Fitch Rates Toro ABS CDO II, Ltd./LLC 'AAA/AAA/AA/AA-/A/BBB/BB+'.

CHICAGO -- Fitch Ratings assigns the following ratings to Toro ABS CDO II, Ltd. (the issuer) and Toro ABS CDO II, LLC (collectively, Toro II or co-issuers):

-- $885,000,000 class A-1 first priority senior secured floating rate delayed draw notes, due 2043 'AAA';

-- $56,000,000 class A-2 second priority senior secured floating rate notes, due 2043 'AAA';

-- $24,000,000 class B third priority senior secured floating rate notes, due 2043 'AA';

-- $7,000,000 class C fourth priority senior secured floating rate notes, due 2043 'AA-';

-- $9,000,000 class D fifth priority mezzanine secured deferrable floating rate notes, due 2043 'A';

-- $10,500,000 class E sixth priority mezzanine secured deferrable floating rate notes, due 2043 'BBB';

-- $4,000,000 class F seventh priority mezzanine deferrable floating rate notes, due 2043 'BB+;

Toro II is a cash flow collateralized debt obligation (CDO) managed by Merrill Lynch Investment Managers (MLIM), a global investment management firm. (MLIM is rated 'CAM2' as an asset manager by Fitch).

The ratings of the class A-1, A-2 (collectively, the class A notes), class B and C 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 stated maturity date. The ratings of the class D, E and F notes address the likelihood that investors will receive ultimate and deferred interest payments, including interest on deferred interest payments, as per the governing documents, as well as the stated balance of principal by the stated maturity date.

The ratings are based upon the credit quality of the underlying assets and the credit enhancement provided to the capital structure through subordination and excess spread.

The net proceeds from the issuance of the notes will be used to purchase a portfolio of approximately 88.14% high grade residential mortgage-backed securities (RMBS) and 11.86% (CDOs). The collateral supporting the structure will have a maximum Fitch weighted average rating factor (WARF) of 1.10 ('AA-'/'A+'). Approximately $732.3 million, or 73.2% of the target portfolio, was purchased at closing. The collateral was selected and will be monitored (MLIM) as the collateral manager. MLIM will have 120 days from the closing date to ramp up the portfolio to the target amount of $1.0 billion. The notes have a stated maturity of 2043 and quarterly payments on the notes will begin in September 2006.

MLIM will purchase all investments for the portfolio on behalf of the co-issuers, which are special purpose companies incorporated under the laws of the Cayman Islands and the State of Delaware, respectively. The transaction includes a three-year substitution period, during which principal proceeds may be used to reinvest in substitute collateral, subject to certain eligibility criteria. There will also be a four-year fixed-rate reinvestment period, whereby MLIM may reinvest proceeds from amortizing fixed-rate assets and recoveries. Following the reinvestment period, principal payments will be made on a pro rata basis to the rated notes unless the collateral balance has been reduced to less than $500.0 million, any of the four overcollateralization tests have breached their triggers on any determination date or the class A sequential pay test is not satisfied. Upon failure of any triggers mentioned previously, principal proceeds will be used to pay down the notes on a sequential basis.

For additional information on structural and others features of this transaction, see the Fitch new issue report, 'Toro ABS CDO II, Ltd./LLC, which will soon be available on the Fitch web site, 'www.fitchresearch.com'.

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.