Four classes of securities issued by Independence II CDO Ltd., a collateralized debt obligation, have been downgraded by Fitch Ratings.The downgrades were as follows: class A notes, from AA-plus to AA-minus; class B notes, from BBB-plus to BB-minus; class C notes, from BB to CCC; and $16.7 million of preference shares, from CCC to C. Classes B and C were removed from Rating Watch Negative. Independence II is composed of approximately 40.4% residential mortgage-backed securities, 37.1% commercial MBS, 16.7% asset-backed securities, 5.4% CDOs, and 0.5% real estate investment trusts. Fitch attributed the downgrades to a deterioration of collateral quality, citing principal writedowns to various tranches from underperforming manufactured housing deals.

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