Fitch Affirms $243.7MM and Downgrades $103.5MM of NovaStar ABS CDO 1, Ltd.

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.