Class B of notes issued by Bristol CDO I Ltd. have been downgraded from B/DR2 to CCC/DR2 by Fitch Ratings and removed from Rating Watch Negative.In addition, the ratings on classes A-1 and A-2 in the deal were affirmed. The collateralized debt obligation is secured by a static pool of asset-backed securities, of which 18.4% are manufactured housing residential mortgage-backed securities and 17.1% are subprime RMBS issued in 2002 and 2001, Fitch said. The rating agency attributed the downgrade to a deterioration in collateral, reporting that the overcollateralization ratio of class C remains below its minimum threshold of 104.5%, despite an improvement in the deal's collateral quality tests. "The class B notes will not receive any principal proceeds until the class A-1 and A-2 notes have been paid in full," Fitch said.

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