Fitch Assigns 'AAA' Rating to ZARS 2004-1.

Business Editors

NEW YORK--(BUSINESS WIRE)--April 16, 2004

Fitch Ratings has assigned an 'AAA' rating to the Zero Accrual Receipts, series 2004-1 (ZARS). ZARS is an investment structured by Lazard Freres & Co. LLC, whereby investors gain exposure to a yield-enhanced, zero-coupon bond issued by Resolution Funding Corporation (RefCorp Zero). The investors achieve a higher yield than the yield to maturity (YTM) of an underlying zero-coupon bond by repackaging the zero with a short position on a call option.

The repackaging of the bond is done through a depository agreement whereby U.S. Bank, N.A. will deposit the RefCorp Zero into a trust account for the benefit of the investors in exchange for the investors providing cash in the amount of the value of the RefCorp Zero less the proceeds generated from the short call option written on the RefCorp Zero through the depository agreement.

ZARS will come due on the maturity of the underlying RefCorp Zero in 2020 or upon the exercise of the call option by the call option holder. The call option holder will pay the amount of proceeds necessary to maintain the original agreed upon yield-to-call.

Deal information and historical data on ZARS 2004-1 are available on the Fitch Ratings web site at 'www.fitchratings.com'.