Fitch Eyes HarbourView CDO Classes

Three classes of notes issued by HarbourView CDO III Ltd., a collateralized debt obligation that includes mortgage-backed securities, have been placed on Rating Watch Negative by Fitch Ratings.The affected securities are classes A, B, and C. The rating agency said the deal has triggered an event of default, in response to which a majority of the controlling class of noteholders may accelerate the maturity of the transaction, a majority of all the noteholders may choose to liquidate the portfolio, or some other remedy may be chosen. Fitch said HarbourView III is composed of 34.2% residential MBS, 27.9% asset-backed securities, 15.3% commercial MBS, 8% real estate investment trusts, 7.3% CDOs, and 7.3% corporate debt. The rating agency can be found online at http://www.fitchratings.com.