Fitch: Acacia CDO 6, Ltd./Inc.'s Ratings Unaffected By Collateral Manager Change.

NEW YORK -- Fitch Ratings has reviewed the potential impact of MBIA Capital Management Corp.'s (MBIA Capital) proposed assumption of collateral management duties for Acacia CDO 6, Ltd./Inc. (Acacia CDO 6) and determined that the transaction's outstanding ratings would not be affected.

Fitch views MBIA Capital's administrative and operational capabilities as sufficient relative to the transaction's outstanding ratings and the distressed nature of the underlying collateral. Acacia CDO 6 is a diversified structured finance collateralized debt obligation (CDO) originally managed by RWT Holdings, Inc. (RWT), a subsidiary of Redwood Trust, Inc., and issued on Nov. 9, 2004. On June 8, 2009, holders of a majority of the controlling class directed the acceleration of the maturity of the notes as a remedy to the event of default (EOD) that occurred on May 14, 2009 when the class A/B overcollateralization (OC) ratio fell below 100%. As a result of the note acceleration, all interest and principal proceeds remaining after the payment of fees and the interest rate swap payment are being used to pay down the notes, beginning with the senior-most notes outstanding, until paid in full. As a condition of the EOD, active trading for the CDO is prohibited and any firm assuming management duties is effectively taking on a passive, administrative role focused on reconciliation of asset and note payments with the Acacia CDO 6 trustee. MBIA Capital is a subsidiary of MBIA, Inc. and has approximately 100 employees globally. MBIA Capital has been managing CDOs since February 1997 and has sponsored a total of seven CDO transactions. It currently manages nine CDOs, totaling approximately $2.3 billion, including six for which it acts as replacement manager.

On July 31, 2009, Fitch was notified of a proposed change to the Acacia CDO 6 Collateral Management Agreement in which the CDO asset management responsibilities for the transaction would be assumed by MBIA Capital from RWT. RWT was removed by the trustee, Wells Fargo, N.A., at the direction of 66 2/3% majority of the controlling class of the Acacia CDO 6 noteholders on July 21, 2009. Fitch's initial and on-going rating of CDO transactions includes a review of the CDO asset manager to determine whether they meet the appropriate standards. Fitch's review procedure for potential replacement CDO asset managers is outlined in the special report entitled 'CDO Asset Manager Replacement Activity Update', dated April 24, 2009 and available on Fitch's web site at www.fitchratings.com.

Fitch emphasizes that the scope of its review was solely to determine that MBIA Capital meets Fitch's minimum guidelines to manage Acacia CDO 6 within the context of Fitch's stated review procedure for replacement managers. Furthermore, this review was in the context of the current management responsibilities associated with Acacia CDO 6 and the current ratings assigned to the CDO by Fitch. Fitch is not a party to the transaction and therefore does not provide consent or approval, as that remains the sole preserve of the transaction parties. Fitch expects to be notified by the trustee when or if the proposed transfer of asset management responsibilities is completed.

Acacia 6 is a structured finance CDO that closed in November 2004 and has a portfolio currently comprised of approximately 56.1% prime residential mortgage backed securitizations (RMBS), 23.9% subprime RMBS, 11.6% CDO, and 8.3% commercial mortgage backed securitizations (CMBS). Acacia 6 had a limited reinvestment period that ended in November 2007 and the manager had the ability to sell credit risk and defaulted portfolio assets up until the EOD occurred this past May. As of the latest trustee report dated Aug. 6, 2009, all interest coverage tests are passing; however, all OC tests are failing with the class A/B OC ratio at 84.7% versus its threshold of 107.6%.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.