Fitch Ratings Affirms South Coast Funding I, Ltd.

CHICAGO -- Fitch Ratings affirms three classes of notes issued by South Coast Funding I, Ltd. (South Coast I). These affirmations are the result of Fitch's review process and are effective immediately:

--$319,200,000 class A-1 at 'AAA';

--$38,000,000 class A-2 at 'A-';

--$26,000,000 class B at 'BB'.

South Coast I is a collateralized debt obligation (CDO) managed by TCW Investment Management Company (TCW), which closed on Dec. 21, 2001. South Coast I is composed of 76.7% residential mortgage backed securities (RMBS), 6.9% commercial mortgage backed securities (CMBS), 8.1% asset backed securities (ABS), 5.5% CDOs, and 2.8% real estate investment trusts (REITs). Fitch reviewed the credit quality of the individual assets comprising the portfolio.

South Coast I exited the revolving period in December 2005. Since the last review on June 1, 2005, the deal has experienced relatively stable credit enhancement levels. The class A overcollateralization (OC) ratio has increased to 109.0% as of the Feb. 10, 2006 trustee report, from 108.6% as of the April 8, 2005 trustee report, above its performance trigger of 105.0%. The class B OC was 101.6% vs. 101.2% compared to the 101.5% trigger. The class A interest coverage (IC) ratio has decreased to 113.5% from 120.1%, still above the trigger of 112.0%. The class B IC has decreased to 103.1% from 107.4%, below the trigger of 107.0%. The continuing failure of the class B IC test is likely to trigger a paydown to class A on the next payment date in June 2006. As of Feb. 10, 2006, the cash balance in the principal account was $17.7 million. South Coast I experienced no additional defaulted assets since the last review. The Fitch weighted average rating factor continues to fail but has decreased to 18 from 19, above the trigger of 16.

The ratings of the classes A-1 and A-2 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 legal final 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 legal final maturity date.

As a result of this analysis, Fitch has determined that the original ratings assigned to the rated notes still reflect the current risk to noteholders.

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. For more information on the Fitch VECTOR Model, see 'Global Rating Criteria for Collateralised Debt Obligations,' dated Sept. 13, 2004, and also available at www.fitchratings.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.