Fitch Affirms ALESCO Preferred Funding VIII, Ltd.

NEW YORK -- Fitch affirms 11 classes of notes issued by ALESCO Preferred Funding VIII, Ltd. (ALESCO VIII). These affirmations are the result of Fitch's review process and are effective immediately:

--$109,462,277 class A-1A notes affirm at 'AAA';

--$253,753,459 class A-1B notes affirm at 'AAA';

--$70,000,000 class A-2 notes affirm at 'AAA';

--$50,000,000 class B-1 notes affirm at 'AA';

--$5,000,000 class B-2 notes affirm at 'AA';

--$78,500,000 class C-1 notes affirm at 'A';

--$7,500,000 class C-2 notes affirm at 'A';

--$12,000,000 class C-3 notes affirm at 'A';

--$18,000,000 class D-1 notes affirm at 'BBB';

--$4,500,000 class D-2 notes affirm at 'BBB';

--$14,500,000 class E notes affirm at 'BBB-'.

ALESCO VIII is a collateralized debt obligation (CDO) managed by Cohen Bros. Financial Management, LLC that closed Aug. 4, 2005. ALESCO VIII is composed of bank and thrift trust preferred securities and subordinated debt (67.02%) and insurance trust preferred securities, senior notes and surplus notes (32.98%).

Since close, the collateral performance has remained relatively stable with the exception of one $1 million-asset currently deferring interest payments. As of the Sept. 18, 2006 trustee report, the A and B/C/D/E overcollateralization (OC) ratios are stable at 153.75% and 106.87%, respectively, versus their initial values of 154.09% and 107.25%, respectively. Both are currently passing their performance test triggers of 125% and 103.9%, respectively.

The ratings on the class A-1A, A-1B and A-2 notes address the likelihood that investors will receive timely payment of interest and ultimate payment of principal by the stated maturity date. The ratings on the class B-1, B-2, C-1, C-2, C-3, D-1, D-2 and E notes address the likelihood that investors will receive ultimate payment of interest and ultimate payment of principal by the stated 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 web site at www.derivativefitch.com. For more information on Fitch's approach to rating CDOs of trust preferred securities, see the special report 'Rating Criteria for U.S. Bank and Insurance Trust Preferred CDOs' dated Feb. 2, 2005 and also available on Fitch's web site.

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.