Fitch Downgrades 2 Classes of Duke Funding X CDO, Ltd./Corp. Notes.

NEW YORK -- Fitch Ratings downgrades two classes of notes issued by Duke Funding X CDO, Ltd./Corp. (Duke X). In Fitch's opinion, default of the class A1, A2, A3, B1 and B2 notes is inevitable at or prior to their maturity. The details of the rating action follow at the end of this press release.

The rating actions reflect the continued deterioration in the quality of the portfolio since Duke X was last reviewed. According to the July 6, 2009 trustee report, approximately 79.8% of the portfolio is considered defaulted and all of the overcollateralization (OC) tests are failing by a significant margin. Currently, excess spread after the class A2 interest distribution and all principal proceeds are being used to redeem the outstanding swap counterparty amount due to the failing class A2 OC test. However, based on the degree of undercollateralization in the transaction and Fitch's recovery expectations on the defaulted portion of the portfolio, the class A1 notes are not expected to receive any principal repayment in the future.

The class A1 and A2 notes are likely to continue receiving interest distributions, while the class A3, B1 and B2 notes are not expected to receive any interest or principal distributions going forward.

Duke X is a collateralized debt obligation (CDO) that closed on April 12, 2006 and is managed by Duke Funding Management, LLC. The portfolio is comprised of 58.2% subprime residential mortgage-backed securities (RMBS) and 41.8% prime RMBS.

Duke Funding X CDO, Ltd./Corp.

--$72,000,000 class A1 notes downgraded to 'C' from 'CCC';

--$105,000,000 class A2 notes downgraded to 'C' from 'CC';

--$83,452,014 class A3 notes affirmed at 'C';

--$19,884,662 class B1 notes affirmed at 'C';

--$20,775,100 class B2 notes affirmed at 'C'.

These rating actions reflect the application of Fitch's current criteria which are available at 'www.fitchratings.com' and specifically include the following reports:

--'Global Rating Criteria for Structured Finance CDOs' (Dec.16, 2008);

--'Counterparty Risk in Structured Finance Transactions: Hedge Criteria' (Aug. 1, 2007).

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.