Fitch Ratings Affirms Vermeer Funding, Ltd.

NEW YORK -- Fitch Ratings affirms four classes of notes issued by Vermeer Funding, Ltd. (Vermeer Funding). These affirmations are the result of Fitch's review process and are effective immediately:

-- $244,232,902 class A-1 notes 'AAA';

-- $38,500,000 class A-2 notes 'AAA';

-- $37,625,000 class B notes 'AA';

-- $15,214,753 class C notes 'BBB'.

Vermeer Funding is a collateralized debt obligation (CDO) managed by Rabobank which closed April 13, 2004. Fitch rates Rabobank 'CAM2' on its structured finance asset manager rating. Vermeer Funding is composed of residential mortgage-backed securities (RMBS), commercial mortgage-backed securities (CMBS) and CDO collateral. Included in this review, Fitch discussed the current state of the portfolio with the asset manager and their portfolio management strategy going forward.

Since close, the collateral has performed within expectations. The weighted average rating factor has stayed the same at 3.69 ('BBB'). As of the most recent trustee report dated Feb. 26, 2005, the class A/B overcollateralization (OC) ratio was 109.06 which is a slight decrease from 109.13 on Aug. 11, 2004, the date of the effective date portfolio, compared with a trigger of 104%. The class C OC ratio has decreased slightly to 103.73 from 103.76 with a minimum trigger of 101%.

Vermeer Funding is still in the substitution period, which ends June 3, 2007. There have been no defaults or delinquencies in the collateral pool. Distributions to the preference shares are limited to an internal rate of return (IRR) of 16%. Any distributions beyond this cap will be used to pay down the notes in reverse sequential order. As a result of this limit being reached, $1.75 million of the class C notes were redeemed.

The ratings of the class A-1 senior secured floating-rate notes, the class A-2 senior secured floating-rate notes and the class B senior secured floating-rate notes address the likelihood that investors will receive timely payments of interest, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. The 'AAA' rating of the class A-2 senior secured floating-rate notes also addresses the timely payment of interest on a monthly basis as outlined in the basis swap transaction confirmation. The rating of the class C mezzanine secured floating-rate notes addresses the likelihood that investors will receive ultimate interest payments, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date.

As a result of this analysis, Fitch has determined that the original ratings assigned to the class A-1, class A-2, class B and class C 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, also available at www.fitchratings.com.