Fitch Affirms Independence II CDO Ltd.

CHICAGO -- Fitch affirms two classes of notes issued by Independence II CDO Ltd. (Independence II). The following rating actions are effective immediately:

--$176,905,434 class A notes affirmed at 'A-'.

--$78,000,000 class B notes remain at 'CCC/DR3'.

Independence II is a collateralized debt obligation (CDO) which closed on July, 26, 2001 and is managed by Declaration Management & Research LLC (Declaration). Declaration is rated 'CAM2' by Fitch for managing structured finance CDOs. The collateral portfolio is composed of commercial mortgage-backed securities (CMBS), residential mortgage-backed securities (RMBS), asset backed securities (ABS), collateralized debt obligation (CDO), and real estate investment trusts (REITs). Included in this review Fitch discussed the current state of the portfolio with the asset manager.

These affirmations are the result of stabilization in the portfolio performance since the downgrade on March 6, 2006. According to December 2006 trustee report the Fitch weighted average rating factor has decreased to 31 ('BBB-/BB+') as compared to 36 ('BBB-/BB+') as of the February 2006 trustee report. All overcollateralization (OC) and Interest coverage (IC) tests continue to fail, but remain stable as compared to February 2006 levels. Independence II is currently in the event of default, due to the failure of the aggregate collateral principal balance to be at least equal to the aggregate outstanding amount of the notes. The A note holders have the option to divert all junior interest payments to class A paydowns, however to date no action has been taken to accelerate the notes.

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 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 Derivative Fitch web site at www.derivativefitch.com. For more information on the Fitch VECTOR Model, see 'Global Rating Criteria for Collateralised Debt Obligations,' dated Oct. 4, 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.