Fitch Ratings has affirmed one class and downgraded four classes of notes issued by NovaStar ABS CDO I, Ltd and NovaStar ABS CDO I, Inc co-issuer.$243,700,000 class A-1 notes are affirmed at 'AAA'; $34,900,000 class A-2 notes are downgraded to 'AA' from 'AAA' and place on Rating Watch Negative; $28,500,000 class B notes are downgraded to 'A+' from 'AA' and placed on Rating Watch Negative; $24,400,000 class C notes are downgraded to 'BBB' from 'A' and placed on Rating Watch Negative; and $15,700,000 class D notes are downgraded to 'BB' from 'BBB' and remain on Negative Rating Watch. The class A-2, B and C notes have been placed on Rating Watch Negative and the class D notes remain on Rating Watch Negative due to exposure to 2005, 2006 and 2007 RMBS subprime collateral, currently experiencing high default and delinquency rates, of which a substantial percentage have not been reviewed by any agency. Fitch expects to resolve the Rating Watch status on these notes as the expected performance of these bonds is more apparent.

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