Fitch Downgrades Subprime-Linked CDOs

Eleven classes of notes issued by two collateralized debt obligations linked to subprime residential mortgage-backed securities have been downgraded by Fitch Ratings. The affected securities are six classes from Duke Funding IX Ltd./Corp., a hybrid cash and synthetic structured finance CDO; and five classes from Porter Square CDO III Ltd./Inc., a cash flow structured finance CDO. The downgrades were attributed to "significant collateral deterioration" in the portfolios' subprime RMBS. In the case of Duke Funding IX, the downgrade was also attributed to alternative-A RMBS, and in the case of Porter Square III, it was also attributed to structured finance CDOs with underlying exposure to subprime RMBS. Fitch can be found online at http://www.fitchratings.com.