Fitch Affirms HYPPCO Finance Company Ltd.

NEW YORK -- Fitch affirms one class of notes issued by HYPPCO Finance Company Ltd., (HYPPCO). This affirmation is the result of Fitch's review process and is effective immediately:

--$40,066,946 class A-2 notes affirm at 'CCC-', Distressed Recovery (DR) revision to 'DR2' from 'DR4'.

HYPPCO is a collateralized debt obligation (CDO), comprised primarily of high yield bonds, that closed Feb. 29, 1996 and is managed by Delaware Investment Advisors. Included in this review, Fitch discussed the current state of the portfolio with the asset manager and their portfolio management strategy going forward.

HYPPCO contains exposure to a recently defaulted Sea Containers bond, which accounts for roughly 8.4% of the current portfolio of eligible assets. Though the transaction will suffer losses upon the sale of this bond, the substantial redemptions of the liabilities since the last rating review largely mitigate this negative event. At the time of the last review, there was $115.7 million of the A-2 notes remaining. Since then, over $75.6 million in principal has been paid to the note holders. Although the transaction remains under-collateralized with a 71% overcollateralization ratio as of the Oct. 2, 2006 trustee report, Fitch projects that the A-2 notes will continue to receive significant principal payments in the future; however, there will likely not be enough proceeds to fully redeem the notes. The current rating remains reflective of the expected ultimate principal recovery of the notes.

Based on Fitch's improved projections of total principal and interest proceeds to be paid to the class A-2 notes, the DR rating on the notes has been revised to 'DR2' from 'DR4'.

The rating of the class A-2 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.

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 Oct. 4, 2006 and also available on Fitch's web site at www.fitchratings.com.

Fitch's Distressed Recovery (DR) ratings, introduced in April 2006 across all sectors of structured finance, are designed to estimate recoveries on a forward-looking basis while taking into account the time value of money. For more information on Distressed Recovery ratings, see the full report ('Structured Finance Distressed Recovery Ratings'), which is available on the Fitch Ratings 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.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.