Fitch Ratings Affirms 2 Classes of BEA CBO 1998-1.

NEW YORK -- Fitch affirms the ratings of two classes of notes issued by BEA CBO 1998-1, Ltd./Corp. (BEA 1998-1), which closed May 21, 1998. The following rating actions are effective immediately:

-- $70,945,313 class A-2A notes 'B-';

-- $12,403,027 class A-2B notes 'B-'.

Additionally:

-- $26,000,000 class A-3 notes remain at 'CC';

-- $45,000,000 class B notes remain at 'C'.

BEA 1998-1 is a collateralized bond obligation (CBO) backed predominantly by high yield bonds. Payments are made semi-annually in June and December and the reinvestment period ended in December, 2002. Included in this review, Fitch discussed the current state of the portfolio with the asset manager, Prudential Investment Management, Inc.

According to the April 4, 2005 trustee report, the portfolio includes $13.21 million (15.4%) in defaulted assets. Additionally, the class A overcollateralization (OC) test is failing at 67.70% with a trigger of 128%, and the class B OC test is failing at 46.77% with a trigger of 110%. Considering the portfolio deterioration to date, it is possible that the class A-2A and A-2B notes will incur a nominal loss.

The ratings of the class A-2A and A-3 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 rating of the class A-2B notes addresses the likelihood that investors will receive the aggregate outstanding amount of principal by the stated maturity date. The rating of the class B notes addresses the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the stated balance of principal by the stated maturity date.

Fitch will continue to monitor BEA 1998-1 closely to ensure accurate ratings. Deal information and historical data on BEA 1998-1 is available on the Fitch Ratings web site at www.fitchratings.com.