Fitch Affirms 2 Classes of Stedman Loan Fund, Ltd.

NEW YORK -- Fitch Ratings affirms two classes of notes issued by Stedman Loan Fund, Ltd. (Stedman).

The following rating actions are effective immediately:

-- $57,400,000 class A notes affirmed at 'A';

-- $38,000,000 class B notes affirmed at 'BBB'.

Stedman is a synthetic collateralized loan obligation (CLO) that closed on June 29, 2005 and provides investors leveraged exposure to a diversified portfolio of high yield senior loans utilizing a total rate of return swap with Citibank, N.A. Stedman is managed by Hartford Investment Management Company (HIMCO; rated 'CAM2' for managing bank loan collateralized debt obligations) and will exit its reinvestment period on June 10, 2014.

These affirmations are a result of the stable credit quality of the reference portfolio. Since close, the portfolio's weighted average rating factor has remained in the 'BB-/B+' range, improving to 22.3, according to the most recent trustee report dated Aug. 31, 2006, from 23.2, as reported in the Aug. 31, 2005 report, relative to a 24.5 maximum covenant. During this same period, the weighted average spread decreased marginally to 2.3% from 2.4% and the weighted average mark-to-market price decreased to 99.98 from 100.99. The Aug. 31, 2006 report shows an unrealized mark-to-market loss of $461,142, compared to an unrealized mark-to-market gain of approximately $4.7 million on Aug. 31, 2005. However, Fitch has determined that the deteriorating market condition is consistent within the current ratings assigned to the notes, and the ratings still reflect the current risk to the noteholders.

The rating assigned to class A notes addresses the timely payment of interest and the ultimate repayment of principal at maturity. The rating assigned to the class B notes addresses the likelihood of the payment of amounts to the class B noteholders sufficient to produce a yield to maturity of not less than the class B interest rate if held to the stated maturity. The rating does not address the timing of payments.

Fitch will continue to monitor and review this transaction for future rating adjustments. Additional deal information and historical data are available on the Fitch Ratings web site at 'www.fitchratings.com'. For more information on the Fitch VECTOR Model, see 'Global Rating Criteria for Collateralised Debt Obligations,' dated Sept. 13, 2004 and also available on Fitch's web site at 'www.fitchratings.com'.

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.