Two Classes of BEA CBO 1998-2 Affirmed by Fitch Ratings.

NEW YORK -- Fitch affirms the ratings of two classes of notes issued by BEA CBO 1998-2, Ltd./Corp. (BEA 1998-2). The following rating actions are effective immediately:

--$71,000,000 class A-1 notes 'AAA';

--$100,000,000 class A-2 notes 'AAA'.

Additionally:

--$20,000,000 class A-3 notes remain at 'C';

--$22,000,000 class B-1 notes remain at 'C';

--$8,500,000 class B-2 notes remain at 'C'.

BEA 1998-2 is a collateralized bond obligation (CBO) backed predominantly by high yield bonds. The class A-1 and A-2 notes are affirmed due to an insurance wrap that is provided by Financial Securities Assurance, Inc. Payments are made semi-annually in June and December and the reinvestment period ended in July, 2003. Included in this review, Fitch discussed the current state of the portfolio with the asset manager, BEA Associates, Inc.

According to its May 2, 2005, trustee report, BEA 1998-2's collateral includes a par amount of $27.5 million (20.41%) in defaulted assets. The class A overcollateralization (OC) test is failing at 84.45% with a trigger of 117%, and the class B OC test is failing at 62.95% with a trigger of 106%.

The ratings of the class A 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 ratings of the class B notes address 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 this transaction. Deal information and historical data on BEA CBO 1998-2 Ltd. is available on the Fitch Ratings web site at www.fitchratings.com.