The class A notes issued by HarbourView CDO III Ltd., a collateralized debt obligation that includes mortgage-backed securities, has been downgraded from B to A-minus by Fitch Ratings.Fitch also lowered the Distressed Recovery rating on the class B notes from DR5 to DR6, and assigned a DR2 rating to the class A notes. The rating agency said the deal has been in default since March 2005, when the principal balance of the collateral debt securities fell below the aggregate balance of the rated notes. HarbourView III has exited its reinvestment period with a portfolio consisting chiefly of "diversified structured finance assets" as well as corporate debt and the debt of real estate investment trusts, the rating agency said. Fitch can be found online at http://www.fitchratings.com.

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