Solstice CDO Tranches Downgraded

Three tranches of Solstice ABS CDO Ltd. have been downgraded by Fitch Ratings.The downgrades were as follows: class B notes, from AA to AA-minus; class C notes, from A-minus to BBB; and preferred shares, from BB-minus to B. Fitch said the downgrades stemmed from poor performance through impaired and defaulted assets. Assets rated below BBB-minus have increased from about 12% to over 25% of Solstice's outstanding collateral debt securities since February 2003, Fitch said. The proceeds of the collateralized debt obligation were used to buy an investment portfolio consisting chiefly of CDOs, residential mortgage-backed securities, commercial MBS, asset-backed securities, corporate debt securities, and real estate investment trusts. Fitch can be found online at http://www.fitchratings.com.