Fitch Affirms Newcastle CDO IX.

NEW YORK -- Fitch affirms all classes of Newcastle CDO IX 1, Ltd. and Newcastle CDO IX LLC (Newcastle CDO IX) as follows:

--$33,540,000 class S notes at 'AAA',

--$379,500,000 class A-1 notes at 'AAA',

--$115,500,000 class A-2 notes at 'AAA',

--$37,125,000 class B notes at 'AA+',

--$33,000,000 class C notes at 'AA',

--$20,625,000 class D notes at 'AA-',

--$24,750,000 class E notes at 'A+',

--$18,562,000 class F notes at 'A',

--$18,562,000 class G notes at 'A-',

--$21,656,000 class H notes at 'BBB+',

--$21,656,000 class J notes at 'BBB',

--$19,593,000 class K notes at 'BBB-',

--$23,718,000 class L notes at 'BB'.

Newcastle CDO IX is an $825,000,000 revolving commercial real estate cash flow collateralized debt obligation (CDO) that closed on May 8, 2007. As of the July 31, 2007 trustee report and based on Fitch categorization, the CDO was substantially invested as follows: commercial mortgage whole loans/A-notes (6.8%), B-notes (24.8%), commercial real estate mezzanine loans (34%), bank loans (23.6%), and CMBS (10.9%). The CDO is also permitted to invest in ABS, CDOs, CTLs, REIT Debt, CRE TruPS, and synthetic securities.

The portfolio is selected and monitored by Newcastle Investment Corp. Newcastle CDO IX 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 May 2012.

Newcastle Investment Corp. is rated 'CAM1' by Fitch as a manager of commercial real estate CDOs. Newcastle's collateralized asset manager (CAM) rating can be attributed to its real estate and structured finance management staff. Newcastle CDO IX is their tenth CDO. CDOs are issued to provide Newcastle with match term funding.

Newcastle Investment Corp. is a publicly traded REIT (NYSE:NCT) formed in July 2002 as a successor to Fortress Investment Corp. Newcastle is externally managed by Fortress, with access to all of Fortress' infrastructure and resources.

For more details refer to the Derivative Fitch Asset Manager Profile on Newcastle Investment Corp., available on the Derivative Fitch web site at www.derivativefitch.com.

Newcastle CDO IX became effective on July 31, 2007. As of the effective date, the as-is poolwide expected loss (PEL) has increased slightly to 20.375% from 20.250% at close. The CDO has average reinvestment flexibility with 10.875% of cushion based on its current weighted average spread (WAS) of 2.63%. The CDO's covenanted Fitch PEL varies depending on the in-place WAS. Based on this WAS matrix, the maximum allowable PEL is 33.750% and the minimum is 26.250% (the WAS/PEL matrix). The Fitch PEL is a measure of the hypothetical loss inherent in the pool at the 'AA' stress environment before taking into account the structural features of the CDO liabilities. Fitch PEL encompasses all loan, property, and poolwide characteristics modeled by Fitch.

Commercial real estate loan (CREL) assets comprise 64.1% of the CDO. The increase in as-is PEL is primarily due to the addition of two CREL assets (8.7%) with a weighted average Fitch expected loss above the average expected loss at closing. One loan (4.9%), which had an expected loss below the average at close, has repaid.

Additionally, as of the effective date, the percent of securities and bank loans in the CDO increased slightly to 35.9% from 35.4% at close. The weighted average rating factor (WARF) remained the same at 'B+/B'.

The CDO is in compliance with all its reinvestment covenants. The WAS has increased since the closing date to 2.63% from 2.55%. The weighted average coupon (WAC) has remained the same over the same period at 7.02%, which is above the 5.50% covenant. The weighted average life (WAL) has increased to 3.2 years from 3 years at closing, continuing to imply that the pool composition will fully turnover during the reinvestment period.

In addition, the overcollateralization (OC) and interest coverage (IC) ratios of all classes have remained above their covenants, as of the July 31, 2007 effective date trustee report.

Of the CREL collateral, most is composed of B-notes and mezzanine debt with only 6.8% of the portfolio invested in whole loans/A-notes. Subordinate debt generally carries higher expected losses than whole loans/A-notes. Most of the subordinate loans are secured by interests in institutional quality assets with experienced sponsors on stable income producing properties.

As of the effective date and based on Fitch categorization, the CDO is within all property type covenants. Hotel loans continue to comprise the largest percentage of assets in the pool at 30.9%, up from the closing percentage of 25.6%. The hotel loans are secured by interests in over 150 hotels and include the luxury, full-service, and limited-service segments of the industry, which provides further diversity by hospitality type. Retail properties are the second largest percentage at 13.6% while health care comprises the third largest percentage at 10.9%. The health care loans are backed by over 200 properties in both the skilled nursing and assisted living categories. The CDO is also within all of its geographic location covenants with the highest percentage of assets located in New York at 18.1%. The portfolio continues to be geographically diverse.

The Fitch Loan Diversity Index is 458 compared to the covenant of 571, which represents below average diversity as compared to other CRE CDOs.

Although reinvestment cushion is 10.875%, upgrades during the reinvestment period are unlikely given the pool could still migrate to the PEL covenant.

For a summary of the Fitch Loans of Concern and the 10 largest loans, please refer to the Newcastle CDO IX CREL Surveyor Snapshot, which will be available beginning Sept. 17, 2007, on the Derivative Fitch web site.

The ratings of the classes S, A-1, A-2, B, C and D 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 E, F, G, H, J, K, and L 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.

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 Newcastle CDO IX 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.