Fitch Affirms IndyMac Bancorp's IDR at 'BBB-'; Outlook Revised to Stable.

NEW YORK -- Fitch Ratings has affirmed the long-term Issuer Default Rating (IDR) of IndyMac Bancorp (NDE) at 'BBB-'. The Rating Outlook has been revised to Stable from Positive. (See complete list of ratings affected by this action at the end of this release).

The affirmation reflects NDE's relatively good performance amid an extremely challenging mortgage environment. Fitch believes that the company's seasoned management team and a much improved risk management function will help NDE endure profitability pressures and deteriorating asset quality. The rating is also supported by stable funding and liquidity sources. In addition to deposits and access to FHLB funding, NDE has approximately $2.8 billion of unencumbered liquid assets. More recently, the company has relied less on short-term, secured funding.

The Rating Outlook revision reflects the likelihood that 2007 will be a transitional year for both NDE and the industry. Although the company's production volume has been strong, NDE's Mortgage Banking Revenue (MBR) margin has dropped recently and consistently narrowed over the last five years. Fitch believes that a prolonged mortgage market weakness will make it difficult for NDE to grow production and replicate earnings performance enjoyed over the last three years. NDE does not possess the same risk profile or focus shared by companies participating in the lower end of the credit spectrum that have struggled or folded. Although subprime production was less than 3% in 2006, NDE is not immune to subprime contagion and secondary market risk aversion.

Future rating actions will be based on NDE's execution of its strategic plan that will emphasize retail mortgage banking. In considering positive rating actions, Fitch will evaluate the company's ability to improve while maintaining current risk-adjusted capital levels. Negative rating actions would be considered if credit costs are higher than expected or external events beyond management's control materialize. Such events include, for example, mortgage industry regulatory reform or a marked declined in California real estate prices. Fitch would also consider negative rating actions if NDE manages capital more aggressively.

Fitch has affirmed the following ratings with a Stable Outlook:

IndyMac Bancorp

--Long-term Issuer Default Rating (IDR) at 'BBB-';

--Long-term senior debt rating at 'BBB-';

--Short-Term Issuer at 'F2';

--Individual at 'B/C';

--Support at '5'.

IndyMac Bank, FSB 

--Long-term deposit rating at 'BBB';

--Long-term Issuer Default Rating (IDR) at 'BBB-';

--Short-Term Issuer at 'F2';

--Short-term deposits at 'F2';

--Individual at 'B/C';

--Support at '5'.

IndyMac Capital Trust

--Preferred securities at 'BB+'.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.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.