Three classes of notes issued by Northlake CDO I, a collateralized debt obligation that includes mortgage-backed securities, have been downgraded by Fitch Ratings.The downgrades were as follows: class II floating-rate notes, from AA to A; class III floating-rate notes, from BBB to BB; and preference shares, from BB to C. The preference shares were also assigned a Distressed Recovery rating of DR6, and the ratings on two other classes in the deal were affirmed. Fitch attributed the downgrades to "an increase in the par value of the assets for which Fitch does not expect a full par recovery." The transaction, a CDO managed by Deerfield Capital Management, is composed of residential and commercial MBS, asset-backed securities, and CDOs. The rating agency can be found online at http://www.fitchratings.com.

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