Fitch Affirms Brascan Structured Notes 2005-2 Ltd/LLC.

NEW YORK -- Fitch affirms all classes of Brascan Structured Notes 2005-2 Ltd/LLC as follows:

--$103,050,000 class A floating-rate at 'AAA';

--$29,700,000 class B floating-rate at 'AA';

--$34,500,000 class C floating-rate a at 'A';

--$34,500,000 class D floating-rate at 'BBB';

--$13,350,000 class E floating-rate at 'BBB-'.

Deal Summary:

Brascan Structured Notes 2005-2 Ltd/LLC is a revolving commercial real estate cash flow collateralized debt obligation (CDO) that closed on Dec. 20, 2005. It was incorporated to issue $300,000,000 of floating-rate notes and income notes. As of Dec. 15, 2006, the CDO was invested in a portfolio of commercial mortgage B-notes (37.6%), commercial real estate mezzanine loans (39.9%), and cash (22.5%). The CDO is also permitted to invest in commercial mortgage whole loans.

The portfolio is selected and monitored by Brascan Real Estate Financial Partners LLC (BREF). Brascan Structured Notes 2005-2 Ltd/LLC has a five-year reinvestment period during which, if all reinvestment criteria are satisfied, principal proceeds may be used to invest in substitute collateral. The reinvestment period ends in December 2010.

Class F notes were not issued at closing. The notes are authorized to be issued on or before the March 2007 payment date at the election of the holders of the income notes.

Asset Manager:

BREF is wholly owned by Brookfield Asset Management (Brookfield), formerly the Brascan Corporation. Brookfield is publicly traded on both the NYSE and TSE (ticker symbol: BAM). Brookfield is a specialist asset manager, focusing on property, power, and infrastructure assets, with approximately $50 billion in assets under management.

BREF began operations in September 2002. In addition to managing Brascan Structured Notes 2005-2, BREF is the collateral manager for the $300 million Brascan Real Estate CDO 2004-1, and serves as the fund manager for the $600 million Brascan Real Estate Finance Fund (BREF ONE, LLC), an alternative asset fund that makes high-yield real estate finance investments. BREF is staffed by nine investment professionals with extensive capital markets and commercial real estate finance experience. BREF also utilizes resources from Brookfield and its affiliates. Members of Brookfield's senior management, including its CEO, Mr. Bruce Flatt, sit on BREF ONE, LLC's investment committee. The same investment committee approves investments held within BREF's CDOs.

Performance Summary:

Since closing and as of the December 2006 trustee report, the CDO maintains a significant amount of reinvestment flexibility. The Fitch poolwide expected loss (PEL) is 40.625% compared to a modeled PEL of 64.750%. This results in a significantly above average reinvestment cushion of 24.125%.

The weighted average spread (WAS) has decreased since the effective date to 3.62% from 4.48%; however, the WAS remains above the covenant of 3.25%. The weighted average coupon (WAC) has remained the same at 8.00%, which is above the 7.00% covenant. Approximately 8.3% of the loans in the pool are fixed rate and unhedged, which is below the covenant of 15%. The weighted average life (WAL) has decreased to 1.11 years from 1.57 years at the effective date, implying that the pool composition will fully turnover during the reinvestment period. Additionally, the overcollateralization (OC) and interest coverage (IC) ratios of all classes have remained above their covenants, as of the December 2006 trustee report.

Although there is above average reinvestment cushion, upgrades during the reinvestment period are unlikely, given that the pool could still migrate to the modeled PEL. The Fitch PEL is a measure of the hypothetical loss inherent in the pool at the 'AA' stress environment before taking into account the structural features of the CDO liabilities. Fitch PEL encompasses all loan, property, and poolwide characteristics modeled by Fitch.

Collateral Analysis:

The pool has remained invested primarily in subordinate CRE debt with 77.5% of the ramped portfolio invested in B-notes and mezzanine debt as of December 2006. The remaining 22.5% is held in cash.

Since the effective date, six loans totaling approximately $115.7 million have been paid off in full. Additionally, since the effective date, the CDO has acquired two loans, a $20 million B note and a $24.8 million mezzanine participation loan.

Currently, the largest percent of non-traditional assets in the pool is condominium conversions with 26.4%, based on Fitch categorizations, up slightly from the effective date percentage of 20.0%. Hotels have decreased to 12.1% from 23.9% as of the effective date. Office properties remain the largest percentage at 32.3% of the loan portfolio. The property type composition is within the covenant guidelines, as of the December 2006 trustee report.

The pool is one of the most concentrated CRE CDOs issued to date. The Herfindahl score is 9.58 compared to the covenant of 9.5. The CDO is within all of its geographic location covenants with 47.1% of the assets located in New York and 14.4% of the pool located in California based on Fitch categorizations.

For a summary of the Fitch Loans of Concern and the 10 largest loans, please refer to the Brascan Structured Notes 2005-2 CREL Surveyor Snapshot on the Fitch Research website, which will be available beginning Feb. 7, 2007.

Rating Definitions:

The ratings of the class A and B notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. The ratings of the class C, D, and E notes address the likelihood that investors will receive ultimate interest and deferred interest payments, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date.

Ongoing Surveillance:

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 Rating Methodology for CREL CDOs, see 'Rating Methodology for U.S. Commercial Real Estate Loan CDOs' dated Sept. 25, 2006 and also available 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.