Fitch Rates ABACUS 2005-7, Ltd. 'AAA'.

NEW YORK -- Fitch Ratings assigns the following rating to ABACUS 2005-7, Ltd.

--$100,000,000 variable-leverage super senior notes, due 2046 'AAA'.

This is a leveraged super senior transaction that will issue $100 million in credit-linked notes. The note proceeds will collateralize a credit default swap with Goldman Sachs Capital Markets, L.P. (GSCM), the protection buyer, that references a static portfolio of 30 equally sized 'AAA' rated CMBS (commercial mortgage-backed securities) assets. The obligations of GSCM under the credit default swap are guaranteed by Goldman Sachs Group, Inc. (GS Group). The credit default swap synthetically transfers the credit risk on the 10%-100% portion of the reference portfolio from GSCM to the issuer with respect to credit events.

GSCM will make monthly premium payments to the issuer and in return, the issuer will cover realized losses on the reference portfolio in excess of the first loss amount of 10%. If the losses are reimbursed on a reference obligation, GSCM will pay write-down reimbursement amounts to the issuer.

The proceeds of the issuance of the notes will be invested in a pool of U.S.-dollar-denominated collateral securities, consisting of high-quality senior-most classes of obligations, maturing no later than on the stated maturity of the notes. The issuer has entered into a basis swap with Goldman Sachs Mitsui Marine Derivative Products, L.P. (GSMMDP), the basis swap counterparty. GSMMDP is jointly guaranteed by Mitsui Sumitomo Insurance Co. Ltd. and GS Group. Pursuant to the basis swap agreement, GSMMDP will pay the LIBOR portion of interest on the notes.

Additionally, the issuer has entered into a collateral put agreement with Goldman Sachs International (GSI). The obligations of GSI under the put agreement are guaranteed by GS Group. Under the collateral put agreement, GSI agrees to purchase the collateral securities at 100% of their principal amount under certain circumstances, thereby protecting the noteholders from declines in the market value of the collateral in those circumstances. The counterparty risk is mitigated through structural features that require counterparties to post collateral, obtain guarantees, or replace themselves when such counterparties no longer satisfy the criteria.

The transaction can be terminated whenever the expected losses, as defined in the documents, exceed the appropriate trigger level unless a noteholder decides to de-lever the transaction by posting additional funding. If a noteholder does not increase the funded amount of its notes or elects to exercise a noteholder optional redemption, such noteholder will be exposed to the mark-to-market risk relating to the value of the collateral and the mark-to-market termination value of the applicable portion of the credit default swap.

The rating is based upon the credit quality of the reference portfolio, the legal structure of the transaction, the financial strength of the counterparties and their guarantors, as well as on the credit quality of the trust assets. The rating assigned to the notes addresses the timely payment of interest and the ultimate payment of principal of the notes at maturity.

Fitch will monitor the performance of this transaction. Deal information and historical data on ABACUS 2005-7, Ltd. is available on the Fitch Ratings web site at www.fitchratings.com.

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