Fitch Rates Westways Funding VII, Ltd Notes.

NEW YORK -- Fitch rates the following Westways Funding VII, Ltd's (Westways VII) notes:

-- $140 million class A-1 floating-rate senior notes 'AAA';

-- $5 million class A-2 fixed-rate senior notes 'AAA';

-- $10 million class B floating-rate senior subordinate notes 'AA';

-- $10 million class C floating-rate subordinate notes 'A';

-- $10 million class D floating-rate junior subordinate notes 'BBB';

-- $25 million income notes are rated 'BB';

-- $3 million class LC subordinate loan interests 'A';

-- $10 million class LD junior subordinate loan interests 'BBB'.

Westways VII will issue $3 million of the aggregate principal amount that would otherwise be issued as class C notes as the class LC loan interests, and $10 million of the aggregate principal amount that would otherwise be issued as class D notes as the class LD loan interests. The initial principal amount of these securities that would have been class C and D notes, but that are instead issued as class LC and LC loan interests, are a part of the maximum aggregate principal amount of the class C and D notes.

The ratings of the classes A-1, A-2, B, C, and D notes and class LC and LD loan interests reflect the likelihood that investors will receive periodic interest payments through the redemption date as well as their respective stated principal balances. The rating of the income notes only reflects the likelihood that investors will receive their stated principal balances upon the legal final maturity date.

The proceeds of the all classes of notes will be used to purchase a diversified portfolio of primarily floating-rate agency and 'AAA' rated private-label residential mortgage-backed securities (RMBS), commercial mortgage-backed securities (CMBS), and asset-backed securities (ABS). The portfolio can be levered using reverse repurchase agreements equivalent to up to 6 times (x) capital. The portfolio interest rate duration and spread duration will vary with portfolio size. A fully levered portfolio will be limited to a minimum interest rate duration of negative 0.71 years to a maximum of 0.71 years, maximum spread duration of three years, and minimum convexity of negative 2.5 years.

The investment manager, TCW Asset Management Co. (TCW), will actively manage the investments on behalf of the issuer, Westways VII, a special purpose company incorporated under the laws of the Cayman Islands. TCW will manage the portfolio in accordance with specific investment policies, restrictions, and guidelines reviewed by Fitch.

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.