Fitch Ratings Affirms Six Classes of Sutter CBO 1998-1 Ltd.

Business Editors

NEW YORK--(BUSINESS WIRE)--May 23, 2003

Fitch Ratings affirms six classes of notes issued by Sutter CBO 1998-1 Ltd.

These affirmations are the result of Fitch's annual review process. The following rating actions are effective immediately:

-- $63,296,732 class A-1 floating-rate notes 'AAA';

-- $108,340,642 class A-2A floating-rate notes 'AAA';

-- $19,591,436 class A-2B notes 'AAA';

-- $15,000,000 class A-3 5.45% step-up coupon notes 'BBB';

-- $30,000,000 class A-3L floating-rate notes 'BBB';

-- $20,000,000 class B 7.70% notes 'B-'.

Sutter CBO 1998-1 Ltd. is a collateralized debt obligation (CDO) managed by Wells Fargo Bank, N.A. (Wells Fargo). Fitch has reviewed the portfolio performance of Sutter CBO 1998-1 Ltd. and has discussed the current and future state of the portfolio with Wells Fargo. Fitch is comfortable that the management team is well informed on all of the portfolio credits, the industries in which they operate, as well as the high yield industry overall.

The revolving period for Sutter CBO 1998-1 Ltd. ended on March 2, 2003. It is currently in its amortization period whereby principal is used to pay down notes instead of being reinvested. The portfolio has experienced some deterioration since the previous Fitch rating actions were taken on February 2002. The class A and class B overcollateralization (O/C) ratios continue to fail as of the May 2, 2003 trustee report dropping from 110.44% to 108.05% and 102.22% to 98.37%, respectively. The current portfolio par amount is approximately $286.6 million of which 16.09% is in defaulted securities and roughly 24% in securities rated below 'B-' (excluding defaults). A majority of the assets (93.5%) have a fixed-rate coupon with an overall weighted average coupon of 9.21%. Because the portfolio has maintained a relatively high weighted average coupon, there is a good deal of excess spread that has been used to redeem senior notes. Despite some of the deterioration in the portfolio, Sutter CBO 1998-1 Ltd. is performing within Fitch's expectations.

Fitch conducted cash flow modeling utilizing various default timing and interest rate scenarios to measure the breakeven default rates relative to the minimum cumulative default rates required for the rated liabilities. As a result of this analysis, Fitch has determined that the current ratings assigned to all the rated classes of notes still reflect the current risk to note holders.

Fitch will continue to monitor and review this transaction for future rating adjustments.

Additional deal information and historical data are available on the Fitch Ratings web site at 'www.fitchratings.com'.