Terwin RMBS Classes Downgraded

Two classes of Terwin RMBS Trust securities have been downgraded by Fitch Ratings.Class B-5 of series 2005-5SL has been downgraded from BB to CCC and removed from Rating Watch Negative, and class B-7PI of series 2005-7SL has been downgraded from BB to B. In addition, the downgraded B-5 class has been assigned a Distressed Recovery rating of DR2, and class B-6 of series 2005-7SL has been placed on Rating Watch Negative. Fitch also affirmed the ratings on 18 other classes in the two transactions. The negative rating actions were based on declines in overcollateralization stemming from losses and "a reduction in the dollar amount of excess spread due to much faster-than-expected prepayments and rising interest rates," Fitch said. The collateral for the transaction is fixed-rate subprime loans secured by second-lien mortgages on residential properties.