Three classes of notes from Triaxx Funding High Grade I Ltd., which invests in residential mortgage-backed securities, have been downgraded by Fitch Ratings.The downgrades were as follows: class B-2 mezzanine floating-rate notes, from AAA to AA; class C, mezzanine floating-rate deferrable-interest notes, from A to BB; and class D, mezzanine floating-rate deferrable-interest notes, from BBB to B. Class B-2 was placed on Rating Watch Negative, and the other two classes remain there. Classes C and D were downgraded due to a reduction in credit enhancement caused by losses and a drop in the market value of the underlying assets, Fitch said, while the class B-2 notes have low risk, but a continued decline in prices "has increased the vulnerability of these notes if the transaction is forced to liquidate." Triaxx invests in triple-A rated RMBS assets using proceeds raised by issuing notes and equity and using repo funding, Fitch said.

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