Fitch Affirms 7 Classes of G-Star 2004-4 Ltd./Corp.

CHICAGO & NEW YORK -- Fitch has affirmed seven classes of notes issued by G-Star 2004-4 Ltd. and co-issuer G-Star 2004-4 (Delaware) Corp. (collectively G-Star 2004-4). These affirmations are the result of Fitch's review process and are effective immediately:

--$420,000,000 Class A-1 affirmed at 'AAA'

--$20,000,000 Class A-2A affirmed at 'AA'

--$10,000,000 Class A-2B affirmed at 'AA'

--$12,000,000 Class B affirmed at 'A-'

--$8,000,000 Class C-1A affirmed at 'BBB'

--$6,000,000 Class C-1B affirmed at 'BBB'

--$24,000,000 Preferred shares affirmed at 'BB'

G-Star 2004-4 is a revolving collateralized debt obligation (CDO) that closed August 12, 2004. G-Star 2004-4 is managed by Capmark Investments LP (CDO asset manager rating of 'CAM1' for commercial real estate assets by Fitch). The portfolio is currently composed of residential mortgage-backed securities (RMBS) (66.1%), commercial mortgage-backed securities (CMBS) (20.5%), CDOs (5.1%), and commercial asset-backed securities (8.3%). G-Star 2004-4 will exit its reinvestment period in July 2008.

The affirmations are the result of stable portfolio performance measures, such as overcollateralization (OC) ratios and weighted average rating factor (WARF). According to the most recent trustee report dated March 30, 2007 all overcollateralization and interest coverage ratios have remained stable and continue to pass their covenants. Since Fitch's last review, the WARF improved to 3.6 ('BBB+'/'BBB') from 4.6 ('BBB'/'BBB-'). There are no defaulted assets in the portfolio.

While G-Star 2004-4 has a large exposure to subprime RMBS (64.6%), the portfolio has limited exposure to the 2006 vintage (5.5%). The current portfolio exposure to 2003 and 2004 vintages is 14.9% and 34.3%, respectively. Over 90% of the RMBS exposure is to bonds in the mezzanine part of the RMBS capital structure. However, G-Star 2004-4 has no exposure to subprime RMBS assets rated 'BBB-' and below. Fitch continues to closely monitor this transaction.

Fitch conducted cash flow modeling utilizing various default timing and interest rate scenarios to measure the breakeven default rates going forward relative to the minimum cumulative default rates required for the rated liabilities.

The ratings of the Class A-1, A-2-A and A-2-B notes address the likelihood that investors will receive timely payments of interest as well as the stated balance of principal by the legal final maturity date, as per the governing documents. The ratings of the Class B, Class C-1-A and C-1-B notes address the likelihood that investors will receive ultimate and compensating interest payments as well as the stated balance of principal by the legal final maturity date, as per the governing documents. The rating of the preferred shares addresses the likelihood that investors will receive their stated balance of principal by the legal final maturity date.

Fitch will continue to monitor and review this transaction for future rating adjustments. Additional deal information and historical data are available on the Derivative Fitch web site at www.derivativefitch.com. For more information on the Fitch VECTOR Model, see 'Global Rating Criteria for Collateralised Debt Obligations,' dated Oct. 4, 2006 and also available on Fitch's web site at www.derivativefitch.com.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.derivativefitch.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. Fitch means Fitch, Inc., Fitch Ratings, Ltd. and their subsidiaries including Derivative Fitch, Inc. and Derivative Fitch Ltd. and any successor or successors thereto.