Lakeside Funding LLC's Secured Liquidity Notes Program Rated 'F1+' by Fitch Ratings.

Business Editors

NEW YORK--(BUSINESS WIRE)--Dec. 18, 2003

Lakeside Funding LLC's ('Lakeside' or the 'Issuer') up to $624.0 million secured liquidity notes (the 'SLNs') are rated 'F1+' by Fitch Ratings. The rating is based on the high credit quality assets held by Lakeside, the put agreement and basis swap agreement provided by AIG Financial Products (AIG-FP), whose payment obligations are absolutely and unconditionally guaranteed by American International Group, Inc. ('AAA/F1+'), and a sound legal structure.

Lakeside is a bankruptcy-remote, special purpose Delaware limited liability company established to issue up to $624.0 million of SLNs. The proceeds from the SLN issuance will be used to purchase all outstanding notes up to the U.S. $624,000,000 Class A-1 First Priority Senior Secured Notes (the 'Class A-1 Notes') issued by Lakeside CDO I, Ltd. and Lakeside CDO I, Inc. The Class A-1 Notes are rated 'AAA', and have a legal final maturity of December 7, 2038. The Class A-1 Notes are the only assets that will be acquired by Lakeside. For more information on the Class A-1 Notes, please refer to the Fitch Ratings press release dated December 18, 2003 entitled 'Lakeside CDO I Ltd. Notes Rated 'AAA'/'BBB' By Fitch Ratings'.

The SLNs have a scheduled maturity date that coincides with the one year anniversary following their issue date. The SLNs will pay interest monthly in arrears on the 8th day of each calendar month equal to LIBOR plus a spread, each such date being a payment date. The SLNs are also callable by the issuer monthly on the 8th day of each calendar month, each such date also being a call date. The Issuer intends to call the SLNs on their respective call dates, by reissuing new SLNs and using the proceeds from the new issuance to pay down the principal portion of the SLNs being called. If the Issuer is unable to call the SLNs, as a result of not being able to issue sufficient replacement SLNs in the aggregate principal amount of the maturing SLNs, below a maximum acceptable spread, existing investors in the SLNs will continue to hold the SLNs at a predetermined interest rate until the next monthly call date. If the Issuer is unable to issue replacement SLNs on any subsequent call date, including the scheduled maturity date, it will result in the original investors having to hold the SLNs until their one year scheduled maturity.

To ensure the ability of the Issuer to make the monthly interest payments on the SLNs, the Issuer has entered into a basis swap agreement with AIG-FP. The basis swap agreement provides that the Issuer will receive from AIG-FP scheduled monthly payments computed by reference to a notional principal amount (equal to the outstanding principal amount of the related SLNs) multiplied by an interest rate based on one month LIBOR plus a spread. In return, Lakeside is obligated to pay to AIG-FP scheduled quarterly payments computed by reference to such notional principal amount multiplied by an interest rate based on three-month LIBOR, which corresponds to the interest payments expected to be received by the Issuer on the Class A-1 Notes.

Lakeside has entered into a put agreement with AIG-FP to ensure its ability to repay the SLNs on their scheduled maturity date. In the event that Lakeside is unable to reissue new SLNs to repay maturing SLNs on their scheduled maturity date, Lakeside is entitled under the put agreement to sell, and the put counterparty is obligated to purchase, subject to certain conditions, at the election of the put counterparty, either the Class A-1 Notes or the related SLNs. The proceeds received by the Issuer from the put counterparty would be used to repay the maturing SLNs on their respective scheduled maturity date. The exercise of the put agreement is conditioned upon, among other things no event of default having occurred relating to a default in the payment of interest or principal on the Class A-1 Notes, and that the put counterparty has received a Note Valuation Report, which states that sufficient funds are available to pay interest on the Class A-1 Notes, no later than two business prior to the SLNs scheduled maturity date. It should be noted that in the event the put counterparty does not receive a Note Valuation Report in accordance with the preceding sentence, the put would still be exercisable if the Issuer has made full interest payments on the Class A-1 Notes on the related quarterly distribution date.

Deutsche Bank Trust Company Americas ('DBTC') and Deutsche International Corporate Services (Delaware) LLC ('DICS') serve as the program's administrator and the Delaware administrator, respectively. In these roles DBTC and DICS are responsible for performing certain corporate management and administrative services for the Issuer. DBTC also serves as the program's custodian, collateral agent, and issuing and paying agent.