Fitch Affirms TABERNA Preferred Funding I, Ltd.

CHICAGO -- Fitch affirms 10 classes of notes issued by TABERNA Preferred Funding I, Ltd. (TABERNA I). These affirmations are the result of Fitch's review process and are effective immediately:

--$356,000,000 class A-1A notes affirmed at 'AAA';

--$15,000,000 class A-1B notes affirmed at 'AAA';

--$87,000,000 class A-2 notes affirmed at 'AAA';

--$64,000,000 class B-1 notes affirmed at 'AA';

--$10,000,000 class B-2 notes affirmed at 'AA';

--$37,750,000 class C-1 notes affirmed at 'A';

--$25,750,000 class C-2 notes affirmed at 'A';

--$4,500,000 class C-3 notes affirmed at 'A';

--$13,500,000 class D notes affirmed at 'BBB+';

--$33,444,723 class E notes affirmed at 'BBB'.

TABERNA I is a collateralized debt obligation (CDO) that closed March 15, 2005 and is managed by TABERNA Capital Management, LLC. TABERNA I has a static portfolio composed of trust preferred securities issued by real estate investment trusts (REITs) and real estate operating companies, mezzanine commercial mortgage-backed securities, and secondary REIT securities.

Since close, the collateral has continued to exhibit stable performance. The class A/B and C/D overcollateralization (OC) ratios have remained stable at 131.58% and 114.10%, respectively, versus their triggers at 115% and 110%, respectively. The class E OC ratio has improved to 108.2% from 107.5% due to pay down of class E notes through an equity cap feature in the deal.

The ratings of the class A-1A, A-1B, A-2, B-1 and B-2 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. The ratings of the class C-1, C-2, C-3, D and E notes address the likelihood that investors will receive ultimate and compensating interest payments, 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 Fitch's 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.