 1025Fitch Ratings Limited30 North ColonnadeLondon E14 5GNSecondary Surveillance AnalystMario SchmidtAssociate Director+44 20 3530 1042Committee ChairpersonEuan GatfieldManaging Director+44 20 3530 1157Media Relations: Athos Larkou, London, Tel: +44 203 530 1549, Email: athos.larkou@fitchratings.com.Additional information is available at 
  www.fitchratings.com.
 The sources of information used to assess these ratings were the issuer, servicer, and periodic cash manager and servicer reports.Applicable criteria, 'EMEA CMBS Rating Criteria', dated 3 April 2013, 'Global Structured Finance Rating Criteria', dated 24 May 2013, are available at 
  www.fitchratings.com.
 Applicable Criteria and Related Research: Global Structured Finance Rating Criteria
  http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661
  EMEA CMBS Rating Criteria 
  http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=704358
 Additional Disclosure Solicitation Status 
  http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=827210
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