Fitch Affirms Guggenheim Structured Real Estate Funding 2006-3.

NEW YORK -- Fitch has affirmed all classes of Guggenheim Structured Real Estate Funding 2006-3, Ltd. and Guggenheim Structured Real Estate Funding 2006-3, LLC (Guggenheim 2006-3) as follows:

--$20,000,000 class S notes affirmed at 'AAA';

--$181,455,000 class A-1 notes affirmed at 'AAA';

--$22,800,000 class A-2 notes affirmed at 'AAA';

--$42,052,000 class B notes affirmed at 'AA';

--$42,053,000 class C notes affirmed at 'A';

--$24,029,000 class D notes affirmed at 'BBB+';

--$28,036,000 class E notes affirmed at 'BBB-';

--$18,022,500 class F notes affirmed at 'BB';

--$20,000,000 class G notes affirmed at 'B'.

Deal Summary:

Guggenheim 2006-3 is a $400,500,000 revolving commercial real estate (CRE) cash flow collateralized debt obligation (CDO) that closed on August 17, 2006. As of the August 20, 2007 trustee report and based on Fitch categorization, the CDO was invested as follows: CRE bank loans (29.8%), CRE mezzanine loans (27.0%), CRE B-notes (20.7%), CRE whole loans/A-notes (14.7%), CMBS (4.1%) and CRE CDOs (3.4%). The CDO is also permitted to invest in CTLs, REIT Debt, CRE TruPS, and synthetic securities.

The portfolio is selected and monitored by GSREA, LLC (GSREA). Guggenheim 2006-3 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 September 2011.

Collateral Asset Manager:

Through its two private equity funds, Guggenheim Structured Real Estate (GSRE) is a private investor in commercial real estate debt, specializing in high-quality income-producing U.S. properties with experienced sponsorship. GSRE funds are managed by GSREA, both of which are affiliated with Guggenheim Partners, LLC (GP), a diversified financial services firm with more than 525 employees and over $125 billion of assets under supervision. The two equity funds have over $1.1 billion of private equity and have made approximately $7.0 billion of investments. None of the funds' investments have had losses or delinquencies.

Fitch rates GSREA a 'CAM2' U.S. Commercial Real Estate CDO Asset Manager. GSREA has ten experienced real estate and investment professionals on staff, three of whom have prior commercial real estate loan workout experience. GSREA benefits from its affiliation with GP with respect to real estate markets information flow, CDO administration, and back office support. Generally, GSRE investments are serviced by rated CMBS servicers. For more details, please refer to the Derivative Fitch Asset Manager Profile on Guggenheim Structured Real Estate available on the Derivative Fitch web site www.derivativefitch.com.

Performance Summary:

Since Fitch's last review in January 2007, and as of the August 2007 trustee report, the modeled as-is poolwide expected loss (PEL) has decreased to 22.250% from 23.125%. The PEL covenant is based on a weighted-average spread (WAS) and PEL matrix. The matrix provides between 11.875% and 14.125% of cushion to the as-is PEL, which represents an above average amount of cushion relative to other similar Fitch rated CRE CDOs. Based on the current weighted average spread (WAS) of 2.50%, the deal has 13.750% cushion.

The decrease in the as-is PEL is a result of the change in the composition of pool. Since last review, the CDO added three CRE loans (15.8% of the CDO), including a senior mezzanine position of the Sheffield NYC condominium conversion (7.5%), and an A-note position of the Universal Boulevard Orlando master planned development (5.1%). The repaid CRE loans include the La Quinta Portfolio, Affina NYC Portfolio, ESA Portfolio and the Marriott Waikiki. The remaining loans have maintained relatively flat or decreased as-is expected loss levels.

In addition to the above referenced CRE loans, three senior secured real estate bank loans have been added (13.9%) and one CRE CDO (3.4%). Since the last Fitch review the securities and bank loans, which have grown to 37.3% from 22.3% of the CDO, have experienced an improved weighted average rating factor (WARF). The WARF is now in the 'BB-/B+' rating category.

The CDO is in compliance with all reinvestment covenants. Although the weighted average coupon (WAC) has remained the same (6.58%) since the last review, the WAS has decreased to 2.50% from 2.67%. In addition, the weighted average life (WAL) has decreased to 3.6 years from 4.3 years, continuing to imply that the pool composition will fully turn over during the reinvestment period.

The over collateralization (OC) and interest coverage (IC) ratios of all classes have remained above their covenants, as of the August 2007 trustee report.

Collateral Analysis:

Based on the invested amount, the pool is comprised mostly of real estate bank loans (29.8%), followed by mezzanine debt (27.0%), B-notes (20.7%), whole loans/A notes (14.7%), CMBS (4.1%) and CRE CDOs (3.4%). GSREA typically invests in the middle of a capital structure such that there are multiple layers of subordinate lenders providing insulation beneath its position.

Since the last Fitch review, the percent of hotel properties has decreased to 11.9% from 41.2% of the CDO. In addition, since the last review the transaction has gained exposure to non-income producing properties including one condominium conversion (7.5%) and a master planned land development (5.1%). The condominium conversion is a 50-story mixed use building located on 57th street between 8th and 9th avenue in Manhattan. The conversion has secured all necessary approvals and is in the process of selling units. Additionally, the current loan basis of the CDO's position is approximately $691 per square foot. The land development property is a 512.3 acre land parcel located adjacent to the Orange County Convention Center in Orlando, FL. The proposed mixed use development benefits from flexible entitlements and an up-front interest reserve that provides for interest payments, through the extended maturity date, calculated at the interest rate cap. Retail properties remain the largest percentage of traditional property types (12.3%, up from 10.7%), followed by multifamily (9.6%, which remained the same). Property type covenants are within their covenanted guidelines.

The pool is one of the more concentrated pools relative to other similar Fitch rated CRE CDOs. Based on the August 20, 2007 trustee report, the loan diversity index score is currently 741 compared to the covenant of 870. The largest two loans represent 11.9% and 10.0% of the fully ramped collateral amount. The CDO is well within all of its geographic location covenants with 16.9% of the assets located in New York and 16.6% of the assets located in California.

For a summary of the Fitch Loans of Concern and the 10 largest loans, please refer to the Guggenheim 2006-3 CREL Surveyor Snapshot on the Derivative Fitch web site, which will be available beginning September 20, 2007.

Rating Definitions:

The ratings of the classes S, A-1, A-2, 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, E, F and G 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 and will issue an updated Snapshot report after each committeed review. The surveillance team will conduct a review whenever there is approximately 15% change in the collateral composition or semi-annually. For more detailed information, please see the Guggenheim 2006-3 CREL Surveyor Snapshot 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, which is 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.