Three classes of notes issued by Independence I CDO Ltd., a collateralized debt obligation partly composed of residential and commercial mortgage-backed securities, have been downgraded by Fitch Ratings.The downgrades were as follows: class A, from AA to A; class B, from BB to B; and class C, from CC to C. Fitch attributed the downgrades to deteriorating collateral. Assets rated BBB-minus or lower represented approximately 26.8% of the portfolio as of the latest trustee report, Fitch said, adding that "mezzanine and subordinate tranches from underperforming manufactured housing securitizations have taken principal writedowns and, in Fitch's opinion, over 6.5% in collateral that was considered performing from the previous review is now considered distressed." The CDO consists of approximately 44% asset-backed securities, 30.9% CMBS, 16.1% RMBS, and 9% CDOs, the rating agency said.

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