Seven classes of notes issued by Dutch Hill Funding II Ltd., a cash-flow mezzanine structured finance collateralized debt obligation based partly on subprime residential mortgage-backed securities, have been placed on Rating Watch Negative by Fitch Ratings.The affected securities were the class A2, B, C, D-1, D-2, and D-3 notes and the class C loan. The negative rating actions resulted from collateral deterioration, as 30.8% of the long portfolio has been downgraded or placed under review for possible downgrade by at least one rating agency, Fitch reported. The CDO is based on a cash and synthetic portfolio and short contracts on $253.9 million of RMBS.

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