2008-08-28 23:17:02 -

- Fitch Ratings has downgraded and removed from Rating Watch Negative seven classes of notes issued by Whately CDO I, Ltd (Whately). The following rating actions are effective immediately:

--$160,500,625 class A-1A downgraded to 'A-' from 'AA-';

--$6,000,000 class A-1BF downgraded to 'B-' from 'BBB-';

--$63,000,000 class A-1BV downgraded to 'B-' from 'BBB-';

--$27,000,000 class A-2 downgraded to 'CCC' from 'BB+';

--$12,588,892 class A-3 downgraded to 'C' from 'B+';

--$4,248,672 class BF downgraded to 'C' from 'CC';

--$10,608,624 class BV downgraded to 'C' from 'CC'.

Fitch's rating actions reflect the collateral deterioration within the portfolio, specifically from subprime residential mortgage backed securities (RMBS).

Whately

is a cashflow collateralized debt obligation (CDO) which closed June 9, 2004, and is managed by Babson Capital Management LLC. The reinvestment period ended in June 2007. The portfolio is composed of primarily of subprime RMBS (38.4%), Alternative-A (Alt-A) RMBS (20.4%), and Prime RMBS (20.7%). Subprime RMBS of the pre-2005, 2005, 2006, and 2007 vintages account for approximately 13.1%, 4.8%, 17.5%, and 3.0% of the portfolio, respectively. Alt-A RMBS of the pre-2005, 2005, 2006 and 2007 vintages account for approximately 11.9%, 2.9%, 2.6%, and 2.9% of the portfolio, respectively.

Since the last review conducted in November 2007, approximately 34.6% of the portfolio has been downgraded. The portion of the portfolio rated below investment grade is now 34.1% while 9.2% of the portfolio is currently on Rating Watch Negative.

The collateral deterioration has caused each of the class A and B OC tests to fail their respective triggers. The failures of these tests are diverting interest proceeds that would otherwise be payable to the class A-3, BF and BV notes, to pay down the class A-1A notes. Consistent with the current ratings, Fitch expects the class A-3, BF and BV notes to receive only capitalized interest payments in the future with no ultimate principal recovery.

The expected ratings on the class A-1 and A-2 notes address the timely receipt of scheduled interest payments and the ultimate receipt of principal per the deal's governing documents. The ratings on the class A-3 and B notes address the ultimate receipt of interest payments and the ultimate receipt of principal per the deal's governing documents.

Fitch is reviewing its SF CDO approach and will comment separately on any changes and potential rating impact at a later date. Fitch will continue to monitor and review this transaction for future rating adjustments. Additional transaction information and historical data are available on the Fitch Ratings web site at www.fitchratings.com.

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
Kevin Kendra, +1-212-908-0760 (New York)
Brian Vorderbrueggen, +1-212-908-9102 (New York)
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