Fitch Affirms KKR Pacific Funding Trust.

NEW YORK -- Fitch affirms one class of notes issued by KKR Pacific Funding Trust (KKR Pacific). This affirmation is the result of Fitch's review process and is effective immediately:

--$5,000,000,000 Secured Liquidity Notes (SLN) program Affirmed at 'F1+'.

KKR Pacific is an SLN program that closed Sept. 30, 2005. The administrator of KKR Pacific is KKR Financial Advisors III, LLC, which is a real estate investment trust that invests in fixed income securities, loans and private equity as part of its strategy. KKR Pacific is a special purpose, bankruptcy-remote Delaware statutory trust established for the sole purpose of issuing SLNs to fund the purchase of certain mortgage-backed securities from KKR Pacific Funding Depositor Corp. LLC and KKR Financial Corp., pursuant to a master repurchase agreement. The securities acquired will, among other eligibility requirements, be limited to: securities that are direct obligations of, or that are fully guaranteed as to principal and interest by the Government National Mortgage Association, the Federal Home Mortgage Loan Corporation, or the Federal National Mortgage Association, and securities that are issued by any bankruptcy-remote, limited purpose issuer of residential mortgage-backed securities and that are rated 'AAA'.

The affirmation is the result of credit enhancement provided in the form of overcollateralization, collateral eligibility requirements, and the legal and financial structure of the transaction. Since the transaction closing, the collateral has continued to exhibit stable performance. Since the deal inception all the monthly collateral tests have been passing their covenants. Each SLN will have an expected maturity, at the option of KKR Pacific, of up to 300 days. If available funds are insufficient to repay face-value of the maturing notes, the SLNs will be converted into a class of extended notes having maturities of 30 business days following the expected maturity.

The rating of the SLN addresses the likelihood that investors will receive their 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.