Fitch Affirms 7 Classes of Putnam Structured Product CDO 2001-1, Ltd.

NEW YORK -- Fitch affirms seven classes of notes issued by Putnam Structured Product CDO 2001-1, Ltd., effective immediately:

--$56,000,000 class A-1MM-a 'AAA/F1+';

--$50,000,000 class A-1MM-b 'AAA/F1+';

--$105,000,000 class A-1SS 'AAA';

--$35,000,000 class A-2 'AAA';

--$24,000,000 class B 'AA';

--$7,615,420 class C-1 'BB+';

--$7,615,420 class C-2 'BB+'.

Putnam Structured Product CDO 2001-1, Ltd. is a collateralized debt obligation (CDO) that closed November 20, 2001 and is managed by Putnam Advisory Company LLC (Putnam Advisory). Putnam Structured Product CDO 2001-1, Ltd. has a revolving portfolio composed of CDOs, commercial mortgage-backed securities (CMBS), real estate investment trusts (REITs), residential mortgage-backed securities (RMBS), synthetic structures, and other asset-backed securities (ABS). Putnam Structured Product CDO 2001-1, Ltd. will exit its reinvestment period in February 2007. Included in this review, Fitch discussed the current state of the portfolio with the asset manager and their portfolio management strategy going forward.

These affirmations are the result of slight improvements in credit enhancement levels, due to the purchase of additional collateral and the de-levering of the class C notes via the class C adjusted overcollateralization (OC) ratio trigger. According to the trustee report dated April 28, 2006, the class A/B OC ratio decreased to 107.8% from 107.9%, as of the trustee report dated November 26, 2004, and the class C OC ratio increased to 102.1% from 101.5%. The class A/B IC and class C IC ratios increased to 126.8% and 117.1%, from 123.0% and 112.7%, respectively. Since the last review, the weighted average rating factor (WARF) of the assets increased to 'BBB/BBB-' from 'BBB-'.

Putnam Advisory has also continued its strategy in purchasing short-duration, U.S. agency mortgage derivatives, such as inverse floaters, in order to maintain weighted average spread and coupon covenants. In fact, the exposure to inverse floating assets increased to 10% from 2% of the portfolio since the last review. As a result, the addition of these 'AAA' bonds improved the WARF and IC ratios, as previously mentioned, without diminishing the creditworthiness of the portfolio. However, the increased concentration of inverse floaters may cause the portfolio's weighted average coupon to suffer as interest rates rise.

The rating of the class A-1MM, A-1SS, A-2, and B notes addresses the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal, by the legal final maturity date. In addition, the rating on the class A-1MM notes addresses the noteholders' ability to put the notes back to the put provider on its next applicable remarketing date, which will be no later than one year from its prior remarketing date. The ratings of the class C notes address the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the 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 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.